Rick Gundling, FHFMA, CMA, senior vice president of healthcare financial practices at Healthcare Financial Management Association in Westchester, Illinois, shares an anecdote that illuminates why healthcare professionals (HCPs) should consider individual disability insurance (IDI). “My grandfather was a dentist. He slipped on a floor in a grocery store and broke his arm. When you’re a dentist and you break your arm, you’re out of commission for 6 weeks and your income drops,” explains Mr Gundling.
Jeff Brunken, president of MGIS — an insurance program manager in Salt Lake City, Utah — calls disability insurance “a risk mitigation tool that protects income in the event of a disability caused by illness and injury.” “HCPs typically earn much more than the average person and have more expenses. They also have more debt from student loans and practice acquisition,” adds Mr Brunken.
According to the US Equal Employment Opportunity Commission, those working in the healthcare industry experience a “high incidence of occupational injury and illness. Healthcare jobs often involve potential exposure to airborne and blood-borne infectious diseases, sharps injuries, and other dangers,” the commission notes.1
“There is evidence that [physicians] and dentists are disabled more often than other professionals or occupations. The job can be very physically demanding, leading to more physical conditions being developed. It also can be hard on mental health,” says Mr Brunken. Indeed, “Musculoskeletal Conditions in Dentistry: The Most Common Disability, the Most Difficult Disability Claim” from Scottsdale, Arizona-based disability insurance attorneys, Comitz Beethe, states that “one in four workers will suffer a long-term disability during his or her career. For dentists, whose work involves musculoskeletal strain, this number is even higher.2”
“A lot of emergency medicine physicians need disability insurance,” says Mr Gundling. “There’s a roughness to their practice. A lot of patients can be violent. I know a lot of people who were going to go into orthopedic surgery to replace hips and knees, found it exhausting and switched to hand surgery.”
“Everybody focuses on life insurance, but you’re more likely to become disabled than die,” Mr Grundling points out. “What type of insurance should I have? If it’s a group practice, maybe it’s part of a group plan. Have I saved 3 months of living expenses? If I haven’t, I might want to take out IDI to supplement that,” says Mr Gundling, who notes that group insurance tends to be what your employer buys.
“Maybe your group plan only covers to 50%. You might want a policy that supplements to (an additional) 20% or 30%. Many times a 45-year-old [physician] has elderly parents at home and needs help. So having that regular income if you become disabled is very important,” he adds.
According to Mr Brunken, “Most HCPs cannot get to 60% to 70% income protection without a combination of group and individual benefits.” His list of “what if” questions for them to ask insurers includes the following:
- Based on all of my earnings, do current policies cover 60% to 70% of income?
- What will offset my benefits in this policy?
- Are my earnings indexed? Will inflation negatively impact my policy?
- Does my policy require rehabilitation? Will I lose benefits if I don’t participate in rehabilitation?
- Do I receive disability benefits if I can’t perform my medical procedures?
“The key element to focus on here is the definition of disability. Most group disability policies stop at a specialty definition. IDIs typically use a ‘True Own-Occupation’ definition, which considers HCPs disabled if they can no longer perform their exact responsibilities. That means even if an HCP transitions to work as a professor after their disability, they would receive their full benefit,” Mr Brunken explains.
The Council for Disability Awareness (CDA) in Portland, Maine, highlights the impact of the novel coronavirus disease 2019 (COVID-19) on IDI, describing it as “a catalyst for many people who put off buying insurance.”3 A CDA blogger pointed out that there are “more applications and pending applications for IDI than ever before.”3
Mr Gundling thinks COVID-19 sparked interest in disability insurance. To decide if IDI is right for them, he advises physicians and other HCPs to examine their entire benefits package. “A lot of people will use it as a recruitment tool. As more and more physicians become employed, they’re used to looking at benefits packages,” he says.
Adds Mr Brunken: “Many carriers offer discounts to groups who buy IDI. It is also possible to structure a compensation plan that provides funds for a physician to purchase their own IDI plan. There are different ways this can be set up to offer tax advantages. The group should also look for a solid group policy that will pay out benefits like a good IDI policy would,” he suggests.
1. US Equal Employment Opportunity Commission. Health Care Workers and the Americans with Disabilities Act. ADA, Rehabilitation Act, 29 CFR Part 1630.
2. Comitz EO. musculoskeletal conditions in dentistry: the most common disability, the most difficult disability claim.” Comitz Beethe. Available at: https://www.disabilitycounsel.net/firm/dentist-resources/musculoskeletal-conditions-in-dentistry/. Accessed September 28, 2020.
3. Harnett C. Do you have the 2020 facts on disability insurance? Available at: https://blog.disabilitycanhappen.org/do-you-have-the-2020-facts-on-disability-insurance/. June 30, 2020. Accessed September 28, 2020.