Can my wife collect disability and keep her current health insurance coverage?

July 9, 2007 9:55 PM

My wife has been too sick to work for the past five years because she has Cushing's Disease. Her parents own a small business, and my wife has been "working" for them to get health insurance coverage. We'd like for my wife to collect disability, but I don't know if it would be possible to keep her current insurance coverage and collect disability at the same time. Help?

My wife had coverage as a dependent until she turned 21, at which point she couldn't remain on her parent's policy. At that time, they put her on the payroll so she could have her own policy. She doesn't collect pay from her parents, just the health benefits. They pay for her insurance from their own money.

We realized that my wife could be collecting disability, but I don't know how that will affect her insurance. My wife does meet the criteria for collecting disability benefits, but I'm worried about the insurance coverage. Would we be able to pay for her current insurance out of pocket if she stopped "working" for her parents? Would she have to go on some sort of state insurance plan? Does it cost more to buy insurance individually? We live in NJ. I'm not sure as to the legality of our current situation, so I'd prefer to remain anonymous. You can e-mail [e-mail] if you'd like. Thanks in advance!

posted by anonymous to Work & Money (6 answers total)

This may not answer your question specifically, but my mother just received her disability benefits so I know a little about the process.

You can't prove you're disabled and unable to work if you are technically employed. She'll need to quit the job as soon as possible, and even then they will contact that employer and want to know the exact date of when that disability prevented her from doing her job responsibilities. They will bring in a vocation expert which will determine if there is any job on this entire planet which she is capable of doing. Even if that expert determines that she is unable to work, she may still be denied. My mother was denied three times over a total of 4 years. This is not uncommon. It is a long and arduous process meant to weed out the phonies, so you if you are thinking of paying the insurance out of pocket, keep in mind that yes, it will cost more, and yes, you could be paying it for several years before she is approved.

Also, my mother was totally without insurance during the four years. Her husband's income was too high to receive state insurance (medicaid) and since she hadn't yet proven that she was disabled, she wasn't allowed federal insurance (medicare). She couldn't get a job that would provide health insurance because she would automatically be denied her disability. She couldn't afford individual insurance which ran about $200 per month.

And of course, IANAL, but you should go see one. They can help you out with all the specifics.
posted by Ugh at 10:52 PM on July 9, 2007

If you're permanently disabled, you can qualify for Medicare parts A-D after two years. Medicare is really pretty good insurance to have, all told.
posted by ikkyu2 at 11:56 PM on July 9, 2007

I am a lawyer and I am a board certified specialist in Social Security disability law. However, I am not your lawyer and you should take what I say as general advice only.

It does not sound as if your wife is working; rather she is receiving a subsidy in order to receive health insurance. The Social Security Administration has very specialized rules for looking at what lay people might assume to be work. Over the years, I've successfully represented several claimants who were in the exact same position and the money they received, while requiring an explanation, was not a bar to receiving disability benefits. Another factor that comes into play is the amount of money received--if it is low enough, the Social Security Administration would not be overly concerned with it.

So, Ugh is not necessarily correct when she says your wife must quit her job immediately. She is correct that this can be a long drawn out process. One thing you need to know is that the Social Security Administration is, to put it plainly, broken; it does not have the money nor the staff to do the job it is required to do. Consequently, this is a long process, even for cases that are 100% meritorious and not serially denied.

Your family income and resources in all likelihood disqualify you for Medicaid, which is a needs based program. ikkyu2 is correct (sort of) to say that, with a finding of disability comes enrollment in Medicare Parts A and B--29 months after the month of entitlement to disability benefits. (There are exceptions.) At that point your wife could purchase Part D coverage (prescription benefit) if she desired. Note that that is 29 months from month of entitlement, and that benefits can only be paid twelve months prior to application, and that there is (almost always) a five month waiting period before benefits start. For example: your wife files tomorrow and alleges she became disabled five years ago. SSA finds her disabled as of then. Her benefits would start as of July, 2006 and she would be enrolled in Medicare, July, 2008. (Her five month waiting period would be for a time she would not have received benefits anyway.) Assume, SSA said she became disabled July, 2007; her benefits would start January, 2008 and Medicare would start January, 2010.

I hope I have conveyed some of the complexity of this process and made it plain that this is an area where having representation makes a huge difference. Under the Social Security Administration's rules, your representative need not be an attorney and I personally know many non attorney reps who do wonderful work for their clients. However, my bias is to say hire an attorney, but not just any attorney--hire one who does this work on a regular basis. Unfortunately, many general practitioners think they can dabble in this work, only to have their clients find out the hard way that they can't. One way to find a qualified attorney in your area is to contact the National Association of Social Security Claimant's Representatives (NOSSCR). Membership in that organization is no guarantee of quality but is a pretty good indication that the attorney has a commitment to quality work in this area. You can find NOSSCR here: http://www.nosscr.org/.

There are many nuances to your wife's claim we've not even talked about here, the chief one being whether or not she is even insured for disability benefits. Given what I assume to be her young age and limited work history, that is a big question. If she is not, her only recourse would be Supplemental Security Income, which, like Medicaid, is a needs based program for which you are probably not eligible.

Also, without going into the reasons why, there is a huge advantage down the road to proving she became disabled prior to age 22, if at all possible.

Good luck to you both.
posted by pasici at 4:47 AM on July 10, 2007 [4 favorites]

If circumstances force your wife to quit "working" for her parents, you should look into COBRA continuation coverage. This would give her an additional 18 months of insurance - if your group is large enough. Federal COBRA rules require 20 employees. Your state may have an equivalent law which lowers the threshold - California's is 2 employees. Assuming your wife qualifies as disabled under the Social Security rules, she may be able to extend COBRA beyond 18 months.

Also, some group plans offer conversion coverage, which you can elect if you're not eligible for COBRA or when it expires. The benefits will not be the same as the group plan, and it will cost more. But, conversion coverage means you are automatically approved for an individual plan. You won't be denied coverage or have pre-existing conditions excluded.

I'm a little concerned that you may get in trouble with your group insurer if they find out your wife is not really working. Some insurers have minimum work-time requirements - for example, at one of my previous jobs, the insurer would only cover people working 30 or more hours per week. This was the insurer's requirement, not the employer's. Things could get sticky if you want to prove that the disability began earlier.
posted by expialidocious at 11:15 AM on July 10, 2007

Yes, exactly why you should speak to a lawyer. I didn't mean to imply it would be impossible for her to receive disability while technically employed, just that i've never heard of anyone doing that successfully. My mother had a vocation expert state that she was "completely unemployable" due to her health conditions and limited education, several doctors testify that she was permanently disabled, and she was actually unable to attend one of her hearings due to a massive stroke she had suffered the week before. She was still denied twice after that before she was approved. The system will search for absolutely any reason to deny her disability, which is why I said if it were me, I would quit the "job," and not give any unnecessary ammo. Best of luck to you both, don't give up.
posted by Ugh at 4:04 PM on July 10, 2007

Not to change the subject too much but if your wife has had Cushings for 5 years than there is a bigger problem than needing to go on Disability. While Cushings is a TERRIBLE disease it is simple to cure with surgery. DO NOT let your wife continue to suffer and consult a surgeon ASAP.

I am not a Doctor but one of my best friends had Cushings for a year and a half. The only reason she had it that long was because no doctor could diagnose it properly. Once she had surgery to remove the tumor she was back to her old self. Please look into surgery!
posted by remthewanderer at 4:44 PM on August 9, 2007