Who pays health insurance while on Long Term Disability? There are several potential scenarios, and the answer often depends on your employer’s policies, your group benefits plan terms, and whether you qualify for continued coverage under COBRA or another program. 

When someone becomes too sick or injured to work, Long Term Disability (LTD) benefits can provide critical income protection. However, while monthly benefits help replace lost wages, many people wonder how their health insurance will be handled once they are no longer employed full time. Understanding the connection between health insurance and Long Term Disability is essential to protecting your financial and medical future.

So, who pays health insurance while on Long Term Disability? The answer depends on the specifics of your employer’s benefit plans, your eligibility for government programs, and what legal rights may apply under federal law.

The Role of Your Employer in Continuing Coverage

In many cases, once you are on Long Term Disability and are no longer considered an active employee, your employer is no longer obligated to pay for your health insurance. Some employers may choose to continue coverage for a limited time, primarily if your disability was caused by a work-related injury or covered under a specific employment agreement. Others may offer coverage as part of a severance or disability support package.

However, most employers stop paying their portion of your premiums after a certain period of time. That means you could be responsible for the entire cost of your health plan unless you take steps to maintain coverage another way.

COBRA Continuation Coverage

If your group health insurance ends due to your change in employment status, COBRA (Consolidated Omnibus Budget Reconciliation Act) gives you the right to continue that coverage temporarily.

Here is how COBRA works:

  • You are eligible if your employer had 20 or more employees and you were covered under the group plan before becoming disabled.
  • You generally have 60 days to elect COBRA coverage after receiving the notice.
  • COBRA can extend coverage for up to 18 months, or longer in certain circumstances involving disability.
  • You are responsible for the full premium, including the employee and employer share, plus a small administrative fee.

Although COBRA can be expensive, it allows you to maintain the same coverage, doctors, and prescription benefits during a difficult time.

Private and Marketplace Insurance Options

If COBRA is not affordable or runs out, purchasing private insurance is another option. You can do this through:

Depending on your income level during disability, you may qualify for subsidies that lower the cost of monthly premiums under the Affordable Care Act (ACA).

Be aware that these plans may offer different networks and coverage terms than your previous group insurance, so reviewing plan details carefully is essential.

Medicare Eligibility Through Social Security Disability

If you also qualify for Social Security Disability Insurance (SSDI), Medicare becomes a long-term solution, but is not immediate. You must receive SSDI benefits for 24 months before Medicare coverage begins. Once eligible, you can enroll in:

  • Medicare Part A (hospital insurance)
  • Medicare Part B (medical insurance)
  • Optional Part D coverage for prescription drugs

If you are approaching this 24-month window, planning is crucial to avoid gaps in coverage.

Review Your Employer’s Policy Documents who pays health insurance while on long-term disability​

No two disability cases are the same. The best place to start is with your employee benefits handbook or plan summary documents. These will explain how your LTD benefits work alongside your health insurance and whether any employer-paid benefits continue after you transition to disability status.

Important questions to consider:

  • How long will the employer contribute to your health coverage?
  • Does your plan offer disability-specific health benefits?
  • Is there a timeline for switching to COBRA or private insurance?

If you are unsure how to interpret your policy documents, a disability attorney can help you understand your rights and make informed decisions.

Legal Help When Your Benefits Are at Risk

If your Long Term Disability benefits have been denied or your health insurance coverage is in jeopardy, it is important to act quickly. Legal guidance can make all the difference in protecting your financial stability and access to medical care. Whether you are facing a termination of coverage, a complex COBRA election, or an appeal of a denied LTD claim, an experienced attorney can help you understand your options and develop a plan to move forward.

If you are wondering who pays health insurance while on Long Term Disability, you are not alone. At Herbert M. Hill, P.A., we help clients understand how to protect their LTD income and health insurance coverage. Contact us today to schedule a consultation and learn how we can help you secure the benefits you deserve.