Page 135 - Group Insurance and Retirement Benefit IC 83 E- Book

Instead of discontinuing benefits as soon as the employee returns to work, the insurer

pays the smaller benefit for a short period during which the employee determines whether
he or she will be able to be gainfully employed.

During the trial period, the employee receives both the reduced DI benefit and current

income. The amount of the rehabilitation benefit is generally determined by reducing the
total disability monthly benefit by a certain percentage of current earnings-usually from

50% to 80%. Let‘s say employee Trevor Brandt has been receiving a $2,000 per month

disability benefit. He returns to work part time for a trial period during which he earns
$1,400 per month. This particu1ar insurer pays a rehabilitation benefit that is the

disability benefit reduced by 70% of current income.

Current earnings of $1,400 x .70 = $ 980

Monthly total DI benefit = $2,000
Minus earnings reduction = -980

Rehabilitation benefit = $1,020
Plus current earnings = $1,400

Income during trial period = $2,420

Thus, the rehabilitation benefit allows the disabled employee to return to work gradually,

possibly improving the changes the individual will be able to return to full time gainful

employment. The reduced DI benefit supplements the income so the individual is not
discouraged from returning to work at a lower income than before the disability occurred

since current income and the rehabilitation benefit combined provide more income that

the total DI benefits alone.