Private employers in Wisconsin are not required to provide long-term disability (LTD) insurance, although many do, as an additional employee benefit. State employees are usually provided an optional LTD plan through their employer.
If your private employer does not offer a plan, or you don’t like the plan or want additional coverage, you can purchase your own LTD policy through a private insurance company. Any insurance carrier offering LTD in Wisconsin may not offer a plan that conflicts with federal ERISA laws.
Wisconsin Long-Term Disability Eligibility
Each insurance carrier offering LTD in Wisconsin uses its own definition of disability, and specifies any conditions that are excluded from coverage. Each carrier may have multiple LTD plans available, with different terms, conditions, pricing, and exclusions, so carefully read the fine print of each plan to ensure you’re getting the coverage you need.
Qualifying for Long-Term Disability Benefits in Wisconsin
Each insurance company defines “long-term disability” differently, although most consider that to be a condition that prevents the disabled employee from working for a prolonged amount of time. Most LTD policies have a waiting period, which could be as little as ninety days or as many as 180.
However, some medical conditions are excluded, such as:
- A pre-existing condition
- Nervous disorders
- Mental illness
- Substance abuse-caused disease
Although each carrier defines LTD-eligible health conditions differently, there are commonalities among each carrier. Many insurance companies consider these illnesses or injuries to be LTD-qualifying conditions:
- Cardiovascular complications
- Cancer
- Debilitating back or spine injury
Own Occupation/Any Occupation Coverage
When you purchase your LTD policy, you may be given the option to purchase “own occupation” or “any occupation” coverage. “Own occupation” coverage pays benefits if you are disabled from performing the duties of your particular job. “Any occupation” coverage pays benefits if you are unable to work in any job in any field. It’s common for a policy to begin with a year or two of “own occupation” coverage and then switch to “any occupation” coverage. Check your policy carefully to make sure there are no surprises.
Wisconsin Long-Term Disability Benefits
The purpose of Wisconsin long-term disability insurance is income replacement when you become unable to work. Your benefit will not be the full amount you were earning before the disability but rather a percentage of your average wages for a time period specified in your policy.
Your policy may provide between 50-70% of your average wages, although some plans may offer as much as 80%. When you purchase your policy, you will have the option to purchase a more expensive plan that pays greater benefits. You will have the option to purchase LTD coverage that lasts for a couple of years or a policy that will pay until you reach retirement age.
Another consideration for long-term benefits is whether you will pay taxes. If your employer paid for the policy and premium, you’ll probably pay state and federal taxes on your LTD benefits. However, if you used post-tax earnings to pay for the plan, then your benefits should be tax-exempt.
Talk to an ERISA Benefits Claims Attorney
At Capitan Law, we know the frustration of having an LTD claim denied or delayed. We can help you file your initial claim or appeal a denial and ensure that your rights are protected during the process. If you’re unable to work in Wisconsin due to a disability, call us at (267) 419-7888 today for a consultation.
