Over the years, many clients have turned to Peña & Bromberg, PLC for help applying for Social Security disability benefits. One common question is: “Should I apply for SSDI if I already receive long-term disability insurance from my employer or an insurance company?”
In most cases, the answer is yes. Social Security disability benefits offer several advantages that private long-term disability plans do not.
Increased Monthly Income
One major benefit of SSDI is the chance to receive higher monthly income over time.
- SSDI payments increase when Social Security issues cost-of-living adjustments (COLA).
- COLA raises benefits when the Consumer Price Index (CPI) goes up.
Private long-term disability plans, however, do not adjust payments for inflation.
This means your monthly benefit stays the same year after year.
For example:
- A disabled worker receiving $1,000 per month from a private plan will continue receiving that same amount, even as the cost of living rises.
Tax Benefits
SSDI may also offer tax advantages, even though about 50% of SSDI benefits can be taxable.
The key factor is how your long-term disability insurance premium was paid.
- If premiums were paid with post-tax dollars, private disability payments are not taxed.
- If premiums were paid with pre-tax dollars or paid by your employer, the private disability benefit is taxable income.
Understanding this difference can help you plan your taxes more effectively.
Medicare Coverage
Another major advantage of receiving SSDI is access to Medicare, which becomes available two years after you become disabled.
Disabled workers covered by COBRA can benefit even more:
- COBRA lets you keep employer health insurance for 18 months after leaving your job.
- If you qualify for disability benefits within those 18 months, you can receive 11 additional months of COBRA coverage.
This gives you up to 29 months of health coverage before Medicare begins.
Once COBRA ends, Medicare starts, regardless of your age. This includes:
- Part A (hospital care)
- Part B (medical care)
- Part D (prescription coverage)
Keep in mind that some employers are not required to offer COBRA, including:
- Some nonprofit organizations
- Businesses with fewer employees than federal rules require
Protected Social Security Retirement Benefits
SSDI also protects your future Social Security retirement benefits.
When you receive SSDI, your disability period is “frozen” on your Social Security earnings record.
This helps you in several ways:
- Years with no earnings due to disability are not counted in your retirement calculations.
- This prevents your future benefits from being reduced.
- If you have a dependent under age 18, they may also qualify for benefits.
Employer-sponsored long-term disability plans do not offer these features.
Return to Work Incentives
SSDI gives you a chance to return to work without losing benefits right away.
After your claim is approved:
- Social Security reviews whether your condition is likely to improve.
- If you join a vocational rehabilitation program, your benefits continue until the program ends.
- The Ticket to Work program allows a trial work period while you still receive benefits.
- If you cannot continue working, your benefits continue with no break.
These incentives are designed to help you try working again without losing financial support.
California Social Security Disability Benefits Attorneys
The attorneys at Peña & Bromberg, PLC work closely with disabled individuals to help them obtain Social Security disability benefits. Since the SSA denies most initial claims, legal representation is crucial.
Our firm has a strong history of helping clients get the benefits they deserve, and we are dedicated to protecting your rights.
Call our office today for a free consultation or complete the contact form on our website.
