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Disability Insurance Duo: --Legislation With Wide-Ranging Effects; --Marketing Efforts To Raise Awareness

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Stimulus, Pending Bills Could Impact Private Insurers By Affecting SSDI

Passage of a stimulus bill provision that will help laid-off workers continue group health coverage is the benefits event that has gotten the most attention in recent weeks.

But the new Congress also has been considering and passing bills that could affect the disability insurance community.

The stimulus bill, for example–H.R. 1, the American Reinvestment and Recovery Act–includes a provision that could help increase the efficiency of the Social Security Administration and the Social Security Disability Insurance claim determination process.

Disability insurers care greatly about SSDI, partly because insurance executives believe their customers deserve to be treated better by the SSDI system, and partly because many disability insurers coordinate benefits with SSDI benefits. Disability insurers have complained in recent years about growing delays in SSDI claim processing efforts.

ARRA provides $1 billion in extra funding for the SSA, with $500 million to be spent on replacing the SSA National Computer Center and $500 million to be spent on improving disability and retirement administrative operations.

Lawmakers are hoping the SSA will use some of the money to build tools for handling electronic medical records in the SSDI electronic claim file system.

“These additional funds will allow SSA to process a growing workload of claims in a timely manner and to accelerate activities to reduce the backlog of disability claims,” officials write in the conference report that describes the final version of H.R. 1.

Drew King, president of JHA, Portland, Maine, a disability risk management and consulting firm, says the extra SSA funding should be helpful. “The need to re-do their systems is very acute,” King says, citing reports that the main SSA computer system was set up in the early 1970s.

ARRA also includes a federal rehabilitation services and disability research provision, which provides $680 million for state vocational rehabilitation services programs. In some cases, those programs might help private DI claimants with return-to-work efforts.

ARRA also:

–Requires the government to pay a one-time “economic recovery payment” of $300 to each eligible adult SSDI recipient as well as to each adult beneficiary of other Social Security programs.

–Will require the Secretary of Health and Human Services to conduct a study within 2 years of potential use of technology to help seniors and individuals with disabilities.

Here is a rundown of some other bills that could affect disability insurers and disability insurance claimants:

–The SSA has eliminated the usual 2-year SSDI waiting period for some applicants with catastrophic health problems. H.R. 678 (Rep. Robert Filner, D-Calif.) would require the SSA to waive the usual 2-year SSDI benefits waiting period for applicants who have Huntington’s disease. H.R. 723 (Rep. Richard Neal, D-Mass.) would require the SSA to eliminate the 2-year waiting period for applicants suffering from disabling burn injuries.

–H.R. 33 (Rep. Michael McIntyre, D-N.C.) would change the Social Security Act to eliminate the 5-month waiting period for entitlement to disability benefits and eliminate reconsideration as a step that must come between the initial SSDI benefits determinations and later hearings on those decisions.

–H.R. 307, the Christopher and Dana Reeve Paralysis Act (Rep. Tammy Baldwin, D-Wis.) would set up paralysis research consortia, support paralysis treatment centers, and promote efforts to improve the care of people who are dealing with paralysis.

–H.R. 769 (Rep. Nita Lowey, D-N.Y.) would help people who give up paid work to care for disabled relatives by crediting them with 5 years of “deemed wages” for purposes of computed Social Security retirement benefits.

–H.R. 772 (Lowey) would allow disabled widows to collect full Widows’ Insurance Benefits and disabled widowers to collect full Widowers’ Insurance Benefits regardless of age. Today, widows and widowers collect full widow or widower benefits only if the widows or widowers are over age 50.

Groups Work To Help Consumers To Think About The Unthinkable

One strategy for insurance producers who want to help protect more Americans against the risk of disability is to tie their marketing efforts to big, national campaigns.

The Life and Health Insurance Foundation for Education, Arlington, Va., will hold the next annual Disability Insurance Awareness Month campaign in May.

Other nonprofit groups, especially those formed to increase awareness of specific health problems and categories of health problems, organize their own awareness days, weeks and months.

The American Heart Association, Dallas, for example, hosts a National Start! Walking Day in April.

The Brain Injury Association of America, Vienna, Va., is promoting March as Brain Injury Awareness Month. Throughout the year, it works with the Silver Ribbon Coalition, La Habra, Calif., to distribute a collection of Silver Ribbon products that highlight brain injuries and other conditions that hurt the brain.

Some insurers in the disability insurance market also are running more ads about the product, especially in conjunction with the LIFE disability awareness month.

The LIFE campaign offers Web seminars for disability insurance producers, a producer toolkit that includes a collection of marketing tips, and a drive to send audio public service announcements to 1,000 radio stations throughout the United States.

The disability PSAs “get very good play,” says Marvin Feldman, LIFE president.

And Feldman reports that the LIFE Web site, at, attracted more than 1 million hits in 2008.

Producers typically try to amplify the effects of awareness days, weeks and months by running print advertisements in local publications during those periods; organizing seminars; and offering themselves to local radio stations and television public affairs programmers as income protection experts.

Other strategies could include reaching out to young parents through school parent night seminars and speaking engagements, or setting up promotional tables on downtown street corners or inside malls.

Some producers communicate through jewelry.

LIFE, for example, has developed blue and orange gel bracelets that bear the slogan “Life happens.”

One agent who works with LIFE starts conversations about disability insurance by wearing several bracelets on each arm, according to Jim Edwards, a spokesman for the National Association of Insurance and Financial Advisors, Falls Church, Va.

John Nichols, president of Disability Resource Group Inc., Chicago, a firm that sells individual, small group and multi-life disability products, says the disability awareness month campaign and other national marketing efforts “absolutely” are helping to increase awareness of the need for income protection.

“I try to use [LIFE's] information on an ongoing basis,” Nichols says.

But Bradley Buechler, a vice president involved with sales of individual disability products at Mutual of Omaha Insurance Company, Omaha, Neb., says he believes a “very limited distribution bandwidth” is limiting the effectiveness of the disability awareness month campaign and other disability insurance marketing intiatives.

Today, Buechler says, “we don’t have a whole lot of producers that are willing to sell the product.”