Untangling Income Replacement For Disabled Physicians

MARCH 06, 2018
Heidi Moawad, MD
disability,insurance,asset,disabilityinsuranceDisability can hit anyone at anytime. Physicians assess patients and fill out disability forms that patients need in order to qualify for income replacement. All physicians who work with disabled patients are familiar with the angst that patients and their families suffer from when income drops as a result of disability. 

There are several details that come into play when physicians themselves become disabled. Familiarity with these issues and the most common pitfalls can help prevent wasted time and energy when navigating the process. 

Government Benefits vs. Private Insurance Benefits 
If you have disability insurance, it is likely that you are entitled to receive both social security benefits and benefits from your private insurance plan. Government benefits do not require you to purchase a plan prior to becoming disabled, but the amount of income replacement that you are entitled to receive from your disability insurance company and from the government may be impacted by the amount you receive from the other. 
  • Pitfalls: Some doctors do not want to pay disability insurance premiums, and thus find themselves scrambling when a surprising injury or illness hits. In order to receive disability benefits from a private insurance plan, you must have signed up for a disability insurance policy prior to becoming disabled. 
  • Solutions: While there is nothing you can do to obtain a disability policy after the fact if you did not already have disability insurance, you can obtain disability insurance without necessarily incurring a high price tag if you plan well. For example, you may be able to preemptively discuss a better disability policy from your employer upon signing or renewing your contract.
Specialty Specific Coverage 
You are a physician, but your skills and certifications go beyond those that you attained when you earned your MD or DO. Physicians who are not able to practice their own specialty are not qualified to practice other specialties even if those other specialties are less lucrative, less competitive or require shorter and less intense training programs. 
  • Pitfalls: Some disability policies only replace incomes for individuals who are severely disabled and who cannot work at all. 
  • Solutions: Even if you are only partially disabled, you might have a condition that prevents you from carrying out the duties of your own specialty. Therefore, it is important to get a specialty specific disability policy. The burden of verifying that your disability prevents you from practicing your specialty may be tiresome in the short run but certainly will pay off in the long run.
Asset Limitations 
If you have worked for a long time, you may have substantial assets — particularly if you have invested well and avoided overspending throughout the years. 
  • Pitfalls: It may seem like a type of irony if your financially wise habits disqualify you from receiving the same income replacement that you may have been able to collect if you had spent all of your money frivolously. 
  • Solutions: Putting your money into certain accounts designated for your retirement and for your childrens’ educational costs may help offset some asset liabilities for some insurance plans. Asset exclusions and policies are spelled out clearly when it comes to government disability benefits and they are also spelled out clearly by your disability insurance policy. Planning ahead and looking at the fine print is a valuable investment of your time.
After having helped patients navigate through illnesses and injuries that lead to disability, disabled physicians have to deal with physical or mental illness along with loss of income and self-esteem. Resources for physicians dealing with disability can be found here.  

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