Long term disability is not the same as workers comp in Wisconsin for employees hurt on the job.

Short-term and long-term disability insurance is private disability insurance which is separate from either workers’ compensation insurance or social security disability insurance.  Short-term and long-term disability is purchased by you or your employer often as part of a cafeteria benefits package.  This private disability insurance has its own definition of disability and has nothing to do with whether the injury or disability occurred at work.

Short-term disability insurance pays a percentage of your salary if you become temporarily disabled, meaning that you are not able to work for a short period of time due to sickness or injury (excluding on-the-job injuries, which are covered by workers compensation insurance). A typical short-term disability insurance policy provides you with 60 percent of your pre-disability base salary, for three to six months.

Long-term disability coverage picks up where short-term disability insurance leaves off.    Once the short-term benefits expire (generally after three to six months), long-term disability insurance pays a percentage of your salary, usually 50 to 60 percent, depending on the policy. The benefits last until you can go back to work or for the number of years stated in the policy.  Some policies pay out as long as you are disabled until age 65.

Short and long-term disability insurance often have a reduction clause reducing these private disability benefits by any amounts received in workers’ compensation or SSDI benefits.

Also, if at hearing a contested workers comp claim is won, the worker’s comp judge will order repayment of short or long-term insurance payments out of a TTD benefit award if the nonindustrial policy so provides. See Wis. Stat. § 102.30(7).  Although short and long-term carriers are not a party to the proceeding under section 102.30(7)(b) , they are routinely reimbursed when appropriate under section 102.30(7)(a) . Moreover, the DWD will not approve a compromise simply to permit the worker’s compensation carrier to avoid liability to the group carrier.  In any case, short or long-term insurance carrier, as a nonparty, is not bound by the result of the worker’s compensation proceedings. See Udelhofen v. John Hancock Mut. Life Ins. Co., 128 Wis. 2d 216 (Ct. App. 1985).

Generally, a workers compensation settlement will benefit the injured worker even if it reduces his or her long-term disability payments because it is often not a dollar for dollar reduction.

At McCormick Law Office in Milwaukee, Wisconsin our attorneys ask injured workers if they have or are receiving short or long-term disability payments.  We can also represent clients in applying for or appealing social security disability insurance claims.