CancerGuide: Cancer and Disability by Bruce Wallace

The author, Bruce Wallace, was executive director of an association of cities in Indiana for 25 years before he was diagnosed with Stage IV Renal Cell Carcinoma in March of 1999 and given six months to live. With his background in federal and state legislation and regulation, and with four young grandchildren to get to know, he began a quest to learn all he could about his disease and the future it dictated for him. His quest led him to the M.D. Anderson Cancer Center in Houston, Texas, where, following five rounds of major surgery, a year of experimental vaccine, two years of almost daily Interleukin and Interferon shots, a trial of thalidomide, and several rounds of the newer drugs Nexavar and Sutent, he continues to hold his cancer at bay. Much of the information that follows has been learned in the process of dealing with his own needs. "If I can share a bit of information that is helpful to others, it represents a small 'thank you' for all of the help that I have received from Steve Dunn and the members of the KIDNEY-ONC E-Mail List."

Note: This Article Applies To US Cancer Patients Only

If you have been diagnosed with Cancer, particularly advanced cancer or cancer that requires debilitating treatment, you need to become aware of disability income resources, and a tax saving technique that may be available to you. Disability insurance replaces lost income when you are unable to work due to a disabling condition such as cancer. It is not health insurance and doesn't directly pay for costs of treatment.

Social Security Disability Insurance is available to those who have worked and paid social security taxes. Social Security pays only for total disability. You are disabled if you cannot do work that you did before, and your disability is expected to last for at least one year or to result in death. (In my case, a diagnosis of Stage IV RCC was considered prima face evidence of total disability by Social Security). Payments begin for the sixth month of your total disability, and are equal to the amount that would be payable if you were age 65 at the time of your disability. Visit the Social Security Disability Website for additional information.

Supplemental Security Income (SSI) is a Federal income supplement program designed to help disabled people who have little or no income. SSI provides cash to meet basic needs for food, clothing and shelter. Eligibility for SSI may allow you to access additional federal and state benefits including Medicaid, food stamps and social services. Visit the Supplemental Security Income Website for additional information and tools to help you find out if you qualify.

Short Term Disability Insurance is usually provided by or through your employer. As the name implies, short term disability insurance provides a daily or weekly benefit after you have been unable to work for a specified number of days or weeks, and often provides benefits for a maximum period of 13 to 26 weeks. As soon after diagnosis as possible, you should review the specific terms and requirements of your policy. The Human Resources or Employee Benefits office at your place of employment is a good resource.

Long Term Disability Insurance* too is often provided by or through your employer. Long term disability insurance provides a daily or weekly benefit, often a percentage of your pre-disability salary, after you have been disabled and unable to work for a specified number of weeks or months (the elimination period), and often provides benefits for extended periods of time, often to age 65. The benefits you receive from disability insurance are usually "coordinated" with (reduced by) Social Security and other employer/government benefits you receive.

*Tax Saving Technique. Who pays disability insurance premiums can have major tax consequences! If the premiums are paid by your employer, the benefits will be treated as regular income to you, and taxed as such. If the premiums are paid by you, then the benefits are not treated as income, and are not taxed. So what can you do if the premiums are being paid by your employer? You should act quickly. Several IRS Private Letter Rulings seem to confirm that if all of the premiums paid during the calendar year that benefits (payments) begin were paid by the insured, the benefits are not treated as income and are not taxable. Since most long term disability insurance has significant waiting periods, there is a good chance that you have time to comply. How? Begin paying the premiums yourself. You can do this in one of several ways. Each month, you can give a check to your employer made payable to the insurance company for the premium applicable to you. Or, you can have your employer deduct the premium from your pay on an after tax basis. Either approach will provide documentation that the premiums were paid by you.

I am not an attorney or accountant, but will try to answer questions based on my own experience. You can e-mail me at dbw.email@gmail.com.

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