DMEC Boston Chapter MeetingOctober 16, 2014 Dan Shaughnessy, Chapter President
Our Mission To advance strategies and resources that improve workforce productivity by minimizing the impact of absence and disability.
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Visit our Bookstore for Useful Resources! Tools of the Trade: Compilation of Programs and Processes for the Absence, Disability, Health and Productivity Professional Tools to help build the business case for programs and move projects forward. Including illustrations, charts, statistics, best practices, employer checklists, and references to credible industry sources in an easy-to-use desk reference. Foundation for Optimal Productivity: The Complete Return to Work Program Manual Numerous industry experts, case studies and flow charts provide the information to set up a new program or improve an existing plan. Order online from dmec.org» Resources & Info » Bookstore
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DMEC Boston Chapter Meeting Social Security Past, Present, and Future October 16, 2014 Presenters: Barbara Mountain, Doherty, Cella, Keane LLP Vic Arruda, Esq. Social Security Advocates for the Disabled
Agenda • The Past • What is Social Security • Why was it created • The Present • How does Social Security affect other types of benefits • Disability Benefits • Why apply: the advantage • Who is receiving benefits • The Future • Opportunities, Options, and Obstacles • Questions/Discussion
Social Security History • 1935 Social Security signed into law by Franklin D. Roosevelt • Creation of an Insurance Program for Workers • Age 65 - Retirement benefits • 1939 Amendments • Dependent benefits added for spouse and children of a retired or deceased worker • 1950 Amendments • Cost of Living Adjustments began • 1954 Disability Freeze began, but not monthly benefits • 1956 Disability benefits for age 50-64
Social Security History (continued) • 1960 Disability Benefits for all ages • 1961 Retirement could now be taken at 62 • For women this changed in 1956 • 1965 Medicare • 1970 – Social Security Administration began to administer Supplemental Security Income • 1980’s The First Social Security Financial Crisis • Reagan – Greenspan Commission • Numerous “tweaks” • Taxation of SS benefits • Including taxation of Federal Employees • Increase in Retirement age in next century (those born 1938) • Children Benefits end at age 18 or 19 if still in high school • Allowed Inter-fund borrowing
tHow does SS affect other types of benefits? Coordination of Benefits • Long Term Disability • Most Group Contracts and some Individual Contracts have a Social Security Offset Provision • Primary Offset is only for what the claimant receives from SS • Family Offset is for what claimant receives and any dependent receives based on the claimants SS Disability or Retirement benefit • Workers Compensation • Typically when a person receives Social Security disability and Workers Compensation, the Social Security Benefit is reduced based on the WC • However there are 10 Reverse Offset States, in which the WC may be reduced by the receipt of Social Security benefits • Florida, Colorado, Minnesota, Wisconsin, Louisiana, New Jersey, Oregon, North Dakota, Washington, Montana, and Ohio
Social Security Disability Insurance Income replacement program for disabled workers • Not at your Full Retirement Age (FRA) • Meets Insured Status (Fully Insured) • Disability Insured (5 out of 10) • Filed an Application • Disabled • Disability expected to last at least 12 months or result in death • Can not perform any substantial, gainful work ($1040 month) • 5 month waiting period • Medicare 24 months after the date of entitlement • ESRD and ALS almost immediately
Social Security Dependent Benefits Aged Spouse Benefits • Age 62 or older • Not entitled to own benefit amt. greater than 50% of the primary amount Child in Care Benefits • Have a child under the age of 16 in household 50% of the primary award Children’s Benefits • Child of the Claimant • Unmarried • Under 18 or 19 and still in high school • 50% of the primary award
Advantages to Filing Medicare • Health Insurance after 24 months - critical protection for your clients and their employees Disability Freeze • Drops out the years of low earnings from future computations. COLA • More money in the claimant’s pocket Dependent Benefits • Protection for Family Members • Children, Aged Spouse, Child in Care • Additional income through COLA’s Work Incentives
Asking a Claimant to File For Social Security Communication is the key to avoiding a mixed message: • Filing for SS is a requirement in the contract/policy • Completely separate program from STD or LTD • No effect on the action plan of the LTD claim • The goal is RTW, if appropriate: however, • Social Security is extremely important protection for the claimant, customer and the carrier if the claimant is unable to return to work. But why would a claimant want to file? 1. Know the Advantages to filing, and 2. Understand how a SS Representative can help
DI 13010.105 RTW within 1 year of onset Work performed within 1 year of onset should be reviewed and possibly revised for either a denial of benefits or a later onset if RTW was unsuccessful Work performed on or after month of entitlement and after 12 months of onset is protected by TWP Work performed after 5-month waiting period and after final determination date is protected by TWP
DI 13010.105 Date of Final Determination The date the Notice of Decision was received by the Beneficiary Presume notice was received on the 5th day following the date notice was mailed, unless the exact date notice was received can be established. Decision is typically SSA’s Notice Of Award
Example: Maurice 63 YO Male, Post Graduate Degree, Myelofibrosis Date Last Worked: Oct 15, 2013 Date Application Filed: Mar 14, 2014 Date RTW: Apr 28, 2014 (PT) Date of SSDI Award: Jun 9, 2014 Is Maurice’s Work Activity in April Protected By TWP?
Maurice is not protected by TWP Onset is October 15, 2013 Statutory Waiting Period Ends March 31, 2014 Decision is Dated June 9th 2014 RTW is April 28th (after 5-Month Waiting Period, but before date of Decision)
Example 2: Linda 56 YO Female MD, Post Graduate, Breast Cancer Date Last Worked: Dec 10, 2013 Date Application Filed: May 26, 2014 Date RTW: Sep 2, 2014 (PT) Date of SSDI Award: Jul 13, 2014 Is Linda’s Work Activity Protected By TWP?
Linda IS protected by TWP Onset is December 10, 2013 Statutory Waiting Period Ends May 31, 2014 Decision is Dated July 13th RTW is September 2nd (after 5-Month Waiting Period and after date of Decision)
Who is Receiving Social Security? Who is Receiving Social Security Benefits Social Security Beneficiaries 59 million beneficiaries in pay A record 9 million workers—over 5 percent of the U.S. workforce were receiving SSDI benefits at the conclusion of 2013.
SSDI Awards by Diagnosis Category: • Avg. Age: 53 • Avg. SSDI: $1146
Then and Now: Growth in the SSDI Program • Over the past 40 years, the number of disabled workers who receive benefits from the SSDI program has increased more than six-fold.
What Are the Drivers of SSDI Growth? • 5 Factors Account for the bulk of Growth in DI Rolls • Population Growth • Population Aging • Growth in women’s labor force participation • Rise in retirement age • Increase in women’s rate of receipt • Other Factors that have Contributed to DI Growth • Legislative Changes • Economic downturn • Lower death rates (beneficiaries stay on the rolls longer) • DI Recovery Rates (less funding for continuing disability reviews)
Social Security Disability Award Rates The ratio of new SSDI awards to the new SSDI applications has been trending downward since the late 1990s. The ratio was 41% in 2001 and 33.5% in 2013 From 2001 to 2010 the number of applications for new SSDI benefits rose by 92 percent, from 1.5 million in 2001 to 2.9 million in 2010. Since 2011 applications are decreasing falling to 2.6 million in 2013 >700,000 claims backlogged awaiting a hearing (average workday 19)
Questions Regarding the Future of the SSDI Program • Is the SSDI program facing a crisis? • What if the Social Security Disability Insurance Trust Fund runs out of money? • Will the Social Security Disability Insurance Trust Fund run out of money? • What options are the Congress and the President considering – or likely to consider?
Social Security Board of Trustees 2014 Annual Report • The DI Trust fund will have sufficient assets to pay scheduled disability benefits only until some point in the 4th quarter of 2016, absent action to forestall Trust Fund asset depletion. • At that point 81% of benefits payable • If the Trust Funds are reallocated full benefits are payable until 2033 • At that point if nothing is done, 77% of benefits are payable