Please ensure Javascript is enabled for purposes of website accessibility Disabled and Unable to Work – Two Potential Paths - Brown & Brown Absence Services Group

Individuals who find themselves unable to work due to a disabling condition will likely find there are several important decisions to make to protect their financial future. For those disabled individuals who are over age 62 but have not yet retained “full retirement age” according to the Social Security Administration (SSA), an additional choice may exist between which Social Security benefit, Social Security Early Retirement (SSER) or Social Security Disability Insurance (SSDI), will provide the most security for them and their families. In this blog post, we follow the paths of two disabled individuals as they make a choice and answer the question, “Should I choose to collect SSER or apply for SSDI benefits?”

Jane, aged 61 – applies for SSDI benefits
Jane is involved in a motor vehicle accident. She suffers severe injuries to her back that prevent her from walking, sitting, or standing for the amount of time her job requires. Jane’s primary care doctor refers her for several tests and imaging scans. Upon review of the results, Jane’s doctor declares her unable to work indefinitely.

After being out of work for several months, Jane seeks out an experienced SSDI representative to assist with her benefit application process. Several months after filing for SSDI benefits, SSA reaches out to Jane and informs her that she can choose to elect SSER benefits when she turns 62, which Jane considers but ultimately declines. Jane knows that if she is not found disabled before her 62nd birthday and elects SSER benefits, her retirement payments will be reduced when she reaches her full retirement age. She relies on her paid time off from work in addition to her small savings to get through the next few months. If Jane is not approved SSDI benefits, she will reevaluate her SSER decision.

Only a few months later, Jane’s SSDI application is approved. She receives an award at the Initial level because of supportive medical evidence in addition to other corroborating factors such as her age, previous work experience, and education level. Despite Jane’s injuries, she did attempt to work after her accident, though only for a few hours a week. Because of this, Social Security found Jane to be disabled a few months after the accident, only a week after she turned 62.

Jane continues to receive her SSDI benefits for several years and knows her retirement payments will be protected when she reaches her full retirement age. Once she reaches full – or “normal” – retirement age, Jane’s SSDI benefit will seamlessly transition to Social Security Retirement, with no change to the amount she receives.

When Jane’s employment ended, she was no longer eligible for her employer-based healthcare coverage. At that time, she received information from her former employer about the opportunity to extend healthcare coverage through COBRA, which she took advantage of. Once Jane received her SSDI benefit for two years, she became eligible for Medicare healthcare coverage. This is about a year and a half earlier than she normally would have been Medicare eligible at age 65. With Medicare, Jane can continue to receive medical care and treatment for her back pain.

Thanks to her ongoing medical treatment, Jane’s condition has improved. After speaking with her doctor, Jane decides she would like to re-enter the workforce. Through her SSDI approval, Jane can utilize the free employment services provided by Social Security’s Ticket to Work program. Jane finds a job where she can thrive despite any lingering physical limitations existing from her accident.

Steve, aged 62 – applies for SSER benefits
Steve has a history of headaches that have recently developed into frequent, debilitating migraines. The migraines begin to impact his ability to focus on simple tasks such as reading and writing and have made it increasingly difficult for Steve to leave his home. The migraines have rendered Steve unable to complete his normal job functions. Steve goes to his primary care doctor to discuss his concerns. His doctor declares that he is unable to work indefinitely.

While Steve was working, he elected the optional long-term disability (LTD) coverage provided by his employer, which will provide him with income replacement while he remains unable to work per the terms of his policy.

After being out of work for a few months, Steve’s LTD carrier discusses with him the obligation he has to file for SSDI benefits. Steve had already been talking with his family about Social Security and was debating filing for retirement benefits. After speaking with his examiner, Steve decides to forego filing for SSDI benefits and continue down the path of applying for retirement payments. Steve understands that an estimated SSDI amount will reduce his monthly LTD benefit down to a minimum benefit going forward, but still declines to file for disability benefits. If Steve changes his mind and files an SSDI application, his examiner will remove the estimated offset.

Steve receives two payments monthly for two years: one from his long-term disability carrier, which is reduced down to the minimum amount because of the estimated SSDI offset, and the other from Social Security for his early retirement benefit. Despite the migraines impairing Steve enough to prevent him from working, his LTD benefits end after two years of payments due to policy limitations. Steve’s migraines are self-reported and fall under the two-year limitation detailed in his policy. Steve continues to receive his SSER benefits and will continue to do so until he reaches his full retirement age. At that time, the benefits will transition to Social Security Retirement, with no change to the amount he receives. As he elected to receive his retirement payments early, Steve will receive a reduced amount for the rest of his life. This amount is about 75% of the amount he would have received had he waited.

As he had been unable to work, Steve’s employer-based healthcare coverage only continued while he was receiving his LTD benefits. When those payments ended, Steve reviewed his options which included electing COBRA coverage or attempting to find private, cost-effective coverage to hold him over until he becomes eligible for Medicare at age 65. Upon review, Steve determined all options to be too costly, and he elects to forego healthcare coverage until he is Medicare eligible. Steve is, therefore, unable to treat his migraines as he had been, and they continue to be incredibly debilitating.

Despite not feeling well enough, Steve considers a return-to-work attempt to raise his income and obtain health insurance. His reduced income and lack of health insurance have made it incredibly difficult to treat his migraines. As Steve is under his full retirement age, any work income may reduce the amount he receives in SSER benefits. Before he begins looking for a job that can accommodate his limitations, Steve must decide whether it would be mentally, physically, and financially worth it to reenter the workforce.

What is the best path for me?
Jane made the choice to avoid filing for retirement payments early to prevent receiving a reduced payment for the rest of her life. By applying for SSDI, she was able to protect her SSA earnings record, obtain Medicare health coverage, and utilize the Ticket to Work program to receive help with reentering the workforce.

On the other hand, Steve chose to file for retirement payments as he did not want to risk being denied after a potentially long waiting period. He supplemented his benefits with those from his LTD carrier and utilized his employer-based health coverage as long as he could.

While Jane and Steve’s stories are not identical to what every disabled individual will experience, they do represent examples of scenarios an applicant may experience. Applying for SSDI benefits may be long and potentially frustrating, while applying for SSER benefits is often relatively quick – however each benefit path has its benefits and drawbacks and should be fully explored based on your unique situation before a decision is made.

If you have been wondering if SSDI benefits are right for you and would like to speak with one of our experienced client advocates about the process, contact us today. Decisions are unique to every individual circumstance, but we are here to help every step of the way.

Claimant information has been changed for privacy. No personal information has been shared.

Nothing in this post is intended as advice or a suggestion to elect or not elect to claim benefits of any kind, including Social Security benefits, nor is it intended as financial advice in any way. The decision to claim benefits is a personal one that is contingent upon each individual’s unique circumstances. Nothing herein is considered medical advice, diagnosis, or treatment.