Insurance coverage can help dentists survive disability, pandemic

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Most dentists experience long-term disability from musculoskeletal disorders, with as many as 81% suffering from back, neck, shoulder, or arm pain, according to disability attorneys at Comitz | Beethe in Scottsdale, Arizona. Citing income plan data from the American Dental Association (ADA), the firm’s website states that musculoskeletal disorders of the spine, shoulder, and wrist comprise 37% of dentist-related disability claims. “In 2009, nearly one-half of open claims, paid to disabled dentists under the ADA Income Plan, were for back and cervical disorders, arthritis, and wrist issues,” according to the firm’s website.¹

Jeff Brunken, president of MGIS, an insurance program manager for health care professionals in Salt Lake City, Utah, confirms this data. “Dentists become disabled more often than the rest of the population because their work involves using their hands, standing, and bending. As a person who works in an office all day, if I hurt my back or hand, I can still do my job. [If I were] a dentist, I probably [couldn’t],” Brunken says. He calls disability insurance a hedge against income loss from injury or illness.

“A health care professional’s income is tied to their ability to perform their medical, or in this case dental, specialty,” he says. “The procedures they’ve built into their practice have unique income protection needs. A good disability policy will pay benefits if a dentist can’t perform the duties that earn them money.”

While life insurance may get a lot of attention, the risk of becoming disabled exceeds that of dying on the job, adds Rick Gundling, FHFMA, CMA, a senior vice president at Healthcare Financial Management Association in Westchester, Illinois. Dentists should assess their complete financial picture to determine the type of insurance that’s right for them and their solo or group practice, he advises.

“Do I have enough of an emergency fund? What does my retirement fund look like? Could I work if I got disabled? What happens if I have a large mortgage and small children? Short-term disability kicks in after 3 months,” Gundling says. “If you’re out of work for 2 months, that might be fine. Have I saved up 3 months of living expenses? If I haven’t, I might want to take out individual disability insurance (IDI) to supplement that.”

Putting Teeth Into Dental Disability

Policies should cover 60% to 70% of practice earnings, according to Brunken. “I see a lot of dentists with $5000 to $7000 of IDI coverage, which is really good. The problem is that it only replaces 35% to 40% of the average dentist's income. If that income gap persists, it’s hard to maintain a pre-disability lifestyle,” he says.

Employer-based group policies may provide benefits of up to 50% of living expenses, he adds. “[But] the policy ends with the employment or practice,” he says. Brunken suggests purchasing supplemental policies to cover 20% to 30% of the remaining lost income.

Dentists should look for true own- or transitive-own occupation policies that pay benefits upon total occupational disability. If a policyholder becomes employed in another profession, these policies provide monthly earnings as long as they don’t match or exceed earnings from the previous occupation.

Other options include:

• Mental/nervous and substance abuse (MNSA) riders pay benefits per occurrence, not per lifetime. Per-occurrence policies cover substance-abuse relapses, usually at 6 months between events. But 24-month lifetime policies don’t cover relapse as a disability.
• Policies that cover all income sources, including bonuses and earnings, and index to the rate of inflation. The ADA describes automatic cost-of-living adjustments as “particularly beneficial for long-term disabilities that extend for several years or even decades.”
• Provisions that offset policy benefits.²
• Business overhead expense (BOE) insurance that covers operating costs of practices. The ADA offers overhead insurance that pays up to $25,000 a month against operational practice costs. This can include staff payroll, monthly rent or mortgage, utility, and phone bills, replacement dentists as needed, life and medical insurance premiums for staff, practice and student loan payments, property and liability insurance premiums, and professional association dues.³

“In a smaller practice setting, if a key partner can no longer pay their share of business expenses, the practice can get into trouble quickly. That’s why BOE insurance is critical. It works [as] a disability policy. If one becomes disabled, they can start receiving BOE benefits to pay their business expenses,” Brunken explains.

Group Disability Insurance

“In the age of COVID-19, dentists and other practice owners are under a lot of pressure to keep their practices going. Dentists need to get coverage to protect [themselves] if they develop disability related to mental or nervous issues,” Brunken says.

Gundling speculates COVID-19 spurred interest in IDI. “What would happen to me if I got the virus? People think of their own fragility. You and I might think more about germs on that shopping cart handle. If you’ve visited a friend in the hospital or had a parent in a nursing home, it makes you more cognizant,” he says.

“Dentists need to find coverage to protect the practice staff while giving them protection to safeguard their income,” Brunken says. “There are business and altruistic reasons for dentists to offer a group long-term disability program for staff. Dental practice employees need protection. The odds of becoming disabled are high, and the economic effects can be devastating. IDI carriers are unlikely to write [an individual] policy for a staff member. If not through a group policy, where would they get protection?”

According to Brunken, “The business reason for offering group disability benefits is the same as [offering] other benefits. You need to recruit and retain the best people. If you’re not offering this benefit, you’re not as attractive.”

Disability insurance can be bundled into a benefits package for employed dentists, Gundling says, adding that younger employees might expect enhanced benefits, such as maternity leave, more now than they did 40 years ago.

References

1. Musculoskeletal conditions in dentistry: the most common disability, the most difficult disability claim. Comitz | Beethe. Accessed November 1, 2020. https://www.disabilitycounsel.net/firm/dentist-resources/musculoskeletal-conditions-in-dentistry/

2. Disability income protection insurance plan. American Dental Association. Accessed November 1, 2020. https://insurance.ada.org/ada-insurance-plans/disability-insurance.aspx

3. Office overhead expense plan. American Dental Association. Accessed November 1, 2020. https://www.insurance.ada.org/ada-insurance-plans/office-overhead.aspx