1. DMEC Boston Chapter Meeting October 16, 2014 Dan Shaughnessy, Chapter President

2. Our Mission To advance strategies and resources that improve workforce productivity by minimizing the impact of absence and disability.

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6. Connecting you and your company with today’s leading disability and absence management professionals. Providing the trusted and proven tools, knowledge and resources that you need to successfully manage employee disability and absence. Delivering timely and topical webinars, conferences, white papers and other resources which allow you to effectively manage employee disability, absence and return to work. Join today at www.dmec.org!

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12. Tools and Tactics Webinars FREE to Members! DMEC’s Tools & Tactics Webinars provide practical and actionable information and cost-effective, innovative solutions focused on integrated disability, absence management, and return to work strategies. Each session delivers valuable take-aways that participants can use immediately. DMEC members enjoy this benefit free of charge. Past webinars are recorded and archived and made available for download to members. For 2014 Schedule: Go to dmec.org » Conferences & Events » Calendardmec.org

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16. Virtual Education Forum (VEF) Sponsored by: Save the dates: Go to dmec.org » Conferences & Events » Calendardmec.org The Virtual Education Forum webinar series explores how to develop and successfully manage disability, absence management and return to work programs. Sponsored by Unum, each webinar brings together DMEC member employers, suppliers and industry experts to share their knowledge and experiences in a convenient online format.

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20. Visit our Bookstore for Useful Resources! Tools of the Trade: Compilation of Programs and Processes for the Absence, Disability, Health and Productivity Professional Tools to help build the business case for programs and move projects forward. Including illustrations, charts, statistics, best practices, employer checklists, and references to credible industry sources in an easy-to-use desk reference. Foundation for Optimal Productivity: The Complete Return to Work Program Manual Numerous industry experts, case studies and flow charts provide the information to set up a new program or improve an existing plan. Order online from dmec.org » Resources & Info » Bookstoredmec.org

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22. A professional designation in disability and absence management developed by IEA and DMEC. CPDM offers an in-depth curriculum devised by industry experts, providing the unique skills required for effective disability and absence management. Three courses: CPDM 1 - Essentials of Disability Management CPDM 2 - IDAM Tools and Concepts CPDM 3 - Disability Management Implementation and Sustainability. Learn more at dmec.org » Resources & Info » Certificationdmec.org Certified Professional in Disability Management (CPDM)

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24. DMEC Boston Chapter Meeting Social Security Past, Present, and Future October 16, 2014 Presenters: Barbara Mountain, Doherty, Cella, Keane LLP Vic Arruda, Esq. Social Security Advocates for the Disabled

25. 25 Agenda The Past – What is Social Security – Why was it created The Present – How does Social Security affect other types of benefits – Disability Benefits – Why apply: the advantage – Who is receiving benefits The Future – Opportunities, Options, and Obstacles Questions/Discussion

26. 26 Social Security History 1935 Social Security signed into law by Franklin D. Roosevelt – Creation of an Insurance Program for Workers – Age 65 - Retirement benefits 1939 Amendments – Dependent benefits added for spouse and children of a retired or deceased worker 1950 Amendments – Cost of Living Adjustments began – 1954 Disability Freeze began, but not monthly benefits – 1956 Disability benefits for age 50-64

27. 27 Social Security History (continued) 1960 Disability Benefits for all ages 1961 Retirement could now be taken at 62 For women this changed in 1956 1965 Medicare 1970 – Social Security Administration began to administer Supplemental Security Income 1980’s The First Social Security Financial Crisis – Reagan – Greenspan Commission – Numerous “tweaks” Taxation of SS benefits Including taxation of Federal Employees Increase in Retirement age in next century (those born 1938) Children Benefits end at age 18 or 19 if still in high school Allowed Inter-fund borrowing

28. 28 t How does SS affect other types of benefits? Coordination of Benefits Long Term Disability – Most Group Contracts and some Individual Contracts have a Social Security Offset Provision Primary Offset is only for what the claimant receives from SS Family Offset is for what claimant receives and any dependent receives based on the claimants SS Disability or Retirement benefit Workers Compensation – Typically when a person receives Social Security disability and Workers Compensation, the Social Security Benefit is reduced based on the WC However there are 10 Reverse Offset States, in which the WC may be reduced by the receipt of Social Security benefits – Florida, Colorado, Minnesota, Wisconsin, Louisiana, New Jersey, Oregon, North Dakota, Washington, Montana, and Ohio

29. 29 Social Security Disability Insurance Income replacement program for disabled workers Not at your Full Retirement Age (FRA) Meets Insured Status (Fully Insured) Disability Insured (5 out of 10) Filed an Application Disabled – Disability expected to last at least 12 months or result in death – Can not perform any substantial, gainful work ($1040 month) 5 month waiting period Medicare 24 months after the date of entitlement – ESRD and ALS almost immediately

30. 30 Social Security Dependent Benefits Aged Spouse Benefits Age 62 or older Not entitled to own benefit amt. greater than 50% of the primary amount Child in Care Benefits Have a child under the age of 16 in household 50% of the primary award Children’s Benefits Child of the Claimant Unmarried Under 18 or 19 and still in high school 50% of the primary award

31. 31 Advantages to Filing Medicare Health Insurance after 24 months - critical protection for your clients and their employees Disability Freeze Drops out the years of low earnings from future computations. COLA More money in the claimant’s pocket Dependent Benefits Protection for Family Members Children, Aged Spouse, Child in Care Additional income through COLA’s Work Incentives

32. 32 Asking a Claimant to File For Social Security Communication is the key to avoiding a mixed message: Filing for SS is a requirement in the contract/policy Completely separate program from STD or LTD No effect on the action plan of the LTD claim The goal is RTW, if appropriate: however, Social Security is extremely important protection for the claimant, customer and the carrier if the claimant is unable to return to work. But why would a claimant want to file? 1. Know the Advantages to filing, and 2. Understand how a SS Representative can help

33. 33 DI 13010.105 RTW within 1 year of onset Work performed within 1 year of onset should be reviewed and possibly revised for either a denial of benefits or a later onset if RTW was unsuccessful Work performed on or after month of entitlement and after 12 months of onset is protected by TWP Work performed after 5-month waiting period and after final determination date is protected by TWP

34. 34 DI 13010.105 Date of Final Determination The date the Notice of Decision was received by the Beneficiary Presume notice was received on the 5 th day following the date notice was mailed, unless the exact date notice was received can be established. Decision is typically SSA’s Notice Of Award

35. 35 Example: Maurice 63 YO Male, Post Graduate Degree, Myelofibrosis Date Last Worked: Oct 15, 2013 Date Application Filed: Mar 14, 2014 Date RTW: Apr 28, 2014 (PT) Date of SSDI Award: Jun 9, 2014 Is Maurice’s Work Activity in April Protected By TWP?

36. 36 Maurice Cont. RTW Apr 28, 2014

37. 37 Maurice is NOT protected by TWP

38. 38 Maurice is not protected by TWP Onset is October 15, 2013 Statutory Waiting Period Ends March 31, 2014 Decision is Dated June 9 th 2014 RTW is April 28 th (after 5-Month Waiting Period, but before date of Decision)

39. 39 Example 2: Linda 56 YO Female MD, Post Graduate, Breast Cancer Date Last Worked: Dec 10, 2013 Date Application Filed: May 26, 2014 Date RTW: Sep 2, 2014 (PT) Date of SSDI Award: Jul 13, 2014 Is Linda’s Work Activity Protected By TWP?

40. 40 Linda Cont. RTW Sep 2, 2014

41. 41 Linda IS protected by TWP Onset is December 10, 2013 Statutory Waiting Period Ends May 31, 2014 Decision is Dated July 13 th RTW is September 2 nd (after 5-Month Waiting Period and after date of Decision)

42. 42 Who is Receiving Social Security? Social Security Beneficiaries 59 million beneficiaries in pay A record 9 million workers—over 5 percent of the U.S. workforce were receiving SSDI benefits at the conclusion of 2013. Who is Receiving Social Security Benefits

43. 43 SSDI Awards by Diagnosis Category: Avg. Age: 53 Avg. SSDI: $1146

44. 44 Then and Now: Growth in the SSDI Program Over the past 40 years, the number of disabled workers who receive benefits from the SSDI program has increased more than six-fold.

45. 45 What Are the Drivers of SSDI Growth? 5 Factors Account for the bulk of Growth in DI Rolls Population Growth Population Aging Growth in women’s labor force participation Rise in retirement age Increase in women’s rate of receipt Other Factors that have Contributed to DI Growth Legislative Changes Economic downturn Lower death rates (beneficiaries stay on the rolls longer) DI Recovery Rates (less funding for continuing disability reviews)

46. 46 SSA Award Rates 2013 SSA Award Rates 2012 SSA Award Rates 2011 SSA Award Rates 2010 Initial Level 33% 34%35% Recon11%12% 13% ALJ Hearing 48%52%58%62% Appeals Council 1%2% The ratio of new SSDI awards to the new SSDI applications has been trending downward since the late 1990s. The ratio was 41% in 2001 and 33.5% in 2013 From 2001 to 2010 the number of applications for new SSDI benefits rose by 92 percent, from 1.5 million in 2001 to 2.9 million in 2010. Since 2011 applications are decreasing falling to 2.6 million in 2013 >700,000 claims backlogged awaiting a hearing (average workday 19) Social Security Disability Award Rates

47. 47 Social Security Disability Award Rates

48. 48 Questions Regarding the Future of the SSDI Program Is the SSDI program facing a crisis? What if the Social Security Disability Insurance Trust Fund runs out of money? Will the Social Security Disability Insurance Trust Fund run out of money? What options are the Congress and the President considering – or likely to consider?

49. 49 Social Security Board of Trustees 2014 Annual Report The DI Trust fund will have sufficient assets to pay scheduled disability benefits only until some point in the 4 th quarter of 2016, absent action to forestall Trust Fund asset depletion.  At that point 81% of benefits payable If the Trust Funds are reallocated full benefits are payable until 2033  At that point if nothing is done, 77% of benefits are payable

50. 50 60 Minutes Segment: “Disability USA”

51. 51 ALJ Dispositions 2010 to 2013

52. 52 Recent Anti-Fraud Legislation Democratic Bill H.R.4090 The SS Fraud & Error Prevention Act February 2014 Rep. Xavier Becerra (D-CA) Overview A secure stream of dedicated administrative funding without the need for annual appropriations Advanced IT improvements to detect fraud Cooperation with other Agencies, state and local governments & private business (LTD Insurers?) Developing a Culture of prevention & detection Rewarding SSA staff who detect and refer fraud

53. 53 Anti-Fraud Legislation Cont. Republican Bill H.R. 5260 The Stop Disability Fraud Act of 2014 July 2014 Rep. Chairman Sam Johnson (R-TX) Targets Representatives 74% of Claimants are represented as opposed to 37% in 1977 SSA paid $1.5 Billion to representatives in 2013 Overview Establish CDI (Cooperative Disability Investigations) units in all 50 states (currently 25 units in 7 states) Prohibit the consideration of any unlicensed or sanctioned physician or health practitioner Criminalize conspiracy to commit SS Fraud Doctors, Lawyers, interpreters, SSA employees

54. 54 H.R. 5260 Continued Representative Sanctions Immediate disqualification for a felony or crime of moral turpitude in a Federal or State court Suspension is immediate (current process is the reverse) Fine and sanction representatives for failure to comply with Commissioner's Rules & Regulations Civil fine of not more than $7,500.00 for knowingly: Charging Demanding Receiving Collecting Representative Fee in excess of the maximum fee proscribed by Commissioner

55. 55 H.R. 5260 Continued Strengthen Program Integrity Conduct a pre and post quality effectuation review of ALJ decisions to ensure compliance with regulations and other guidance (emphasis supplied) Increased Transparency with SSA and American Public Productivity Times Processing Times Pending workloads Decision outcomes Broken down by individual, hearing office, SSA Region, SSA Commissioner can refer denied individuals to appropriate private or public entity for: Employment Services Vocational Rehabilitation Other services

56. 56 What to do about 2016 DI shortfall? Trust Fund Reallocation Since 1956 it has been done 11 times In light of the projected depletion of the DI Trust Fund in 2016, the Trustees again call upon Congress to act : Therefore, legislative action is needed as soon as possible to address the DI program’s financial imbalance. Lawmakers may consider responding to the impending DI Trust Fund reserve depletion as they did in 1994, solely by reallocation the payroll tax rate between OASI and DI. Such a response might serve to delay DI reforms and much needed corrections for OASDI as a whole. However, enactment of a more permanent solution could include a tax reallocation in the short run

57. 57 The Social Security System Needs Reform 8 Proposals for long term solvency -Pros and Cons 1. Raise Full Retirement age (18-44%) 2. Recalculate COLA (16-23%) 3. Increase Payroll Tax Cap (36%) 4. Eliminate the Payroll Tax Cap (86%) 5. Means Test for High Earners (11%) 6. Increase Payroll Tax Rate (64%) 7. Tax Flexible Spending Accounts (10%) 8. Cover all new Government Workers (8%)

58. 58 Unemployment Compensation (UI) & SSDI July 2012 GAO Report In Fiscal Year 2010, 117,000 Americans Received both SSDI and UI The combined payout was over $850 Million Funding for Unemployment comes from Federal Unemployment Tax Act (FUTA) Current SSA and Federal Regulations provide no authority for SSA Commissioner to treat receipt of UI as a Public Benefit Worker’s Compensation deemed Public Benefit Long Term Disability deemed Private Benefit

59. 59 Legislation to close UI SSDI Loophole Senate Bill S. 1099 The Reducing Overlapping Payments Act June 2014 Sen. Tom Coburn (R-OK) Overview Bill would suspend SSDI for any month in which claimant received Unemployment Benefits SSDI is generally higher than UI Coburn estimates individuals would forgo the receipt of UI in favor of the higher SSDI benefit SSA estimates a savings of $2.9 Billion from 2014 – 2023

60. 60 Unemployment Legislation Cont. House Bill H.R. 1502 The Social Security and Unemployment Benefits Double Dip Elimination Act April 2013 Rep. Sam Johnson (R-TX) Overview Bill would treat receipt of Unemployment as engaging in SGA for that calendar month. SSDI Onset would be amended to a point after UI benefits terminated. Entitlement to Medicare affected as well Effect on Quarters of Coverage? Receipt of UI would be considered 1 month of TWP SSA estimates a savings of $8 Billion in SSA benefits from 2014 – 2023 and $2.3 Billion in UI benefits

61. 61 Unemployment Legislation Cont. Amendments to Existing Bills Senate Amendment 2631 in Emergency Unemployment Compensation Act January 2014 Overview SSDI benefits are reduced dollar-for-dollar by receipt of UI during any calendar month beneficiary received both SSA estimates a savings of $1.17 Billion in SSA benefits from 2014 – 2023

62. 62 Continuing Disability Reviews (CDR) Initial determination is made at DDS level Beneficiary informed that Disability Terminated as of X date Cash benefits continue for 2 additional months Beneficiary has 10 days to elect interim SSDI benefits pending appeal

63. 63 CDR (Interim Benefits) cont. Right to Interim Benefits is statutory Matthews v. Eldridge (1976) Congress granted right to Interim Benefits in 1984 20 C.F.R. 404.1597 Interim benefits are not authorized for a RTW CDR

64. 64 CDR (Interim Benefits) cont. Right to continue Interim Benefits must be made at each level of the appeal process Good Cause for late request is available Only Beneficiary can request. Claimant’s Representative cannot make request. A Representative Payee can make the request as both will be responsible for the Overpayment

65. 65 CDR (Interim Benefits) cont. SSA Form-795 Right to Interim Benefits I understand that if I lose my appeal, I will be asked to pay this money back including all checks I received after my period of disability ended through the month such benefits were received if the appeal is not decided in my favor.

66. 66 Interim Benefits Strategy For LTD Insurer Option 1 Revert to paying a full Un-reduced LTD Benefit pending the outcome of the appeal?? OR Option 2 Encourage claimant to continue interim SSA benefits pending outcome of appeal?

67. 67 OPTION 1 Full Un-reduced LTD Benefit LTD reverts to Paying Full Unreduced benefit? MIB Due ClientSSDI offset Net Pmt $3,000.00$00 $3,000.00 Appeal is resolved in 10 Months

68. 68 OPTION 1 Full Un-reduced LTD Benefit Cont. 10 Months Later Appeal is DENIED by ALJ (SSDI Benefits Terminate) Impact on LTD Carrier? None, Carrier continues to pay full un-reduced LTD benefit pending appeal of ALJ’s decision Does carrier initiate a follow up Any Occupation analysis?

69. 69 OPTION 1 Full Un-reduced LTD Benefit Cont. 10 Months Later Appeal is Successful (ALJ Continues SSDI Benefits) SSA Pays claimant a lump sum of $20,000.00 and continues monthly SSDI benefits. Claimant incurs a $20,000.00 LTD Overpayment.

70. 70 OPTION 2 SSA Pays Interim Benefits SSA pays claimant Interim Benefits pending appeal MIB Due ClientSSDI offset Net Pmt $3,000.00$2,000.00 $1,000.00 Appeal is resolved in 10 Months

71. 71 OPTION 2 Interim SSA Benefits Encourage claimant to elect interim benefits? 10 Months Later Appeal is Successful (ALJ Continues SSDI Benefits) No Change for LTD Carrier ~ Carrier resumes paying reduced LTD benefit

72. 72 OPTION 2 SSA pays Interim Benefits Cont. Appeal is DENIED by ALJ (SSDI Benefits Terminate) SSA immediately issues Overpayment letter to claimant $20,000.00 SSDI O/P ($2,000./mo x 10 months)

73. 73 OPTION 2 SSA pays Interim Benefits Cont. $20,000.00 SSDI Overpayment How does claimant repay SSA?

74. 74 OPTION 2 SSA pays Interim Benefits Cont. LTD Carrier is in possession of $20,000.00

75. 75 Too Big to Fail National Academy of Social Insurance Study 74% of Republicans and 88% of Democrats agree it is “critical to preserve Social Security - even if it means increasing Taxes.” 59 Million Beneficiaries $852 Billion dollars per year $71 billion each month