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Help with disability insurance claims

Help with disability insurance claims

How to handle claims and ease employees’ return to work.

How should I start a disability claim for an employee?

To start a short-term or long-term disability claim for sickness, injury, pregnancy, or a mental health condition, the employer and employee should sign in to your account, then complete and submit the online claim form.

The doctor can also submit the online claim form or the employee can provide them the Attending physician’s statement to complete.

Submit printed forms via:

Additional information: Understanding your pregnancy leave (PDF)

If your employee also purchased individual disability insurance through a financial professional, that process is handled differently. Get the individual disability insurance instructions (PDF).

How can I check the status of my employees disability claim?

Log in to your account and go to the “reports” section. If the claim isn’t listed, it means we haven’t received it yet. You can find out claim status, the analyst name and contact information. If a short-term disability (STD) claim is approved, the payment information is shown on the STD payment report.

What should I do if a disability happens to one of my employees?

As the employer, you should:

  • Provide the employee online form link or your telephonic claim submission number, if applicable. The employee should sign in and submit the employee section of the claim form.
  • Sign in to submit the employer section of the online claim form. If the employee completes the online or telephonic claim form first and we haven't received the employer section, we'll contact the employer for their information.
  • Emphasize the importance to your employee of providing the claim form to his/her physician as soon as possible. Medical information is needed to evaluate the claim.
  • Keep communication lines open with employees while they’re out. This helps them feel that they will be welcomed back after recovery.  
  • Be open to temporary or flexible work arrangements while employees are recovering. A gradual (or part-time) return to work allows employees to return to their job more quickly while easing back into their normal duties. Our work incentive benefit helps this work for everyone.
  • Show concern and compassion while respecting the employee’s privacy. Avoid asking about specific private health matters. Feel free to ask when they’re coming back to work and if there are any schedule accommodations or special equipment needed for their return.
  • Discuss appropriate actions with our claim analyst.
When should a short-term disability (STD) or long-term disability (LTD) claim be filed?

Short-term disability

The short answer—as soon as possible, however, no more than 30 days prior to the date of disability. When the employee is aware they’ll be off work longer than the time before benefits kick in, known as the elimination period, they should begin the filing process.

Long-term disability

For employees who have LTD coverage only, we recommend the LTD claim be filed no later than halfway through the LTD elimination period.

Filing a claim early has its advantages. Early notification helps us:

  • Be proactive in getting additional information that may be needed to make the initial claim decision.
  • Make timely decisions.
If we have both STD and LTD coverage from Principal Life, will we need to file a second claim form for LTD?

No, a separate claim form isn’t required. Our integrated claim process includes: single notification of claim, 1 claim form, transition from STD to LTD upon receipt of forms returned from the claimant, early intervention, and case management.

If the group has life coverage with us, we will also automatically review for waiver of life insurance premium benefit.

Once a claim is submitted, will additional information be needed?

Yes, occasionally we’ll request more information—usually additional medical documentation we’re missing. If the employee completes the online claim form or the telephonic claim form, we’ll contact you for additional information.

  • If your company benefits are based on W-2 earnings for the prior 1 or 2 years, you’ll need to provide copies of W-2s from those years. For those employed less than 1 or 2 calendar years, we’ll need earnings from date of hire through the last day worked.
  • If you are a business owner, please specify this on the form. We’ll be in contact to get more information in these cases.
  • Contributory coverage and self-accounting groups, we request a copy of the enrollment form. This helps us verify that an employee enrolled for coverage on a timely basis. It also shows us what coverages are elected.
Are benefits guaranteed once a disability claim is filed?

No. To be eligible for benefits, an employee must meet all qualifications as defined by the policy. Medical information submitted must support the definition of disability and isn’t based simply on a physician’s opinion. Each claim is reviewed to determine if it meets the contractual requirements for benefit payment.

What's the expected timeline for a claim decision?
  • Short-term disability—Our goal is to make the STD claim decision 10 days after we receive the claim, but it’s usually sooner. If we need more information after the claim is submitted, that can affect the timing for the decision. Quick feedback helps keep the claim process moving.
  • Long-term disability—LTD decisions are made 45 days from the receipt of the claim or by the completion of the elimination period, whichever is later. 
How often are benefits payments issued?

Short-term disability

We issue benefits on a weekly basis. For routine maternities and some routine surgeries, we offer a lump-sum payout for the approved duration period.

Long-term disability

We offer 2 monthly payment options:

  1. Check—We’ll mail a check to the employee’s address. LTD payments are made on the 10th of the month.
  2. Electronic Funds Transfer (EFT)—Employees can elect to transfer their LTD benefit funds to a bank account they designate.
Can an employer pay the difference between the employee's salary and the disability benefit?

It depends on whether the “salary continuance offset” is included in the “other income source” definition of the policy or not.

  • Policy includes salary continuance offset—The disability benefit is directly reduced by any salary continuance paid. This doesn’t allow the employer to supplement income with salary continuance.
  • Policy doesn’t include salary continuance offset—The employer can supplement the claimant’s income. However, the weekly payment limit will prevent the claimant from receiving more than 100% of pre-disability earnings.
How are taxes handled when disability benefits are taxable?
  • Insured businesses–We don’t withhold state or federal taxes. However, these can be withheld at the claimant’s request. FICA tax is withheld for 6 months from the date last worked.
  • ASO business-applicable states–Federal, state and FICA tax are automatically withheld.
Do premiums need to be continued during STD or LTD?

Short-term disability

Premiums are not waived, so premium should be continued while a person is receiving STD unless employment is terminated or LTD is approved.

Long-term disability

Premiums are waived when the LTD claim is approved, based on the date LTD benefits begin.

How can I find out which tax services were elected with Principal?

Log in to your account and go to the “tax services” section. This will show you which tax services were elected and what your responsibilities are. If you need additional assistance, contact our accounting department at 866-309-1625, ext. 84742.

What accommodations can I make for employees returning to work from a disability?

When you hear "accommodations," you may think of permanent job changes, but that’s not necessarily the case. An accommodation can mean several things and isn’t always permanent. Restrictions that need accommodations can include limited sitting/standing, limited walking or no repetitive hand use.

  • Reduced work schedule–Allows the employee to return to work part-time, gradually increasing to full-time over a specific time period.
  • Flexible work schedules–Allows the employee to come in earlier or later, or to take longer breaks. This can give an employee time for medical or therapy appointments, or simply a resting period.
  • Equipment/worksite modifications–May include items such as scooters, walkers or wheelchairs to assist with walking. Or, desks, chairs, keyboards or foot stools to help with sitting restrictions. In addition, adaptive computer software phone headsets, or an increase in email or texting processes, may help with a variety of restrictions. 
  • Remote work site–Allows an employee to work from home or an office closer to home, reducing lengthy commutes that may cause stress on an employee’s recovery.
  • Job duty changes–Adapts specific tasks, such as separating heavier items to be lifted into smaller, more manageable weights. Or, perhaps job duties that the returning employee can’t handle could be temporarily assigned to another employee.
What services are available with our Return-To-Work ResourcesSM program?

This full-service program encourages employees to get back on their feet and back to work by focusing on appropriate treatment and rehabilitation.

We review each case early to identify options and assist in developing return-to-work programs. Some resources used to promote high-quality, cost-effective results:

  • Job analysis and modification–We get a clear understanding of the job and evaluate possible modifications so the employee can return to work.
  • Skills assessment–Our vocational resources evaluate the activities employees are able to proficiently perform. This helps us determine if it’s possible to transfer the employee to another job or occupation. We also identify barriers the employee may need to overcome and help them find resources in their area.
  • Job placement/outplacement services–If the employee isn't able to return to work in the same capacity, we provide a career transition coach to assist them in returning to work. Services provided to help them return to the workforce include: resume writing, interview skills, application assistance and more.
What if a claim is filed right after coverage begins?

A claim is potentially payable if it incurs after the effective date of coverage. However, if the employee has had coverage for 6 months or less at the time of disability or death, we may need to request additional documentation showing the employee was actively working at the time they were eligible for coverage. 

Additional documentation could include, but is not limited to:

  • Emails
  • Purchase orders
  • Driving logs
  • Signed and dated work documents
  • Other documents may vary dependent on an employee’s job/occupation
Is organ donation considered an elective condition?

No, if someone is donating an organ to a transplant patient, this condition is not considered an elective procedure.

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