Eligibility and Application

Where to Sign Up

You can sign up for Short-Term Disability Insurance (STD) and Long-Term Disability Insurance (LTD) by contacting:

  • Your employer’s human resources department if your employer offers disability insurance
  • A trade union, alumni organization, or other professional organization you are a member of if they offer group plans
  • An insurance agent if you want an individual plan

Note: STD and LTD are not government benefits and are not connected to any public benefit program. It is private insurance that you get through a private company. To find out if you have coverage through your employer, talk to your Human Resources person. To sign up for an individual policy, contact an insurance company or insurance agent.

Group Versus Individual Coverage

One way to get STD or LTD insurance is through an employer, union, or other professional organization. This type of policy is known as group coverage and is your best option. To get coverage through your employer, you usually need to be working a minimum number of hours per week. This is called the “active work requirement.”

Another option is to purchase individual coverage directly from an insurance company or agent. The main reason for getting an individual policy is if you work for an employer that does not offer any STD or LTD policy or the income from the insurance would be insufficient if you did become disabled.

Getting an individual policy is a little more complicated than getting a group policy. You will have to look at different factors before you choose a policy and undergo medical underwriting. You may be denied coverage. These and other issues related to finding and choosing an individual policy are discussed below.

Converting a Group Policy to an Individual Policy

If you get group coverage from your employer and are leaving your job, you may be able to convert your group coverage from your old employer to an individual policy that you can keep without undergoing medical underwriting. This can be helpful if you are going to work for a new employer that does not offer disability insurance in its benefits package.

Major Differences in Policies

If you purchase an individual policy, you will pay a monthly premium for your STD or LTD insurance. If you become disabled, the higher your premium, the shorter the waiting period will be, the higher your benefits check will be, and the longer you will be able to continue receiving benefits. Make sure to choose a plan that will meet your needs with respect to these three factors.

If you have a group STD or LTD policy, ask your human resources department about your plan’s waiting period, coverage amount, and benefits period:

  • Waiting Period: Sometimes called the “elimination period.” This is the period between the start of your disability and when you are paid your benefits. Generally, policies with longer waiting periods are cheaper. Many plans have different waiting periods for different types of disabilities. For example, a plan may have a 7-day waiting period for illnesses and no waiting period for accidents. For LTD plans, the waiting period is usually between 30 days (or 1 month) to 180 days (or 6 months) after the disability has occurred. Some policies allow you to choose the waiting period.
  • Benefits Rates: When you get your individual policy, think about how much money you believe you would need to pay for your essential monthly expenses, such as your mortgage payments or rent, food, utilities, and transportation, if you couldn’t work. Remember that if you develop a disability, you may also have additional medical costs. Try to get a plan that you think will cover your expenses. Most people get policies that pay about 60% of their income prior to becoming disabled. Some policies also change rates during the benefits period. For example, your policy may pay 80% for the first three weeks of disability and then 50% for the remainder of your benefits period.
  • Benefits Period:The benefits period is the amount of time that you get benefits if you become disabled. You may want to select a policy to get the longest benefits period that is available. However, the longer the benefits period, the more you will pay in premiums. For STD policies, the benefits period is 12 months or less. For LTD policies, the benefits period can vary between a set number of years, such as 2 years or 5 years, or it can be until a certain age, such as 65. If you have an employer-sponsored policy, but you don’t feel it gives you a benefits period that is long enough, you can buy additional coverage.

Medical History and Pre-Existing Conditions

When you sign up for STD or LTD insurance, the insurance provider will look at your medical history. Insurers look at your medical history differently, depending on whether you are signing up for group coverage or individual coverage.

Group Coverage

For employer-provided coverage, you will be allowed to sign up for the plan during an initial enrollment period. During this period, the insurance company cannot deny you coverage based upon a pre-existing condition, so it is very important to sign up then.

If you have a pre-existing condition when you sign up for your group plan, you may be required to work for a certain period of time before that pre-existing condition is covered by your insurance policy. This period of time is generally between 12 months (or 1 year) and 24 months (or 2 years) and is called an “exclusionary period.”

If you do not sign up during the initial enrollment period, you will have to undergo medical underwriting. The insurance company will review your medical records to find out if you have a pre-existing condition or are getting treatments for a potentially disabling condition.” Treatments can include advice from a doctor or a medication. If the insurance company finds that you do have a health condition or have received treatments, the insurance company can deny you coverage, exclude conditions from being covered, or have an exclusionary period for your conditions.

Similar rules apply to other types of group coverage that are not employment-based (like group policies through a trade union or professional organization). There may be specific periods of enrollment, insurance companies may be able to deny coverage based on health conditions, and there may be exclusionary periods for pre-existing conditions.

Individual Coverage

If you want individual coverage because you do not have access to group coverage or because your group coverage offers small cash benefits or doesn’t give you benefits for long enough if you do become disabled, you will also have to undergo medical underwriting.

The insurance company will review your medical records to find out if you have a pre-existing condition or are receiving treatments for a “potentially disabling condition.” Treatments can include advice from a doctor or a medication. If the insurance company finds that you do have a health condition or have received treatments, the insurance company can deny you coverage, exclude conditions from being covered, or have an exclusionary period for your conditions.

When to Sign Up

The sooner you sign up for disability insurance, the better. With employer-sponsored plans, you should sign-up during your pre-enrollment period, also called the initial enrollment period. With other group policies, you may have to be a member of the group for a period of time before you can in enroll in the plan. Once you become eligible to enroll, sign up as quickly as you can to avoid exclusionary periods or the exclusion of specific conditions.

Service Wait

Some employers will only offer disability income insurance policies after you have worked for them for a set period of time called a service wait (for example, you may have to wait six months before you can enroll). A service wait is sometimes called a "minimum service requirement." Some policies also pay higher benefits for people who have worked for longer periods.

Service waits are also common for group plans that are offered by unions and other organizations. Your eligibility to enroll may depend on how long you have been a member of the group.

If you are interested in purchasing an individual policy, you should sign up as young as possible. Young people pay lower premiums and if you purchase disability insurance at a young age, you may be able to get a “non-cancelable” policy, meaning that your coverage can’t be canceled and your premiums can’t be raised as long as you pay your premiums on time.

Appealing an Insurance Provider’s Decision

If you have a dispute with a disability insurance provider, you may be able to appeal their decision with the Minnesota Department of Commerce. You can appeal if you:

  • Believe you were wrongly denied disability insurance coverage
  • Disagree with the medical underwriting based on a pre-existing condition, or
  • Believe that any other terms or conditions of your disability insurance plan are unfair.