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Summary

When returning to work after being on disability because of a health condition, it's important to understand what happens to the benefits you have, and the extent to which you qualify for new benefits.

If you are considering returning to work for a new employer rather than for the employer for which you formerly worked, and you will work enough hours per week to qualify for benefits from the new employer-- usually 30 hours or more per week, look at what happens to each of the benefits you may have now. Following is a list of benefits to consider. Information about each is contained in other sections of this article:

Also look at:

If you are thinking of returning to the employer for which you worked before you went onto disability, see Return to Work to the Same Employer- Impact on Benefits.

Before you start the process of returning to work, be sure to read Returning To Work.

Effect Of Return To Work For A New Employer On Your Health Insurance

The impact of returning to work on health insurance depends on the source of that insurance.

If your health insurance is from a prior employer and continues because of COBRA

Returning to work by itself does not effect COBRA. Your COBRA coverage will continue until its normal termination date as long as premiums are paid.

If your new job provides health insurance, COBRA ends as soon as the new plan takes effect and it begins to cover any pre-existing condition. While this is good news, on the down side you have to continue to pay the COBRA premiums.

You may not have to pay COBRA premiums if you had your previous health insurance long enough, and the gap between your old coverage and the new coverage is short enough. Under the federal law known as HIPAA, you can generally offset the amount of time you had your previous health insurance against a new pre-existing condition exclusion.

For more information, see COBRA and HIPAA-Portability.

If your health insurance is from a prior employer and continues because you are on disability leave

Some employers continue health coverage as long as the employee remains disabled or continues to collect Long Term Disability benefits. If this is the case, your coverage will end when your Long Term Disability benefits stop.

Discontinuing disability leave could be an event under the laws known as COBRA which would allow you to keep your former employer's health coverage until the new employer's coverage starts.

For more information, see COBRA.

If you purchased health insurance on your own

Your health insurance continues in force as long as you pay the premiums even if you obtain additional health insurance from your new employer. If you have two health insurance coverages, there are rules as to which company pays for what.

To learn more, see Coordination of Benefits.

Effect Of Return To Work For A New Employer On Your Social Security Disability Income (SSDI)

  • SSDI provides a trial work period that continues full benefits for up to twelve months while you attempt to return to work.
  • If you become sick again within the first three years immediately after a trial work period, (known as an extended period of eligibility) no new application will be required. You only have to call your local Social Security Administration office.
  • If you become sick again and your income drops within five years, no new waiting period for benefits will be imposed.

For more information, see SSDI-Return to Work.

Effect Of Return To Work For A New Employer On Your Supplemental Security Income

Some of your income may not be counted to reduce your SSI payment. For example, if you have a Plan for Achieving Self-Support ("PASS").

If your health condition worsens so that you have to stop working and your income decreases, your benefit will revert to what it was before you tried to return to work. If that happens more than 12 months after SSI payments have stopped, you may have to file a new application in order to receive benefits.

For more information, see SSI-Return to Work, and PASS.

Effect Of Return To Work For A New Employer On Your Medicare

Keeping Medicare coverage is usually a good idea even if you get other health insurance from a new employer. Medicare would act as a "safety net" of coverage.

Federal rules establishing priorities of payment between overlapping insurance will help minimize your co-payments and deductibles. To learn more, see Coordination of Medicare and Other Health Benefits.

If you have Medicare as a result of receiving Social Security Disability Insurance (SSDI), and your SSDI benefits stop because of your return to work

Coverage will remain in force for three years without payment of premiums.

  • After that time, if you're still working but medically disabled, you can keep coverage in force indefinitely by paying premiums yourself.
  • If you qualify financially, your state welfare office will pay premiums for you.

If you have been receiving SSDI, but have not qualified for Medicare by the time you return to work

You will be given full credit for the months you've received benefits (against the 24 month wait) at any time you again become disabled, so long as the cause of both disabilities is the same.

To Learn More

More Information

SSDI - Return to Work

Effect Of Return To Work For A New Employer On Your Medicaid

Even if you earn above Supplemental Security Income (SSI) limits and thus no longer qualify for benefits, you will remain covered by Medicaid so long as:

(1) You're still disabled, and
(2) You cannot afford similar coverage
(3) You depend on the Medicaid coverage to work.

Ask your Social Security representative what's the maximum amount of income you can earn in your state before you lose Medicaid coverage. Or contact your local Medicaid office through http://healthinsurance.about.com/gi/dynamic/offsite.htm?zi=1/XJ&sdn=healthinsurance&cdn=health&tm=17&gps=171_400_1020_598&f=00&su=p247.2.140.ip_p726.2.152.ip_p284.8.150.ip_&tt=12&bt=0&bts=0&zu=http%3A//www.nasmd.org/links/state_medicaid_links.asp offsite link.

To Learn More

More Information

Medicaid - Return to Work

Effect Of Return To Work For A New Employer On Drug Assistance Programs

If you’re getting help with your drugs, or even free drugs from a drug assistance program, check with the program to determine what criteria disqualify you from continuing to receive assistance. Generally it is not a question of whether you are working or not, but how much you are earning, the amount of your assets, and whether you have drug coverage such as through work.

Effect Of Return To Work For A New Employer On Your Life Insurance

The existence of any group life insurance you continued from a previous employer may be affected in either of two ways.

If as a courtesy, your previous employer continued your life insurance while you were on disability

By returning to work you will no longer be part of your previous group and you may be required to convert your coverage life insurance from group coverage to more expensive individual coverage.

If your previous group coverage had a disability waiver of premium provision which has been in effect

Thanks to the disability waiver of premium provision, you have not been required to pay premiums to keep your coverage in force as long as you were disabled. By going back to work, you will have to start paying premiums again to keep the coverage in effect the waiver will end.

If you want to keep the life insurance, you will likely have to convert from the group insurance to individual insurance and start paying the premiums.

If you don't want to pay the cost of the entire premium, consider reducing the death benefit and thus the premium.

To Learn More

More Information

Group Life - Conversion

Effect Of Return To Work For A New Employer On Long Term Disability Insurance

To know what happens to income you've been receiving from a long term disability insurance policy, you have to look at the policy. They're all different.

Check to see whether the policy covers inability to work in your "own occupation" or "any occupation."

If your policy covers "own occupation," and you can work but can't return to your "own occupation"

Your income will continue. For example, a surgeon who hurts a hand can no longer do surgery ("own occupation") but can still function as a doctor. She would be entitled to income because she can't perform her own occupation.

If your policy covers "any occupation" and you can work

Payments will stop -- even though you can't return to your "own occupation." In our example, if a surgeon hurts a hand and can no longer work as a surgeon, she can still work as a doctor. As soon as she can work as a non-surgical doctor, her disability income will stop.

If you can work, but not to the same extent you used to, check your policy to see what it says about "residual" or "partial" disability

These provisions encourage a return to work by supplementing reduced earnings.

If you go back to work, and become disabled again during a specified period of time after returning to work

Most policies provide that there is no new waiting period for the disability income to start. That would mean if you can't make it at work, your income will start again as soon as you stop working.

If your policy is an individual one

You can continue it as long as you continue to pay the premiums.

If your disability insurance is group, and you return to another employer

The original insurer's obligations end.

To Learn More

What Happens To Public Benefits Such As Social Security Disability Insurance (SSDI), Supplemental Security Income (SSI), Medicare Or Medicaid If I Have To Stop Working Again?

Unfortunately, even when people give it their best, it is not always possible to remain at work. Fortunately, most benefit programs account for this situation.

Most public benefits programs provide generous trial work periods to encourage people to return to work. The odds are that new benefits or a continuation of existing benefits will start almost immediately if you have to stop work again.

To Learn More

More Information

SSDI SSI Medicare Medicaid

What Happens To Benefits From A Current (New) Employer If I Have To Stop Working Again?

Benefits from Current (New) Employer

Group Life Insurance

Life insurance through your new employer will work the same as it did when you were employed before your disability leave. If waiver of premium is included as part of the employer's plan, you will have that right, which means premiums will be waived if you become disabled again.

Group Health, Dental, Vision

You will be entitled to continue coverage under COBRA. You will also have the right to convert under HIPAA.

To learn more, see COBRA and HIPAA.

Long Term Disability

If you stop working within the first 12 months after returning to work, the odds are you won't qualify for benefits under a new employer's long term disability insurance.

Generally, a Long Term Disability plan with a new employer will have a Pre-Existing Condition Waiting Period and will not provide any benefits if you leave work in the first year or two of coverage for the same condition that you were treated for prior to getting the Long Term Disability coverage.

To learn more, see Long Term Disabiliy Insurance.

To Learn More

What Happens To Benefits From A Previous Employer If I Have To Stop Working Again?

Life Insurance

There is no change just because you leave your next employer. The change occurred when you started work with the new employer.

Long Term Disability Insurance from your prior employer

If you stopped receiving income from disability insurance when you returned to work without an agreement about what would happen if you didn't make it at the new job, then the odds are the payments will not be started again. However, if your policy provided a trial work period, or if you negotiated with the insurance company before returning to work about this very situation, your income may start again.

Also, if you leave within six months of returning to work, the plan's Recurring Disabilities Provision may offer a chance to get benefits started again.

Health Insurance:

If you converted your last employer's group health insurance to an individual policy

Leaving the next employer has no effect on the coverage.

Health Insurance:

If you continued your health insurance from your previous employer under COBRA and you became eligible for health insurance from your new employer

Whether or not you took the new health insurance, your COBRA should have ended when you became eligible for the new employer's health insurance. The fact that you now leave the new job does not affect the termination of your right to COBRA.

There will probably be COBRA continuation all over again from your new employer's plan, and possibly a right to convert the new employer's health insurance to individual coverage.

If you continued your health insurance from your previous employer under COBRA but did not become eligible for health insurance from your new employer

Going to work for a new employer without becoming eligible for health insurance from that employer does not affect your COBRA coverage. Thus, it does not matter whether or not you stay with the new employer.

Your COBRA coverage will stay in force until the time limit runs out or you become eligible under another employer's health insurance or you become eligible for Medicare or Medicaid. Keep in mind that when COBRA runs out, HIPAA permits a conversion to individual health insurance.

For more information, see HIPAA and COBRA.

Covered under current employer's health plan: There will probably be COBRA Continuation all over again for this health plan, assuming your employer comes under either the federal COBRA law or a state Continuation law probably be no benefits available if you leave work for the same condition that you earlier.