Receiving a diagnosis of amyotrophic lateral sclerosis (ALS) or another neuromuscular disease is always difficult. People who are working at the time of diagnosis need to be concerned with their employers' retirement, medical, life and disability insurance plans. You need a road map of the issues that may arise when your condition forces you to leave your job.

Most employers are sympathetic and helpful. Most employers are knowledgeable about their employee benefit plans and the laws governing them. Most are diligent in the administration of their benefit plans. However, this is too important to take chances on. With a little study and by following the right steps, you can ensure that you and your family get all of the benefits to which you're entitled.

Lack of planning or familiarity with the benefit plans could cause you to lose some or all of your benefits. For example, you could lose your benefits if:

• you fail to follow the benefit plan terms
  
  
• you fail to pay required premiums when due
  
  
• you leave employment too soon or for the wrong reasons
  
  
• you fail to provide the necessary information to your employer
  
  
• your employer fails to provide the necessary information or notices to an insurance company
  
  
• you or your employer fails to provide notices or information on a timely basis

Employee benefit plans are heavily regulated by the federal government and, to a lesser extent, state governments. The primary source of this regulation is the Employee Retirement Income Security Act of 1974 (ERISA).

READ, UNDERSTAND PLAN DOCUMENTS

You need to familiarize yourself with the terms of your benefit plan. For example, how does the plan define disability? You also need to learn the procedural and notice requirements of the plan. Failure to adhere to plan terms could reduce the amount of benefits you receive.

ERISA requires that the terms of a benefit plan or policy be in writing. The law also requires that an employer-sponsored plan provide a summary plan description (SPD) that explains the terms. If you don't have these documents, request them in writing. (ERISA provides for a penalty of up to $100 a day for failure to provide requested documents within 30 days.)

MEET WITH THE H.R. DEPARTMENT

You should meet with your employer or human resources representative after reviewing your benefit plan documents. During this meeting, go through the list of benefits and open issues. State that the purpose of the meeting is to discuss the possibility of your leaving the company on short-term and then long-term disability, and to review all benefit programs and how they apply to your circumstances.

At the end of the meeting, be sure to ask: "Am I entitled to any other benefits under any other company programs?" Repeat the question in your confirming letter. Your employer has an obligation to answer this question truthfully and completely.

You should take notes during the meeting. This information is critical to you and your family. Besides, it never hurts to show you're paying attention. After the meeting, prepare a letter to your employer, confirming your understanding of:

• the answers to any questions you raised
  
  
• how each benefit plan will apply to you
  
  
• who will take each action necessary to ensure you get all benefits to which you're entitled
  
  

LONG-TERM DISABILITY BENEFITS

Many employers maintain a long-term disability (LTD) plan for their workers. LTD plans generally provide wage-replacement benefits to employees who can no longer work due to a permanent and total disability. Employers usually offer LTD plans through an insurance policy, and pay all or part of the premiums.

Because the LTD plan is essentially an insurance policy, your interaction, after the early stages, will most likely be with the insurance company.

Most LTD plans contain some or all of the following provisions, which will determine the amount and timing of your benefits:

• A monthly benefit that's a specified percentage of your final salary, commonly 67 percent, although the law doesn't require any specific amount
  
  
• An "elimination period," the time between your last day worked and the date the LTD plan will begin making payments (180 days is standard)
  
  
• A reduction in benefits payable to you under the LTD plan for the amount paid to you from other sources, such as Social Security
  
  
• A "survivor income benefit," under which the insurance company pays benefits to your surviving spouse for a period of time following your death
  
  

The LTD plan will pay benefits following your "disability," "total disability," "permanent and total disability" or some other defined condition. For example, the plan may define disability as "the employee is continuously unable to perform the substantial and material duties of his regular occupation." Consult with your doctor as to whether you satisfy the plan's definition of disability (and make certain your doctor is ready to certify his conclusion). Also review any other requirements applicable to the definition. You may have to be examined by an insurance company doctor.

Most LTD plans require the employer to provide or file the initial "notice of claim" with the insurance company. Speak with your employer about this.

SHORT-TERM DISABILITY

Many employers maintain a short-term disability (STD) plan. STD plans generally provide wage-replacement benefits to employees who are temporarily unable to work due to a disability. Unlike LTD plans, most employers "self-insure" their STD plans. This means your employer will pay this benefit out of its general assets.

Most STD plans contain some or all of the following provisions, which will determine the amount and timing of benefits:

• STD plans generally pay a percentage of base salary, often as high as 100 percent, for a specified number of weeks. Sometimes, the percentage is based on your length of service.
  
  
• The plan may require that you report absences in advance or provide medical certification.
  
  
• Benefits generally begin from the first day of your absence.

LIFE INSURANCE PLANS, POLICIES

Many employers maintain group term life insurance policies. Group life plans generally provide a death benefit to employees who die while insured under the policy. Employers generally pay all or part of the cost of group life premiums.

You must determine whether your contemplated disability will terminate your life insurance. After the early stages, your interaction on the group life plan will most likely be directly with the insurance company.

Aside from the amount of the death benefit payable under the life insurance plan, you should look closely at the following provisions:

Waiver of Premium -- Many life insurance policies provide for continued coverage of an employee who becomes disabled while actively working, with no further premium charges to you or your employer.

Termination of Coverage -- All life insurance policies provide for termination under certain circumstances, including failure to pay premiums on time or termination of employment. Make sure you remain eligible for coverage until you're ready to leave. Most policies require that you're actively working to be covered.

Conversion Privileges -- Most states require life insurance policies to permit an employee who is losing coverage to "convert" his group policy coverage to an individual policy with no proof of good health. If available, and if you can afford it, you may want to purchase this conversion policy.

Each of these provisions requires notice to the insurance company within a specified time period. You must ensure that your employer or you meet all deadlines.

Many group life plans permit you to elect Supplemental Life Insurance, an additional amount above the basic employer-paid amount. Generally, you must pay the full premium for this supplemental life insurance. If you're eligible to elect this added coverage, you probably should.

A 1996 change in the Internal Revenue Code allows life insurance plans and policies to provide for accelerated death benefits to a person who is chronically or terminally ill. This benefit could be a source of funds to individuals or families without other resources. The accelerated death benefit wouldn't be subject to federal income tax.

ACCIDENTAL DEATH, DISMEMBERMENT POLICY

Many employers maintain an accidental death and dismemberment (AD&D) plan for their employees through an insurance policy. AD&D plans generally provide benefits for bodily injury caused by accidents. These plans wouldn't ordinarily pay benefits to people with disabling diseases.

DEPENDENT OR SPOUSAL LIFE INSURANCE

Some plans provide, or permit the employee to elect, life insurance for spouses or other dependents. Dependent life policies almost always contain a conversion privilege. Because you may become more reliant on your spouse, you should request information on, and seriously consider whether to exercise, any available conversion privilege. You should compare the cost of the conversion policy against the cost and availability of a new life insurance policy.

PENSION, RETIREMENT, 401(k) PLANS

Your employer may provide retirement benefits through a defined-benefit plan, a defined-contribution plan or both.

Defined-benefit pension plans promise to pay a fixed, monthly benefit beginning at retirement and continuing for the duration of your life. Such a plan may provide for other payout forms, such as a lump sum, and generally provide benefits to a participant's surviving spouse.

Defined-contribution, or individual account, plans promise to pay exactly the amount of the account. They generally pay in a single lump sum, although many provide other options. Any amount remaining in the account at the participant's death may be payable to a surviving spouse. Profit sharing, employee stock ownership plans and 401(k) plans are forms of individual account plans.

Many plans consider you fully vested in all employer contributions if you become disabled while a participant. Some plans provide for continued benefits to or contributions on behalf of disabled employees. You need to determine the following:

• whether your retirement plan provides for continued benefits to or contributions on behalf of disabled employees
  
  
• whether your disability leave will cause full vesting under the plan
  
  
• which payout options best suit your circumstances

Careful evaluation of your retirement plan is especially critical if you have a defined-benefit plan, because ERISA doesn't require such a plan to pay benefits before your normal retirement age, or to pay survivor benefits to anyone other than your spouse.

HEALTH/MEDICAL BENEFITS

Most employers provide health and medical benefits to their employees, with the cost shared between the two. The high cost of medical care may make this one of your most important benefits.

Continuation of Coverage -- Many plans provide for continuation of coverage during disability. However, often the continuation is limited to a specified period, such as one year following the end of active employment. You may have to continue paying the premium you were paying as an active employee.

Benefit Claims -- Both before and after you leave employment due to disability, the medical plan may deny coverage for certain drugs, services or treatments. You must familiarize yourself with the plan's terms, specifically as they relate to services you expect to need. You also need to study any precertification or second-opinion provisions.

If the medical plan denies coverage for any drugs, services and treatments you believe are covered, don't hesitate to immediately appeal the denial. The plan must specify procedures for filing a claim and appealing a denied claim. If the plan wrongly denies your benefit claims (or fails to provide requested documents), you have the right to sue in federal court.

Pre-existing Condition Exclusions -- Federal law greatly restricts imposition of pre-existing condition exclusions. This is particularly true for people who transfer from one medical plan to another.

COBRA -- Virtually all employer group health plans must make continued coverage (COBRA coverage) available to employees who lose coverage due to employment termination for any reason. The plan must give you written notice of your right to elect COBRA coverage. Although you have a near-absolute right to this coverage, you must pay the full cost.

If you give your employer proof of disability, the COBRA coverage period may continue for up to 29 months. In the event of your death during the COBRA period, your spouse and dependents may have a right to COBRA coverage for an additional 18 months.

CLAIMS PROCEDURES

ERISA requires that plans contain procedures for filing claims for benefits, and for appealing claims that are denied. If your employer or an insurance company denies your claim for benefits, be sure to follow the procedures for appealing the denial.

As stated earlier, the plan must specify the procedures for filing a claim and appealing a denied claim. You have the right to sue if you feel benefits are being wrongly denied.

The bottom line is: Understand your benefits and know your rights.

If you don't, valuable financial assistance could be lost to you and your family at a crucial time. If you can't handle the task yourself, seek professional assistance.