Nearly all Employer Group claims contain provisions that provide incentive for claimants to return to work part-time in some fashion. The monetary advantage is usually gained during the first 12 months.
The WIB provisions basically say that if a claimant returns to work part-time and has at least a 20% earnings loss, for the first 12 months, if monthly earnings + benefit is less than pre-disability earnings then claimants get to keep 100% of their benefit unreduced as well as their earnings. If monthly earnings + benefit is more than pre-disability earnings, the overage is subtracted from the monthly benefit.
For example: Claimant A’s pre-disability earnings were $1,000/month. While on claim she returned to work part-time and earned $400/month. Her monthly disability benefit is $500/month.
Did claimant A experience a 20% earnings loss?
$1,000 – $400/$1,000 = 60% Yes, she has at least a 20% earnings loss.
Therefore: monthly benefit ($500) + earnings ($400) = $900 which is less than pre-disability earnings. Claimant A will receive her monthly benefit of $500/month plus her earnings $400/month = $900.
What if Claimant A returned to work part-time and earned $1,500 per month? Does she have at least a 20% earnings loss? No, and benefits would not be paid.
Another example: Claimant A’s pre-disability earnings was $3,200 per month. She returned to work part-time and earned $2,000/month. Her disability benefit is $1600/month.
Does she have an earnings loss? Yes. ($3,200 – $2,000)/ $3,200 = 37.5% earnings loss.
Benefit Calculation: Monthly earnings ($2,000) + Disability benefit ($1,600) = $3,600
Pre-disability earnings ($3,200) Benefit + Earnings is $400 more than pre-disability earnings. Therefore currently monthly benefit is $1600 – 400 = $1,200
$1,200 benefit + $2,000 earnings = $3,175 Claimant loses only $25 from pre-disability earnings.
By the way, I get that these examples may be difficult to read through, but if you follow the examples carefully, you should be able to compute benefits for your situation.
WIB calculation advantages only continue for 12 months. Beyond 12 months WIB transfers to PPL (Proportionate Loss) compensating claimants only for the percentage of income lost.
In the above example, $3,200 x 37.5% = $1,200 Compensation for benefit lost.
Although the WIB, or Work Incentive Benefit Program is a definite advantage for the first 12 months, it does become less so after.
The unfortunate thing is that most claims reps today haven’t a clue how to calculate WIB or PPL and “blip” right over it when claimants return to work within the first 12 months. I just can’t imagine that claims handlers actually know about WIB or PPL at all.
Therefore, it’s up to you, the claimant, to find the WIB provisions in your Plan, and insist the calculations be done.