Mind the Gap: Why Your Employer’s Disability Coverage May Fall Short

When it comes to your financial health, a significant risk often hidden in plain sight might be in your employer’s long term disability benefit package. As an employed physician, you may assume your income is fully protected because you already have disability coverage through work. It feels like a solid foundation, and in many ways, it is. But as your career and income grow, that foundation can develop significant gaps.

Seeing long term disability insurance on a benefits summary often creates a false sense of security. Once you calculate the after-tax and after-cap reality, it becomes clear that employer coverage is merely a starting point. The TMA Member Long Term Disability Insurance plan, issued by The Prudential Insurance Company of America, is designed to bridge the gap and provide comprehensive income protection by supplementing your existing work benefits.

Looking Beyond the Benefits Summary

TMA Member Long Term Disability Insurance is not a generic, off-the-shelf policy. It was designed specifically for physicians who require stronger income protection than an employer plan typically provides. Looking beyond the surface of your benefits summary can help you identify several critical factors that impact your coverage:

The 60% Rule: Most employer plans typically replace about 60% of your base salary. On the surface, that sounds manageable. However, if your employer pays the premium, those benefits are taxable as income. When you factor in federal taxes, you may be left trying to maintain your household, pay your mortgage, and manage student loans on less than half of what you currently take home.

In contrast, when TMA Member plan premiums are paid with after-tax dollars and not deducted as a business expense, benefits are generally received tax-free. This preserves more of your income when you need it most. For employed physicians, this is a vital distinction: because employer-provided benefits are often taxable, the amount you actually receive could be significantly lower than expected.

Hidden Caps: Some group plans impose a monthly benefit cap, often set at $10,000. If you earn more than $200,000 a year, any income above that amount is essentially unprotected.

Offsets: Verify the fine print to see if your policy includes offsets. This means if you receive Worker’s Compensation or Social Security Disability benefits, your employer-paid benefit is reduced by those amounts. Instead of adding to your safety net, those extra resources simply replace what the insurance company would have paid you.

The "Any Occupation" Clause: Many employer-provided plans offer own-occupation coverage, but only for a limited time, typically the first 24 months. After that window closes, the policy definition often switches to "any occupation." This means that if you are physically able to earn an income performing any type of work, even outside of the medical field, your benefits could be terminated.

Lack of Portability: One of the most overlooked risks of group coverage is a lack of portability. Your employer’s coverage is a perk of your current job; if you move to a different hospital system, join a new group, or transition to private practice, that protection stays behind. By securing your own supplemental plan, you ensure your protection is tied to your career, not your employer.

You shouldn’t have to spend your limited free time vetting insurance markets or worrying about whether your family is fully protected. We have made it our job to guide you beyond your employer benefits to help make sure your coverage is as comprehensive as it needs to be.

Specialized Coverage for the Employed Physician

We have developed a solution to strengthen your existing coverage, bridging the gap between a standard disability policy and the robust protection your career requires. In a time of rising costs and increasing financial responsibilities, partial income coverage is a risk you cannot afford.

Using the TMA Member Long Term Disability Insurance plan to supplement your current coverage can help you be less financially vulnerable and more prepared as you strive to secure your family’s future.

Set up your safety net today and let us help you bridge the gap in your coverage by calling 800-880-8181, Monday through Friday, 8:00 AM to 5:00 PM CST to speak with an experienced advisor.