If you couldn’t work due to illness or injury, how would you get by? Can you count on Social Security or workers’ compensation disability benefits, and does your employer provide adequate disability coverage? Here’s how to check if you’re covered.

Don’t count on Social Security or workers’ compensation. The Social Security Administration has a strict definition of disability and doesn’t pay for partial or short-term disabilities.

Specifically, the Social Security Disability Insurance Program only considers you disabled if  "you cannot do work you did before and we decide that you cannot adjust to other work because of your medical condition.” In addition, your disability must last or be expected to last for at least a year or to result in death, and you’re only eligible for benefits after you’ve been disabled for five months.

As for workers' compensation, this state-administered program only protects you if you suffer an injury at work or an illness that results from your employment. In fact, according to the America’s Health Insurance Plan’s Employer’s Guide to Disability Income Insurance, 63% of all disabling injuries or illnesses occur outside work.

Moreover, even if you meet the stringent requirements under either of these programs, the benefits may not be enough to meet all your needs.

Evaluate your employer’s coverage. Your employer may offer some type of short-term sick leave, short-term disability coverage, and perhaps some type of group long-term disability insurance.

If your employer offers group long-term disability insurance, read the written plan information. Check to see if you’re currently covered, how long you must wait before benefits begin after the onset of a disability, and how long benefits will continue. Also check if you have the option to buy supplemental disability insurance to increase your coverage.

Group long-term disability plans start when short-term disability benefits are exhausted and typically replace about 50% to 60% of your salary, up to a specified ceiling. Benefits may be paid for a specified number of years or until a specified age.

For example, some plans pay benefits until age 65 to employees who are disabled before a specified age. Older employees who are disabled after the specified age can receive benefits under these plans, but only for the stated limited duration.

To prevent employees from receiving benefits that exceed their pre-disability earnings, group long-term disability plans usually integrate benefits with other sources. Therefore, benefits are typically reduced if employees qualify for Social Security or workers’ compensation disability benefits.

When evaluating your coverage keep in mind that employer-provided policies generally cover only your base pay. So if you earn bonuses, commissions, or overtime pay, your employer coverage may not be enough.

Employer policies also cap monthly benefits, so if you’re highly compensated your benefits may be lacking. What’s more, if your employer pays some or all of the premiums, an equivalent portion of any benefits paid are generally taxable to you, which reduces your net benefits.

Fill in the gaps. If you don’t have any employer long-term disability insurance or if your employer’s coverage falls short, look into whether you’re eligible to buy an individual disability income insurance policy.

Article is for educational purposes only and is not intended to provide specific tax or legal advice. For answers to tax questions, please see your tax professional. For legal questions, consult an attorney.

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