Long Term Disability Claims - $8.3 Billion Paid Last Year
Author: Council for Disability Awareness
Published: 2011-10-04 : (Rev. 2013-06-14)
Synopsis and Key Points:
2011 Long Term Disability Claims Review reveals CDA member companies paid more than $8 billion in disability insurance payments to over 587000 disabled individuals during 2010.
Main DigestCDA Releases 2011 Long-Term Disability Claims Review: $8.3 Billion Paid in Claims Last Year - Sixth Annual Review Shows Economy a Factor in Rise of Disabilities, Claims.
The 2011 Long-Term Disability Claims Review, conducted by the Council for Disability Awareness (CDA), reveals that CDA member companies paid more than $8 billion in disability insurance payments to over 587,000 disabled individuals during 2010. CDA member companies approved long-term disability insurance benefits for 139,000 new individuals, up 2.6 percent from 2009. Insured lives declined by 0.8 percent, reflecting job loss in the broader economy, decreased worker participation in existing plans and slightly fewer employers providing traditional group long-term disability programs in 2010.
"The 2011 Claims Review results reflect the continued challenges posed by the economy and the aging of the workforce," said Barry Lundquist, president of the CDA. "New long-term disability claims approved and claim incidence increased, while the number of insured employees and employers offering long-term disability insurance programs to their employees declined slightly from 2009." The study also concludes that claims are lasting longer due to the severity and complexity of some disabling conditions and the difficulty qualified, willing claimants have been experiencing in returning to the workforce when few jobs are available for them to return to. "Economic uncertainty seems to be driving U.S. workers to take more personal responsibility for their financial security, just as greater financial vulnerability is making it crucial for workers to protect themselves and their families from the risk of losing income due to disability."
Since 2005, the CDA has conducted the Annual Long-Term Disability Claims Review, which analyzes private and public long-term disability claims data and identifies continuing and emerging disability trends among U.S. workers. The proprietary claims data is gathered from CDA's member companies, the top U.S. disability insurance companies which represent roughly 75 percent of the commercial disability insurance marketplace.
Additional key findings of the Claims Review include:
Over 50 percent of participating companies reported increased claim incidence, and most suggested the increase was impacted by the recession.
Diseases of the musculoskeletal system and connective tissue - such as arthritis, spine disorders, back pain, sciatica and osteoporosis - were once again the leading cause of new and existing disability claims in 2010.
Other common causes of claims were nervous system related disorders like multiple sclerosis, ALS (Lou Gehrig's Disease) and Parkinson's Disease, as well as heart and circulatory system diseases and cancers.
About 90 percent of new long-term disability claims were caused by illnesses rather than accidents, and fewer than 5 percent were job related.
Applications for Social Security Disability Insurance (SSDI) benefits rose to 2.9 million and new SSDI awards totaled over one million - both records - in 2010. However, the ratio of applications approved as a percentage of applications received remains near its 25-year low. Over 5.9 percent of the workforce, or 8.2 million workers, were receiving SSDI at the conclusion of 2010.
According to the Claims Review's qualitative data, while the incidence of claims increased in 2010, it remained mostly unchanged in 2009, and most participating member companies characterize the incidence rate as lower than anticipated given the continued uncertain economic climate. CDA member companies also reported they are carefully monitoring the impact of the slow pace of economic recovery and potential residual effects of health care reform.
For a copy of the 2011 Long-Term Disability Claims Review, please visit www.disabilitycanhappen.org . Additional resources are also available through CDA's website, including disability research, statistics, tools and financial planning guides that provide tips on how to assess the risk of disability and protect against its impact. Individuals can determine their own personal risk of becoming disabled using CDA's disability calculator, the Personal Disability Quotient (PDQ), at www.whatsmypdq.org
About the Council for Disability Awareness (CDA) - The Council for Disability Awareness (CDA) is a non-profit group dedicated to helping the American workforce become aware of the growing likelihood of disability and its financial consequences. The CDA engages in communications, research and educational activities that provide information and helpful resources to wage earners, their families, employers and others who are concerned about disability and the impact it can have on wage earners and their families.
About the 2011 Council for Disability Awareness Long-Term Disability Claims Review - Since 2005, the Council for Disability Awareness (CDA) has conducted a proprietary annual review of long-term disability claims among the U.S. working population. The purpose is to identify continuing or emerging trends, and to share them with interested audiences. The 2011 CDA Long-Term Disability Claims Review includes quantitative and qualitative long-term disability insurance claims data from the annual CDA member Long-Term Disability Claims Survey. Also included is selected worker disability data from the Social Security Disability Insurance (SSDI) program. Fourteen CDA member companies, representing roughly 75 percent of the commercial disability insurance marketplace, participated in the 2011 survey.
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