Who Pays Health Insurance While on Long-Term Disability ─ 2024 Guide

Navigating the complexities of health insurance coverage during periods of long-term disability can be a daunting task for individuals and their families. The intersection of healthcare policy, insurance regulations, and disability benefits forms a labyrinth that requires careful navigation to ensure continuous and comprehensive medical coverage.

This guide aims to shed light on the critical question: Who pays for health insurance while on long-term disability in 2024? By exploring various scenarios, legal frameworks, and options available to those affected, we aim to provide clarity and guidance to those finding themselves in this challenging situation. Read more about various disabilities here.

Long-Term Disability

Long-term disability (LTD) insurance is a safeguard that provides income replacement to employees who are unable to work for an extended period due to illness, injury, or accident. Typically, LTD benefits kick in after short-term disability benefits expire and can last from a few years to until retirement age, depending on the policy.

However, while LTD insurance replaces a portion of the income, it often does not directly cover health insurance premiums, leaving individuals to navigate their health insurance coverage independently.

Health Insurance Options During LTD


When an individual is on long-term disability, there are several avenues to maintain health insurance coverage, each with its own set of criteria, costs, and coverage specifics. The primary sources include employer-sponsored health plans, COBRA continuation coverage, government programs such as Medicaid and Medicare, and the Affordable Care Act (ACA) marketplace plans.

Employer-Sponsored Health Plans

Many employers offer health insurance as part of their benefits package. When an employee becomes disabled and qualifies for LTD, the ability to continue under the employer-sponsored health plan varies.

Some employers may continue to provide health insurance coverage for a specified period or until the employee is eligible for Medicare. This arrangement depends on the employer’s policy and the terms of the health insurance plan.

COBRA Continuation Coverage

The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives employees and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods under certain circumstances.

For individuals on LTD, COBRA can be a vital bridge, offering the same health insurance coverage they had while employed. However, it’s important to note that individuals opting for COBRA may have to pay the full premium amount, which can be significantly higher than the cost-sharing arrangement with their employer.

Government Programs ─ Medicaid and Medicare

Medicaid is a state and federal program that offers health coverage to individuals with low income, including those who are disabled. Eligibility and benefits vary by state but can provide comprehensive health coverage to those who qualify.

Medicare is a federal health insurance program for people aged 65 and older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD).

Individuals who have been receiving Social Security Disability Insurance (SSDI) benefits for 24 months are automatically enrolled in Medicare. While Medicare provides a broad range of health coverage, it may not cover all medical expenses, and individuals may choose to purchase supplemental policies.

Affordable Care Act Marketplace Plans

The ACA marketplace offers health insurance plans to individuals, families, and small businesses. For those on LTD, the marketplace presents an alternative or supplementary option to employer-sponsored plans or government programs. Premiums are based on income, and subsidies are available to those who qualify, making it a potentially affordable option for continuous health coverage.

Navigating Health Insurance with LTD Benefits

Determining the best approach to maintaining health insurance during long-term disability requires a thorough assessment of one’s financial situation, health needs, and the benefits available through various channels. It’s crucial to compare costs, coverage, and eligibility criteria across these options to make an informed decision.

Consulting with a financial advisor or health insurance counselor can provide personalized guidance tailored to an individual’s specific circumstances.

Legal Considerations and Protections

Several laws and regulations protect the rights of individuals on long-term disability regarding health insurance. The Americans with Disabilities Act (ADA), the Health Insurance Portability and Accountability Act (HIPAA), and the Affordable Care Act (ACA) all include provisions that impact health insurance coverage for disabled individuals.

Understanding these protections can empower individuals to advocate for their rights and ensure they receive the coverage they need.



Can I switch from COBRA to an ACA marketplace plan if I find COBRA too expensive?

Yes, individuals on COBRA have the option to switch to an ACA marketplace plan during the marketplace’s open enrollment period or if they qualify for a special enrollment period due to certain life events. If COBRA is proving to be financially burdensome, exploring ACA marketplace plans could provide more affordable coverage options, potentially with subsidies to lower the cost further.

How does receiving long-term disability benefits impact eligibility for Medicaid?

Receiving long-term disability benefits may impact your eligibility for Medicaid, as Medicaid is a needs-based program that considers your income and assets. The specific impact depends on the amount of LTD benefits you receive and your state’s Medicaid income limits.

It’s advisable to consult with a Medicaid planner or an attorney to understand how your LTD benefits could affect your Medicaid eligibility.

Are there any health insurance options specifically designed for individuals with disabilities?

Yes, in addition to general health insurance options available through employers, COBRA, ACA marketplace plans, Medicaid, and Medicare, there are also programs specifically tailored for individuals with disabilities.

For example, Medicare has specific enrollment criteria for individuals under 65 with certain disabilities, and some states offer Medicaid Buy-In programs for working people with disabilities, allowing them to receive Medicaid coverage while still receiving an income.

What happens to my health insurance if my long-term disability insurance is provided by a private insurer outside of my employment?

If your LTD insurance is provided by a private insurer and not through your employer, the continuation of your health insurance coverage will not be directly tied to your employment status.

In this case, you would not be eligible for COBRA through your employer, and you would need to explore alternative health insurance options such as individual plans through the ACA marketplace, Medicaid, or Medicare, depending on your eligibility.



For individuals facing long-term disability, securing continuous health insurance coverage is a critical concern. The landscape of health insurance during LTD is complex, with multiple pathways to maintain coverage.

By carefully evaluating their options—whether it’s through employer-sponsored plans, COBRA, Medicaid, Medicare, or ACA marketplace plans—individuals can find a solution that best fits their needs.

It’s essential to stay informed about the evolving legal and regulatory environment surrounding health insurance and disability benefits. As the healthcare landscape continues to change, staying proactive, seeking professional advice, and leveraging available resources can help individuals navigate these challenges successfully.

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