Those are included in the findings of insurance company data compiled by the Council for Disability Awareness. Its report, 2013 Long Term Disability Claims Review, includes analyses of information from 19 major insurers that provide disability insurance to more than 32 million workers.
Surprisingly, the report shows a reversal of a multiyear trend in the increase of new workers receiving disability payments. It fell by roughly 2.9 percent in 2012 after an increase of 3.5 percent in 2011. The reporting companies paid $1.4 billion to the approximately 154,000 newly disabled individuals in 2012.
The number of existing disability claimants also fell by about 2 percent in 2012 to about 662,000. The number of LTD claims had increased every year between 2008 and 2011.
At the same time, the actual dollar amount paid for disability was $9.4 billion, a 0.4 percent increase, according to the report. The number has increased for each of the past five years.
Additional findings. "Claims for those age 50 and older, mostly driven by those age 60 and older, have been increasing as a percentage of the total, which reflects an aging working population," the report says. "The percentage of claims from people in their 40s has been trending down, while the percentage from people in their 60s has been trending upward."
Claims decreased as a percentage from the total among the manufacturing, transportation, retail trade, and financial services industries. However, trends were up among the health services, education services, and public sectors. Work-related claims represented about 5 percent of the claims, a number that has held steady since 2008.
Women made up a majority of new claims, continuing a trend. In 2012, 54 percent of new claims were for women while 46 percent were for men.
The number of insured lives has increased, going up 1 percent to 32.3 million in 2012, the report says. Previously, insured lives had declined by 2 percent in both 2011 and 2010, and 3 percent in 2009.
Types of disabilities.
The most common causes of existing LTD claims in 2012 in order were:
- Diseases of the musculoskeletal system and connective tissue -- 30.7 percent of existing claims. These also continue to be the leading cause of new disability claims by a large margin. Included were arthritis, herniated or degenerated disk, back pain, spine/joint disorders, cartilage sprain, tendinitis, fibromyitis, osteoporosis, rheumatism, scoliosis, and sciatica.
- Diseases of the nervous system and sense organs -- 14.2 percent of claims. These included multiple sclerosis, epilepsy, paralysis, Alzheimer's disease, Parkinson's disease, amyotrophic lateral sclerosis, Bell's palsy, Guillain-Barré syndrome, eye disorders, including diabetic retinopathy and macular degeneration, and ear disorders, including balance-related disorders such as Ménière's disease.
- Diseases of the circulatory system -- 12.1 percent of claims. These included hypertension, heart disease, heart attack, stroke, aneurysm, coronary artery disease, and phlebitis.
- Cancer -- 9 percent of existing claims. Breast cancer, prostate cancer, lymphoma, Hodgkin's disease, leukemia, and tumors were included.
The percentage of disabling mental disorders decreased slightly in 2012, reversing a two-year trend. Where they represented 9.1 percent of new claims filed in 2011, they accounted for just 8.9 percent of the newly filed claims in 2012. There was also a decrease in the percentage of existing disability claims from mental disorders, 7.7 percent in 2012 from 8 percent in 2011. Mental disorders include depression, schizophrenia, drug/alcohol/substance abuse, bipolar disorder, anxiety, and obsessive-compulsive disorder.
SSDI. The number of disabled workers receiving Social Security disability insurance payments is continuing to increase, according to the report. However, the growth in covered workers, "which is the source of SSDI's revenue, remains modest."
Of note is that the number of new SSDI benefit applications and benefit awards declined in 2012 and 2011 after rapid expansions from 2008 to 2010.
"In its 2012 annual report, the Social Security Board of Trustees projected the SSDI trust fund will run out of money by 2016, two years earlier than the projection the same group made in 2011," the authors wrote. "The implication is that, without reforms, benefits to disabled workers will have to be reduced."
The participating insurers noted a number of concerns going forward. While they generally expect claim trends to improve gradually, they disagreed as to whether claim patterns would return to pre-recession levels or stabilize at higher levels.
Among the most commonly mentioned concerns were:
- The low interest rate environment.
- Low claim recovery rates.
- Increased claim incidence.
- Difficulty finding appropriate job opportunities for recovering claimants returning to work.
By Nancy Grover
Read more at the WorkersComp Forum homepage.
August 26, 2013
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