Since 2005, the Council for Disability Awareness (CDA) has conducted a proprietary annual review of long-term disability claims among the U.S. working population. The purpose is to identify continuing or emerging trends, and to share them with interested audiences. The 2010 CDA Long-Term Disability Claims Review summarizes quantitative and qualitative long-term disability insurance claims data from the annual CDA member long-term disability claims survey. Also included is selected worker disability data from the Social Security Disability Insurance (SSDI) program. Sixteen CDA Member Companies, representing roughly 75% of the commercial disability insurance marketplace, participated in the 2010 survey.
CDA Survey Findings: Summary of Key Findings from Proprietary CDA Member Company Data
$8.1 billion in long-term disability insurance claim payments was paid to disabled individuals by CDA Member Companies in 2009, representing a 2.9% increase over 2008.
Impact of the economic downturn on disability claims: Most reporting companies suggest they have observed little evidence that the recession has broadly impacted claims in any significant way. Most companies report little change in claim incidence or termination rates.
Impact of the economic downturn on worker psyche: The economic downturn has had a prolonged effect on U.S. workers. Swollen unemployment rolls and media coverage of out-of-work Americans has helped raise awareness of the importance of every worker’s income. Wage earners are holding onto jobs if they can, and savings rates increased in 2009 to over 4% for the first time in over a decade. A looming sense of economic vulnerability has elevated the importance of taking responsibility for planning for personal financial security. Eroded retirement accounts, continued economic volatility, news of home foreclosures and a stubbornly high unemployment rate have raised American workers’ awareness of financial risk and made planning for an income-limiting disability more important than ever.
About 100 million workers have no private disability insurance.
Other CDA Survey Findings
A record 627,000 disabled individuals received long-term disability insurance payments from CDA Member Companies in 2009, representing a slight increase over 2008.
95% of reported CDA Member Company disability claims are not work-related.
31.2% of individuals receiving long-term disability insurance from CDA Member Companies in 2009 did not qualify for SSDI payments compared to 31.7% not qualifying for SSDI in 2008.
New cancer, nervous system–related and musculoskeletal claims trended up slightly from 2008 to 2009.
Accident-related claims dropped rather significantly as a cause of new disability claims from 2008 to 2009. This may be related to lifestyle changes, possibly driven by the economy.
Musculoskeletal/connective tissue disorderscontinue to rank as the leading cause of disability. (This category includes claims caused by neck and back pain; joint, muscle and tendon disorders; foot, ankle and hand disorders; etc.)
Cancer is the second leading cause of new claims but is the fourth leading cause of existing claims.
Cardiovascular/circulatory problems have increased slightly in 2009 as a cause of new claims after three years of declines, and are the third leading cause of new and existing disability claims. (Examples in this category include claims caused by heart and circulatory disorders, strokes, etc.)
Disabled worker population grows dramatically: The growth in the number of disabledworkers (i.e., the number of disabled workers receiving SSDI claim payments) continuesto dramatically outpace growth in the overall covered worker population. According tothe Social Security Administration, the covered SSDI worker population grew by 12%from 1999 to 2009, while the number of disabled workers receiving SSDI claimpayments grew by 60% during the same period, from 4.9 to 7.9 million.• 7.8 million workers — over 5% of the workforce — were receiving SSDI at the conclusionof 2009.• SSDI benefits applications surged in 2009: Significantly more workers are applying forSSDI claim payments than at any time in history. Applications for SSDI benefits rose to2.8 million in 2009, the most ever, and 21.4% higher than the previous record in 2008.Over the past 10 years, the number of applications for SSDI benefits rose dramaticallyby 135% while the percentage of applications approved (the approval rate) droppedfrom 52% in 1999 to 35% in 2009. The surge in new claim applications is expected tocontinue in 2010.• SSDI claim approval rate continues to decline: The SSDI percentage approval rate forapplications has been trending downward since the late 90s. (The approval rate is thepercentage of workers who apply for SSDI benefits whose initial claims are approved.)
35% of workers applying for SSDI disability claim payments in 2009 were approved; 10years ago, the approval rate for workers applying for disability was 52%. Approval rates in the past 5 years (ranging between 35% and 39% during 2005–2009) represent thelowest five out of the past 15 years. The highest approval rate in the past 15 years wasthe 52% in 1998. The 15-year median approval rate is 44.6%.
SSDI disability rate increases: The overall rate of disability is increasing amongboth men and women workers; in 1999, 3.6% of covered workers were receivingSSDI payments, while in 2009, 5.1% were receiving SSDI payments. Factors behind this dramatic rise include the aging of the U.S. workforce and the recent pooreconomic conditions.
• Disability rate increases more rapidly for women than men: The overall rate ofdisability among women workers is growing much more rapidly than among men.The percentage of female workers receiving SSDI payments in 2009 (5.1%) was 55%higher than 10 years earlier (3.3% in 1998), while the number of male workers receivingSSDI grew by 37% during the same period, from 3.8% to 5.2%.
• 78%: this is the increase in the number of disabled female workers receiving SSDIpayments over the past decade, compared to a 46% increase among disabledmale workers.
• The 7.8 million disabled workers who received disability payments from SSDI in 2009represent a 4.9% increase over 2008 and 60% higher than the 4.9 million disabledworkers receiving payments in 1999.• $110 billion was paid by SSDI to all disabled workers in 2009; this is more than twicethe $46 billion in disability payments paid in 1999.
• Monthly SSDI benefit amounts in 2008 broke down as follows:-
-11% of SSDI recipients received less than $500 monthly
– 56% of SSDI recipients received less than $1,000 monthly
– 84% of SSDI recipients received less than $1,500 monthly
-97% of SSDI recipients received less than $2,000 monthly
• More younger people have been applying for SSDI benefits than in the past.
• About one third of SSDI claims are for conditions related to mental disorders.
2008 Social Security “Quick Facts”
• 52: this is the average age of a disabled worker receiving SSDI benefits.
• 2.8 million: this is the number of disabled workers in their 20s, 30s and 40sreceiving SSDI benefits.
• 1.9 million: this is the number of disabled workers’ spouses and childrenwho also received SSDI payments in 2008.
• $1,064: this is the average monthly SSDI benefit for all disabled workers.•More than 90%: this is the amount of disabled workers receiving SSDI whodo not qualify for workers’ compensation.
• 3 in 10: these are the chances of a young worker today becoming seriouslydisabled before reaching retirement.
Survey participants included:
Assurant Employee Benefits
LifeLincoln Financial Group
MassMutual Financial Group
Mutual of Omaha
Sun Life Financia
lUnion Central Life
CDA companies represent over 75% of the commercial disability insurance marketplace and providelong-term disability insurance coverage to 30.8 million workers, 28.9 million who are coveredthrough over 200,000 employer-sponsored benefit plans and 1.9 million who are insured throughindividually purchased disability policies.