Short-Term Disability Issues
Medical Certification Difficulty There have been reports in areas that have been particularly hard hit with COVID-19 cases that employees have been unable to obtain the necessary medical certifications for short term disability (STD) claims. Many providers have been redirected to provide either direct or indirect care for COVID-19 patients and services. Many providers are restricting patient visits to virtual visits out of an abundance of caution for both patients and providers. Out-of-the-Box Ideas Some employers and insurers are considering adopting programs to conditionally approve initial STD claims for 30 days without formal medical certification. These programs are plan specific and, in most cases, are regionally specific and limited to where restricted medical certification availability is an actual issue. Some are restricting the liberalization to COVID-19 related diagnosis while others are looking at it for all diagnoses. While this is far from commonplace at this point, the reality of barriers to STD claims being filed and payments being processed is concerning for employers and employees alike. Employers and insurers are trying to “get creative” in the wake of this crisis. Coordination with Carriers For these considerations, carriers are in the driver’s seat for fully insured plans. For self- funded plans, employers will need to confirm that their third-party administrator, administration services, or provider can accommodate this request. In both cases, plans would need to confirm the impact on any state-mandated benefit paid, if applicable.
Life and Disability Issues
Furloughed Employees Many life and disability carriers are responding to the pandemic with offers to allow furloughed employees to stay on the plan as long as premium is paid and the method is not discriminatory. But the devil is in the details.
Some carriers are defining a specific date through which employees may stay on the plans. Other carriers are leaving it open-endedd indicating they will clarify it at a later date or may extend it based on circumstances. Still, others are allowing an extension under the Short Term Disability (STD) contract, but not under the Long Term Disability (LTD) contract. Still, others are completely silent on the issue of duration. This could leave the situation where coverage
Check specific contract provisions and carrier exceptions carriers prior to making any benefits continuation promises.
extensions are mismatched between plan types or communication is made assuming one thing when some combination of contractual provisions and carrier exceptions deem it another. Right now, there is a veritable flurry of activity with carriers and employers alike trying to confirm these details. Given this reality, when considering furloughing employees, it is imperative that specific contractual provisions for each policy be clarified prior to communicating any promises regarding how benefits may be continued under plans. Terminated Employees As a reminder, life and disability benefits are not subject to COBRA. Neither are life and disability benefits typically able to be continued under a severance agreement.
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