Tuesday, July 1, 2008

People Don’t Know Much About Disability, Workers’ Comp Benefits

Most people think that workers’ compensation and Social Security disability will protect them and provide for them if they are injured at work or become unable to work because of a disability. But that faith may be misplaced.

A new poll conducted by Harris Interactive on behalf of America's Health Insurance Plans (AHIP) reveals that “most baby boomers overestimate the breadth and depth of the public safety net available for workers who suffer a disability. Baby boomers believe public programs provide disability benefits to more people than they actually do and most overestimate the amount of benefits available.”

AHIP is using these survey results to pitch disability insurance. But that’s beside the point. This survey does highlight the difference between perceived and actual benefits available to disabled workers and injured workers under the various state workers’ compensation programs and the federal Social Security Disability system.

Among the survey findings:

  • Nearly half of baby boomers believe incorrectly that a working adult would qualify for SSDI benefits if he or she were unable to work at their current job, but could still work at another job that pays less money.
  • More than a third of baby boomers believe a worker is qualified if he or she can work no more than twenty hours a week
  • One in four say they do not know what the qualifications are. (In reality, workers are only eligible for SSDI benefits if they are unable to do any work for which they would earn $1,000 or more per month.)
  • Only one in five baby boomers correctly estimated the average monthly SSDI benefit for a disabled worker to be about $1,000 a month.
  • Eighteen percent overestimated the benefit and a significant number of baby boomers (43 percent) said they did not know how much the average monthly SSDI benefit was.
  • Many baby boomers believe people can qualify for workers' comp benefits if they suffer a disability that prevents them from working at their previous job (26 percent), forces them to work at a job that pays less than their current job (10 percent), or if they can only work part-time (9 percent).
  • 36 percent did not know how much of their current income Workers' Compensation benefits would replace and one in five surveyed overestimated benefits. (Workers’ comp generally pays about two-thirds of an injured worker's wages.)
  • 34 percent underestimated how long it takes to begin receiving Social Security disability benefits. (The current wait is about 500 days or 17 months, and many people are denied benefits repeatedly and must wait much longer before receiving any disability payments.)

A summary of survey results is available here and the survey questionnaire is also online.

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