New Ruling on Interstitial Cystitis (SSR 15-1p)

The Social Security Administration has issued Social Security Ruling (SSR) 15- 1p, which became effective immediately upon publication. 80 Fed. Reg. 14215 (Mar. 18, 2015). This ruling replaces  SSR 02-2p, which became effective in 2002. 

The new ruling describes interstitial cystitis (IC) as “a complex genitourinary disorder involving recurring pain or discomfort in the bladder and pelvic region.” Some medical providers and organizations, including the American Urological Association, consider the disease synonymous with “painful bladder syndrome” and “bladder pain syndrome.” The SSR states that although it uses the term IC, it is designed to address other medical conditions. IC more prevalent in women.  It can happen at the same time as other diseases including fibromyalgia, chronic fatigue syndrome, irritable bowel syndrome, inflammatory bowel disease, vulvodynia, chronic headaches, Sjögren’s syndrome, endometriosis, or systemic lupus erythematosus. The most common way of diagnosing this condition is by a process of elimination of  other disorders with similar symptoms. Tests used to determine a diagnosis are part of a complex ruling-out process. Tests include urinalysis, urine culture, cystoscopy, biopsy of the bladder wall and urethra, distention of the bladder under anesthesia, and culture of prostate secretions. Doctors are able to treat the symptoms of IC in some patients only.

Much of the SSR applies existing SSA policy to IC. For example, it states that when adjudication occurs less than 12 months before a claimant’s alleged onset date, SSA will use “information about the person’s treatment and response to treatment, including any medical source opinions about the person’s prognosis at the end of 12 months, helps us decide whether to expect an MDI of IC to be of disabling severity for at least 12 consecutive months.” Also, once an individual is found to have an MDI of IC, the adjudicator must proceed through the sequential evaluation process, determining whether the MDI is “severe,” whether the claimant meets or equals a listing (there is no listing for IC itself), and if not, what the claimant’s residual functional capacity is and whether is allows a return to past or other work.

Sheltered or Subsidized Work

In order to win a Social Security Disability case, a claimant must show that he or she is not engaging in a substantial gainful activity (SGA).  The SGA threshold for 2015 is $1,090.  If a claimant makes more than this amount, he or she will be found to be engaging in a "substantial gainful activity" and will be determined to be ineligible for Social Security Disability.

However, one of the exceptions to this general precept is known as the "Sheltered"or "Subsidized" work rule.  Sheltered or subsidized work is work performed by individuals who work under a special program with special rules.  For example, if a person who is disabled, works for a family member and is given great leeway in determining work schedules and tasks, he or she may be found to be working in a sheltered environment.  This situation often happens when the family is fully aware of the employee's medical condition and decides to provide the family member with extra compensation for their work and/or additional flexibility in performing the demands of the job. Under these circumstances, Social Security does not have to adhere strictly to the specific monetary threshold for SGA and may find that the claimant is eligible for benefits despite the actual amount of dollars earned.  

Another common situation involving sheltered work occurs when the military pays wages to a solider who is disabled and unable to work.  This is prevalent among claimants who are assigned to a "Warrior Transition Unit" while they wait for military discharge.  The discharge process might take many many months and, in many instances, the disabled soldier is not required to work at all.  Under this scenario, the SSA will not count the pay received by the soldier as SGA. 

Convincing Social Security that a claimant is working in a sheltered environment can be a difficult task.  Whenever I have a client who I believe has been working in a sheltered work environment, I obtain letters from co-workers and supervisors stating the specific circumstances under which the claimant performed his or her duties.   It is also advisable to gather evidence such as time sheets, work schedules and pay stubs in order to succeed in a case involving sheltered work.  Never assume that the claimant's statements or testimony are sufficient evidence to win this type of claim.  In this day in age when Social Security is under constant scrutiny, ALJ's and SSA adjudicators feel a lot more comfortable in granting a case where extensive documentation has been submitted by the claimant and his or her attorney.

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Are Long Term Disability Insurance Benefits Taxable?

Its tax season once again!  One of my least favorite times of the year.  During this time, I am often asked whether LTD benefits are taxable.  The answer to this questions depends greatly on who paid for the disability insurance premiums, you or your employer.  The answer also depends on whether the premiums were paid with pre-tax or after tax income.
If your employer paid for 100% of your disability insurance premiums and did not include the amount paid as your gross income, then your long term disability payments are taxable.  Moreover, if your employer paid you directly while you were disabled, these payments are also taxable.
If your employer paid a percentage of your premium and you were responsible for paying the remaining percentage, then you won't have to pay taxes for the amount of benefits that equals the percentage that you paid.  Here is an example on how you will be taxed under this scenario:
Pete pays $40 dollars a month for his LTD policy and his employer pays another $40 per month for this insurance.  Pete becomes disabled and starts receiving $4,000 a month in LTD benefits.  Since he paid 50% of the premiums he is responsible for paying taxes for half of his monthly payments ($2,000).  The other $2,000 is tax free.
As a general rule, expect short term disability payments paid by a self-funded plan to be taxable.  On the other hand, you can also expect benefits froma non-ERISA policy purchased individually to be tax free.  However, please note that different rules might apply to each particular scenario.  This post is intended for general information purposes and should not be construed as tax advise.  As I have said many times in previous posts, I am a disability benefits attorney, not a tax lawyer.  Moreover, I am not an accountant, CPA or tax preparer.  Please consult a tax professional before filing taxes or making any decisions with respect to your particular case.