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In This Issue:
Alan Franciscus, Editor-in-Chief
HealthWise: What the Heck is Hepatotoxicity?
Lucinda Porter, RN
HIV/HCV Coinfection News from EASL
Disability & Benefits:
An Overview of Disability Insurance Coverage
Jacques Chambers, CLU
HCV Advocate Eblast
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Alan Franciscus, Editor-in-Chief
The European equivalent of the American Association for the Study of Liver Diseases (AASLD) conference is the European Association for the Study of the Liver (EASL). This year’s EASL conference included a wealth of information about studies that have been conducted on drugs in development to treat hepatitis C. This article will focus on coverage of the drugs furthest along in the development cycle—telaprevir and boceprevir as well some exciting news on the development of HCV therapeutic vaccines that are in early clinical development.
In previous Phase II studies of Vertex’s telaprevir, an HCV protease inhibitor, it has been reported that SVR rates have been as high as 69% in people with HCV genotype 1 who have never been treated (treatment naïve). Retreatment with pegylated interferon plus ribavirin in people who did not achieve a sustained virological response (SVR-undetectable HCV RNA (viral load) 24 weeks post treatment) with a previous course of pegylated interferon plus ribavirin is very important because they constitute a large group of people with HCV who are in the most need for newer HCV medicines that will improve the chances for successful response to treatment. At EASL results of a phase II study of patients who did not achieve an SVR and who were treated with the combination of telaprevir /Pegasys/ ribavirin were reported and the results are very encouraging.
There were three groups in the study:
Group A: telaprevir, Pegasys, ribavirin for 12 weeks followed by Pegasys plus ribavirin for an additional 12 weeks (total treatment duration = 24 weeks).
Group B: telaprevir, Pegasys, ribavirin for 24 weeks followed by Pegasys plus ribavirin for an additional 24 weeks (total treatment duration = 48 weeks).
Group C: Pegasys plus ribavirin for a total treatment duration of 48 weeks (standard of care).
A total of 453 patients were enrolled and received at least one dose of the study drug. (See Table 1 for SVR results)
Definitions of Prior Non-Response
Non-responders: people who never achieved an undetectable HCV RNA (viral load) during or at the end of HCV treatment.
Relapsers: people who became HCV viral load undetectable during to the end of the HCV treatment period, but who later became HCV RNA (viral load) positive during the follow-up period.
Breakthroughs: people who achieved an undetectable HCV viral load during treatment, but who later had detectable HCV viral load before the end of the treatment period.
Table 1: SVR results by type of prior response:
Group A (TVR12/PR24)
Group B (TVR24/PR48)
Group C (PR48)
39% out of 66 patients
38% out of 64 patients
9% out of 68 patients
69% out of 42 patients
76% out of 41 patients
20% out of 41 patients
57% out of 7 patients
50% out of 8 patients
40% out of 5 patients
51% out of 115 patients
52% out of 113 patients
14% out of 114 patients
Vertex reported that the side effects were consistent with prior studies of telaprevir/Pegasys/ribavirin. Seventeen out of 339 patients (5%) discontinued therapy due to skin rash and three out of 339 patients (1%) due to anemia. Growth factors were allowed in the study but only two out of 339 patients in the telaprevir groups were given growth factors to treat anemia.
Even though the total number of patients in the study was small, the overall SVR rates are impressive. Another study, the REALIZE study, has been launched by Tibotec (Vertex’s European partner) that will enroll about 650 treatment-experienced patients, and the results should give us a better picture of the effectiveness of a regime that includes the combination of telaprevir, pegylated interferon and ribavirin, as well as hopefully confirm the prior results.
The final results of the SPRINT-1 study of boceprevir, an HCV protease inhibitor used in combination with PegIntron plus ribavirin, were also released at EASL. The patients in the study were HCV genotype 1 patients who had never been treated (treatment naïve) for hepatitis C.
The study had two parts:
Part 1: To evaluate boceprevir (800 mg – three times a day), PegIntron and ribavirin in standard doses with different treatment durations. Total of 5 different treatment groups – two of the arms also had a lead-in phase with PegIntron plus ribavirin (without boceprevir). In this part of the study the various treatment regimes were compared to PegIntron plus ribavirin (standard of care (control group)) for 48 weeks. (520 patients total)
Part 2: To evaluate boceprevir, PegIntron and ribavirin treatment: two different doses of ribavirin (800-1400 mg/day vs. 400-1000 mg/day); 48 weeks of treatment with the triple combination of boceprevir/PegIntron/ribavirin. No lead-in phase. (75 patients total)
Part 1 Results
An SVR rate of 75% (77 out of 103 patients) was highest in the arm that received the lead-in of PegIntron plus ribavirin for 4 weeks followed by 44 weeks of boceprevir /PegIntron/ ribavirin (total treatment duration = 48 weeks) vs. an SVR of 38% in the group that received the current standard of care therapy of PegIntron plus ribavirin. In the group that received the lead-in of PegIntron plus ribavirin for 4 weeks followed by 24 weeks of the triple combination of boceprevir/PegIntron/ribavirin (total treatment duration = 28 weeks) the SVR rates were only 56%, which confirmed that the optimal treatment duration for the triple combination (boceprevir, PegIntron, ribavirin) therapy is 48 weeks.
Treatment discontinuations due to side effects in Part 1 of the study were between 9 and 19% in the boceprevir arms compared to 8% in the arm without boceprevir. The most common side effects reported were fatigue, anemia, nausea and headache.
Anemia (hemoglobin decreasing to less than 10 g/dL) occurred in about 50% of people in the boceprevir arms compared to about 1/3 in the arm without boceprevir. Erythropoietin (EPO-growth factor) was allowed in the study—26% of patients used EPO in the arm without boceprevir compared to 39-51% who used EPO in the groups that received boceprevir.
Part 2 Results
In Part 2 (low dose ribavirin) it was found that the SVR rate was 36% vs. 50% in the standard dose group (both in combination with boceprevir and PegIntron). This information confirms that standard doses of ribavirin are needed to increase SVR rates even with the addition of boceprevir.
The results are impressive—75% SVR rates. However, the increase in anemia seen in the patients who received boceprevir is a cause for concern that could limit the usefulness of boceprevir. Another concern is that EPO was allowed and used in the clinical trials. The use of EPO raises many concerns including:
- EPO is not currently approved by the FDA to treat HCV treatment-related anemia. It is unlikely that the vast majority of patients who develop anemia from HCV treatment will be able to use EPO since there are strong warnings about the use of EPO that are now listed on the FDA approved EPO package insert.
- If EPO is used, will it be covered by most insurance companies? This seems highly unlikely in the light of the warnings about and the cost of EPO.
- How did the use of EPO affect the treatment outcome? Would more patients have dropped out of the study if EPO wasn’t used? If so, that could decrease the listed SVR rates.
- Does boceprevir now have an advantage over the other HCV drugs in development that have not been able to or rarely used EPO?
- Does boceprevir now have a disadvantage over the other HCV drugs in development because EPO was used in the clinical trials? Will physicians decide not to prescribe boceprevir due to anemia if patients do not have access to the use of EPO?
We may find out some of the answers when phase III studies are completed, but most likely the real answers will come when and if boceprevir is approved by the FDA to treat HCV.
Erythropoietin or EPO:
Erythropoietin or EPO is a hormone that is naturally produced by the kidneys, and to a lesser extent by the liver, that helps stimulate the bone marrow to produce red blood cells that will increase the oxygen-carrying capacity of the blood. Synthetic EPO (brand name Epogen, Procrit) is an injectible medicine that has been approved by the Food and Drug Administration (FDA) to treat anemia caused by kidney failure, the HIV medication AZT, and cancer. Most people have heard of EPO related to its illegal use as a performance-enhancing drug by some athletes. In 2007, the FDA issued a Public Health Advisory and required a black box warning on the product information labeling about the potential health risks of using EPO.
The discovery of protective or therapeutic vaccines has proven difficult, but reports from EASL on various therapeutic vaccines are encouraging. Therapeutic vaccines work to stimulate the immune system to fight an infection and may have a use in ‘boosting’ the effectiveness of current and future medications to treat hepatitis C.
TG4040: Results from a phase I study were released and it was found that 6 out of 15 patients given the therapeutic vaccine, TG4040, had a viral load reduction of 0.5 to 1.4 log10 IU/mL from baseline. The next step in the development process is a new clinical trial of TG4040 in combination with pegylated interferon plus ribavirin. The new trial is expected to begin in 2010.
GI-5005: Treatment with GI-5005, a therapeutic HCV vaccine (plus pegylated interferon/ribavirin) was compared to pegylated interferon/ribavirin (without GI-5005). The combination that included GI-5005 was found to produce 8% to 12% higher rates of HCV viral load reductions at twelve weeks in HCV genotype 1 treatment-naïve patients compared to those in the group who did not receive GI-5005.
ChronVac-C DNA vaccine: Data on the first DNA vaccine was released at EASL. In a proof of concept study, 12 HCV genotype 1 treatment-naïve patients were given various doses of the therapeutic vaccine. In 4 out of 6 patients who received the two highest doses there were viral load reductions exceeding 0.5 log10 that lasted for 2 weeks to greater than 10 weeks. The HCV viral load reductions correlated with specific immune response thereby satisfying the proof of concept.
In the trials of HCV vaccines listed above, the vaccines were safe and well-tolerated.
In addition to the above studies, there were many reports on drugs being developed to treat hepatitis C. These drugs are in very early development and a summary of the results can be found on the HCV Advocate Drug Pipeline web page.
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HealthWise: What the Heck is Hepatotoxicity?
Lucinda Porter, RN
Hepatotoxicity is a mouthful to say, but its definition is simple. Hepato refers to the liver. Toxic or toxicity means poisonous or capable of causing injury or death. Substances that can damage the liver are potentially hepatotoxic.
Many substances have the potential to harm the liver. Alcohol, mushrooms, chemicals, herbs, supplements, steroids, recreational drugs, prescription and over-the-counter medications are all potentially hepatotoxic.
The general rule is that people with liver disease, such as hepatitis C virus infection (HCV), should avoid potentially hepatotoxic substances. Although medications have the potential to help us, they also may harm us. Having HCV doesn’t rule out taking drugs that could potentially damage the liver. The key is to know how to use medications safely.
Acetaminophen (Tylenol®) is a classic example. Hospitals use acetaminophen routinely for fever reduction and pain relief. Its safety record is respected. However, there are ways this safe medication can become toxic. Take too much or drink alcohol within a certain window of taking acetaminophen and the liver is threatened. Those with HCV may avoid acetaminophen because of this toxicity. Yet in most cases, acetaminophen is safe when taken correctly. Unfortunately, some medical professionals advise against acetaminophen’s use, yet liver specialists will tell you that at recommended doses, acetaminophen is safe for most people.
What causes hepatotoxicity?
Some substances are directly toxic to the liver. Amanita mushrooms and acetaminophen overdose are famous for this. However, hepatotoxicity is usually more gradual and complicated. To understand it, we need to review basic physiology.
The body treats everything as a foreign substance—be it a drug, food, or microorganism. It has to decide what to do with that substance. Basically, everything is used, neutralized and eventually eliminated. In some cases substances are stored.
This is all done utilizing various chemical processes. It is a complex system, involving every organ. Food is turned into fuel or fat. If you eat something dangerous, such as a virus or bacteria, the immune system will go into action. Medication is turned into something therapeutic unless too much or the wrong drug is taken—then it may become toxic.
When it comes to understanding hepatotoxicity, metabolism is a key concept. Metabolism occurs mostly in the liver. Metabolism is kind of a transformation process. This process occurs when substances reach the liver. The substance may be rendered inactive so it can be safely eliminated through the kidneys. Or, the substance may be turned into something active that may help fight disease. Sometimes there is too much of an active substance and it harms the liver.
A bit more technical…
Drug metabolism depends on enzymes. This enzymatic transformation occurs primarily in the liver. These enzymes are not the same as the ones for which we get regular lab tests. Rather, they are a group of proteins referred to as Cytochrome P-450 enzymes (CYPs). Certain diseases, particularly a poorly functioning liver, can interfere with drug metabolism that relies on CYPs. This means that you could get too little or too much of any of the drugs that interact with each other.
Drugs and substances that are metabolized by the same enzymes may compete with one another for metabolism. Thus, some drugs could be toxic rather than therapeutic. For example, if you take two medications that rely on the same enzymes, one drug may be metabolized while the other becomes toxic. Substances may compete so that neither will work effectively.
Some substances and diseases may speed up or delay drug metabolism. The existence of a liver disease, such as HCV, may interfere with drug metabolism, particularly if there is cirrhosis. Alcohol, grapefruit, St John’s wort and tobacco smoking can interfere with drug metabolism.
What are some of the most potentially hepatotoxic substances?
Countless substances are potentially hepatotoxic, including over a thousand drugs that can interact with any cytochrome P-450 metabolized substances. Some drugs are so clearly hepatotoxic that the Food and Drug Administration (FDA) has required their removal from the market.
The following is a partial list of common substances that may challenge the liver—particularly if taken at high doses or in combination with alcohol or other medications. Some of these may be safe if taken as directed.
- acetaminophen (Tylenol®)
- amanita mushrooms
- anabolic steroids
- anti-fungals: fluconazole (Diflucan®) and ketonazole (Nizoral®)
- anti-seizure drugs: phenytoin (Dilantin®), valproic acid or divalproex sodium (Depakote®), carbamazepine (Tegretol®)
- black cohosh (Cimicifuga racemosa)
- chemotherapy agents (certain ones)
- comfrey (Symphytum officinale, S.asperum and S. uplandicum)
- HIV drugs (certain ones)
- household, garden and industrial supplies and chemicals
- iron supplements
- isoniazid – tuberculosis medication
- kava (Piper methysticum)
- methyldopa (Aldomet®) – anti-hypertension drug
- methotrexate – multiple uses including cancer, psoriasis, and rheumatoid arthritis
- nefazodone (Serzone®) – antidepressant
- niacin (vitamin B3) in high doses
- recreational drugs (some more than others)
- statins – cholesterol-lowering medications such as Lipitor® and Zorcor®
- vitamin A (above 5000 units daily)
Safe medication use starts with you and your medical provider. Tell your provider about everything you are taking. Include all dietary substances. Do this even if you fear that you will be judged. You can say, “You might not believe in herbs, but I do. I want to do this safely and here is what I take.” If your provider doesn’t know much about it or is critical, then at least you tried.
If your medical provider prescribes a medication and you don’t mention that you have liver disease or that you are on 15 other drugs or herbs, or that you drink a six-pack of beer every day, then how can your provider know what the safest medication is for you? For instance, Vicodin® has a lot of acetaminophen in it. If that is all you take and you follow directions and you don’t have cirrhosis, then it is unlikely you will have problems. However, if it turns out that every day you take 4000 mg of acetaminophen, round the clock cold capsules that include acetaminophen and you can’t live without daily vodka gimlets, then vicodin® is not the best choice.
Just because a substance has the potential to interact with another substance does not mean that you should not take it or that something bad will happen. It means the potential is there and you should talk about this with your medical provider. There may be safer ways to take certain combinations of substances, such as taking one in the morning and the other at night.
Consult with your pharmacist. Fill all your prescriptions at one place since most pharmacies keep records to help patients avoid interactions. Many pharmacies will allow you to add supplements and over-the-counter drugs to your file. Usually you can do this yourself online.
There are Internet sites that will look for potential interactions between medications and dietary supplements, such as www.drugdigest.org. Click on the Check Interactions tab and enter the information. Recommendations may be made, such as to allow 4 hours between taking calcium and thyroid medications.
Fortunately there are usually enough medications on the market that there are suitable alternatives for most medications. Occasionally, the potentially hepatotoxic drug is the best choice, so in that case, your medical provider will want to carefully monitor your liver. This usually means regular blood tests measuring your liver enzymes.
When it comes to medication safety, remember these three words—take as directed. Your medical provider may have no qualms about the safety of a drug, but if you take too much or swallow it with a shot of bourbon, you aren’t following doctor’s orders. Your provider may write the prescriptions, but following through is your responsibility.
HCSP’s Factsheet HCV and CAM: Dietary Supplements to Avoid
Supplements to Avoid.pdf
U.S. Food and Drug Administration
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HIV/HCV Coinfection News from EASL
The 44th Annual Meeting of the European Association for the Study of the Liver (EASL), which took place April 22-26 in Copenhagen, Denmark, included a number of presentations on HIV/HCV coinfection.
HCV Recurrence after Spontaneous Clearance
HIV positive people are less likely than HIV negative individuals to experience spontaneous hepatitis C virus (HCV) clearance without treatment. P. Barreiro and colleagues from Spain looked at long-term outcomes in such patients. The researchers evaluated 827 HIV positive interferon-naïve individuals with antibodies against HCV, 174 of whom had undetectable serum HCV viral load; people with hepatitis B surface antibodies were excluded. Within the latter group, 42 had elevated liver enzymes, six of them with no known cause.
The remaining 132 individuals with undetectable HCV RNA and normal ALT underwent repeated viral load testing using an assay that could measure down to 10 IU/mL, receiving an average of three tests per person. Over a median follow-up period of three years, none of the participants had a positive HCV RNA test. Transient elastometry (FibroScan) showed that most patients had absent or mild liver fibrosis; only one had moderate (Metavir stage F2) fibrosis. The investigators concluded that there is "no evidence for low-level HCV replication [or] for significant hepatic fibrosis" in HIV positive people who spontaneously cleared HCV infection, which "strongly suggests that HCV eradication has occurred in this subset of patients."
A related study by L. Peters and investigators with the large EuroSIDA study followed 256 HIV positive individuals who were previously shown to have spontaneously cleared HCV (23% of the 1,940 HCV antibody positive patients in the cohort). During a median three years of follow-up testing, 46 patients (18%) showed evidence of HCV reappearance (HCV RNA > 615 IU/mL).
Individuals with reappearing HCV were much more likely to be injection drug users than those who remained HCV RNA negative (80% vs. 58%), and the investigators concluded that reinfection from repeated exposure was a more likely explanation than HCV relapse due to HIV-associated immune suppression. Conversely, patients with reappearing HCV were significantly less likely to have hepatitis B virus (HBV; 2% vs 15%), supporting previous research showing that the viruses inhibit one another and that HBV can offer some protection against HCV.
Several studies have shown that HIV/HCV coinfected people tend to experience more rapid liver disease progression than those with hepatitis C alone, but the underlying mechanisms are not well-understood.
S. Galastri and colleagues from Italy evaluated the biological effects of the HIV gp120 envelope protein on cultured human hepatic stellate cells in a laboratory study. These cells, when activated, produce collagen and other scar tissue material responsible for liver fibrosis and cirrhosis.
The investigators found that the stellate cells expressed the chemokine receptors CCR5 and CXCR4 – which HIV uses to enter host cells. Stellate cell chemotaxis (chemically induced migration) increased when the cell cultures were exposed to gp120 from two different M-tropic HIV strains (which typically use the CCR5 receptor), but gp120 from T-tropic HIV strains (which typically use the CXCR4 receptor) had a more modest effect. When the stellate cells were pretreated with a CCR5 antagonist (TAK-779), gp120-induced cell migration was reduced. "This study shows that HIV gp120 exerts multiple effects on human hepatic stellate cells, including stimulation of migration and increased expression of MCP-1 and type I procollagen," the investigators concluded. "These data suggest a direct role of HIV in the process of hepatic fibrogenesis."
In another Italian study, M.C. Cantarini and colleagues looked at the prognosis of HIV positive patients with hepatocellular carcinoma (HCC), which, since the advent of effective antiretroviral therapy, has become an important cause of illness and death in this population. The investigators analyzed 28 HIV positive patients (all but one, men) diagnosed with HCC between 1998 and 2007, comparing them with 28 matched HIV negative individuals with HCC who had a similar cause (mostly hepatitis C) and extent of liver dysfunction.
Most (90%) of the HIV positive patients were on antiretroviral therapy and they had a median CD4 cell count of about 300, indicating moderate immune dysfunction (the current threshold for starting HIV treatment is 350). Overall, 32% of study participants had Child-Pugh Class A disease, 34% had Class B, and 25% had Class C. Nearly half (46%) had early HCC, 21% had intermediate-stage cancer, 7% had advanced HCC, and 25% had end-stage disease. These distributions did not differ significantly between HIV positive and HIV negative patients.
Likewise, types of HCC treatment also did not differ between the HIV positive and HIV negative patients, with 89% and 85%, respectively, undergoing curative or effective therapy. The median survival duration – 16 months (range 3-29) – was the same in both groups. These findings led the investigators to conclude that, "The survival of HIV positive patients with chronic liver disease and HCC is similar to that of HIV negative patients and is determined by liver function, cancer bulk, and cancer treatment."
People with HIV were once considered poor candidates for organ transplants, but this changed with the development of effective antiretroviral therapy. Today, many centers perform such transplants, but studies of outcomes in this population have produced mixed data.
D Joshi and colleagues used data from a prospective U.K. transplant database to evaluate long-term outcomes for HIV positive adults receiving cadaver liver transplants. Out of 6,315 transplants performed between March 1994 and April 2008, 33 recipients (0.5%) were HIV positive, including 16 coinfected with HCV and six coinfected with HBV; 847 patients (13.4%) had HCV but not HIV.
The HIV positive patients had a significantly shorter average duration of survival after liver transplantation than HIV negative individuals (44 vs. 57 months), and HIV/HCV coinfected patients had significantly shorter survival than those with HCV alone (29 vs. 48 months). Survival rates were lower in the HIV/HCV coinfected group compared with the HCV monoinfected group at one year (73% vs. 87%, respectively) and five years (53% vs. 69%) after transplantation. There was no significant difference in survival, however, between HIV positive and HIV negative patients without HCV at one year (87% in both groups) or five years (74% vs. 78%). "Our data suggests that HIV positive patients have a good prognosis post-liver transplant," the researchers concluded. But, they continued, survival among HIV/HCV coinfected patients is "significantly worse" compared with HCV monoinfected and HIV monoinfected patients.
In a related study, D. Carmona and colleagues from France retrospectively analyzed factors that predicted mortality among 78 HIV/HCV coinfected individuals on the liver transplant waiting list between March 1999 and December 2007. Two-thirds (67%) received a new liver, 21% died while awaiting a transplant, and 13% were still alive at the time of the analysis. In a multivariate analysis, use of antiretroviral therapy at the time of the first referral, American Society of Anesthesiologists (ASA) Physical Status Scale scores, and Child-Pugh scores at the time of listing were significantly associated with mortality. The researchers concluded that Child-Pugh scores, rather than MELD scores, should be used to predict mortality in HIV/HCV coinfected patients.
Post-Transplant HCV Recurrence
A. Moreno and colleagues from Spain looked at outcomes among 272 wait-listed liver transplant candidates with cirrhosis due to hepatitis B or C. Most (82%) had HCV alone, 13% had HBV alone, and 5% had both HBV and HCV; 14% were HIV positive, all of whom had either HIV/HCV coinfection or HIV/HCV/HBV triple infection.
In this analysis, HIV positive and HIV negative candidates differed significantly with regard to rates of liver transplantation (32% vs. 57%), withdrawal from the waiting list (8% vs. 15%), and death (46% vs. 22%). HIV positive patients were less likely than HIV negative candidates to survive for 90 days (68% vs. 88%), six months (57% vs. 77%), or one year (47% vs. 72%) while awaiting a transplant.
Among candidates who did receive donor livers, however, there were no significant differences in survival between HIV positive and HIV negative patients after one year (100% vs. 85%), three years (76% vs. 71%), or five years (51% vs. 65%). But HIV/HCV coinfected liver recipients were about twice as likely as HCV monoinfected patients to require interferon-based therapy to manage recurrent HCV infection (58% vs. 27%), and the risk of death due to HCV recurrence was much higher (100% vs. 25%).
T.M. Antonini and colleagues from France also looked at prognosis of post-transplant HCV recurrence in HIV/HCV coinfected patients. This analysis included 68 HIV positive patients who received liver transplants between December 1999 and January 2008, 43 (63%) of whom had cirrhosis related to hepatitis C. After transplantation, 15 patients developed severe fibrosis (Metavir stage F3-F4) in the new liver within an average of 19 months (range 2-48) and nine developed fibrosing cholestatic hepatitis within an average of six months (range 2-14).
Among 12 patients who received hepatitis C therapy, only one achieved sustained virological response, two relapsed, and nine were either non-responders or did not tolerate treatment. Twelve patients (80%) died within an average of 25 months (range 4-88), nine due to hepatitis C recurrence and three due to other causes. Based on these findings, the researchers concluded that, "Anti-HCV therapy should be started earlier after liver transplantation in HIV-infected patients."
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Disability & Benefits:
An Overview of Disability Insurance Coverage
Jacques Chambers, CLU
Disability insurance is coverage that replaces a portion of your salary if you are unable to work due to a medical condition. There are two main types of disability insurance. Most comes from employers as part of the employee benefits package offered to employees; this is called Long Term Disability (LTD) insurance. The second, Disability Income (DI) insurance, is an individual policy purchased by an individual directly from an insurance company.
Before considering going out on disability it is important that you know what benefits are available to you. Although it is not necessary to read and understand every word of your insurance policy, there are some basic provisions that you should be aware of. The provisions below are all part of an employer provided long term disability policy. Individual policies will have similar provisions except where noted.
Since the vast majority of disability coverage comes from LTD policies through employers, this article will focus on that coverage, however, individual DI coverage has most of the same features.
Summary Plan Description: Under federal law (ERISA), an employer is required to give all employees at the time of their enrollment, and additionally upon request, a copy of the Summary Plan Description of their insurance plan. That SPD will have virtually all the provisions of the coverage listed in it. They are available from the employer.
Eligibility: LTD policies from employers usually make coverage effective for all eligible, active, full-time employees upon completion of their initial probation or waiting period – usually one to three months after date of hire.
Eligibility ends when employment ends, usually the very same day, occasionally to the end of the month. As long as a person becomes disabled while eligible for coverage, it makes no difference if coverage is later stopped; disability benefits will still be available.
An individual policy becomes effective on the Policy Date and remains in effect as long as the insured continues to pay premiums.
A long term disability income policy pays benefits should you become totally disabled, which begs the question: how do they define total disability? The policy will always define “total disability.” It is important that you read and understand the contract’s definition of disability.
Generally, a plan will have two definitions of total disability: “own occupation” and “any suitable occupation.” Most group policies use both definitions. They apply the “own-occupation” definition during the first two years of disability, and apply the other after you’ve been disabled for two years.
Own-occupation: Under an “own-occupation” definition of disability, you are considered to be totally disabled if you are unable to perform the material duties of your own occupation.
For example, if you are a switchboard operator and have polyps removed from your vocal cords, you are totally disabled because you can’t speak on the telephone, and that is clearly a material duty of your own occupation. On the other hand, if you are a typist and occasionally cover the switchboard when the operator is at lunch or on breaks, you can still perform the “material” duties of your own occupation and would not be able to get benefits under this definition.
Any-suitable-occupation: Under an “any-suitable-occupation” definition of disability you are totally disabled if you are unable to perform the material duties of any occupation for which you are reasonably suited by education, training, or experience. As you can imagine, it is harder to be considered to be disabled under this definition than under an “own-occupation” definition of disability.
An example of being disabled from performing your own-occupation, but not any-suitable-occupation, is the surgeon with arthritis in her hands so that she can’t perform surgery, but is capable of teaching or consulting on surgery.
The elimination period is the period of time between leaving work on disability and the start of benefit payments to you. Unless there is income from another source during that period, such as sick leave or short term disability, you will have no income at all until the elimination period is over.
Many employers will have a 90 day waiting period. Some may offer shorter periods. Others, especially those in states that have mandatory short term disability plans, may have an elimination period of up to six months.
The benefit amount under group Long Term Disability plans is a percentage of your salary at the time of disability, with a maximum cap. A typical plan reads: a benefit in an amount equal to “60% of your Basic Monthly Earnings to a maximum monthly benefit of $5,000.”
Individual DI policies have a benefit that is a flat dollar amount, such as $2,000 per month, rather than a percentage of salary at time of disability.
Basic Monthly Earnings: Each plan defines the earnings on which the benefit is based. Generally, the earnings on which the benefit is based is your gross (not your take-home) salary at the time you become disabled. The definition will also state whether Basic Monthly Earnings include overtime, commissions, bonuses, etc., although generally they are not included.
Group Long Term Disability Plans will not pay full benefits if there are other disability payments being made. These are called “offsets” or simply “other income.” Only income listed in the policy can offset LTD benefits. Sources of income which can offset LTD payments generally include:
- State mandated disability payments;
- Social Security Disability Insurance (SSDI) which you are receiving and other government disability benefits;
- Disability payments from a pension or retirement plan; and,
- Disability payments from another group LTD policy.
- For Example: The plan pays 60% of salary and your monthly gross income is $3,000 per month. 60% is $1,800 but the plan will subtract your SSDI payment of $1,000 so, while you will receive 60% of your salary in total, only $800 will come from the LTD plan.
Minimum Monthly Benefit: There will almost always be a minimum benefit an LTD Policy will pay despite any other income you receive. It is usually either a flat amount such as $50 or a percentage such as 10% of your normal benefit but no less than $100.
Individual DI policies do not typically offset their benefits. You receive the full dollar amount of the policy over and above any other disability income you receive.
Maximum Benefit Period: The Maximum Benefit Period is the longest period during which benefits will be paid. The typical period is “to age 65” although some plans will only pay for five years or other limited periods.
Many plans will show a schedule for maximum benefit period such as:
- Claims starting before age 60
….......to Age 65
- Claims starting when age 61
- Claims starting at age 62
- Claims starting at age 63 or later
Many plans are now paying benefits to “Normal Retirement Age” since Social Security retirement is slowly increasing to age 67.
Mental and Nervous: Most plans limit the Benefit Period if the disability is due to a mental or nervous disorder. The plans typically pay such claims only for twenty-four (24) months.
Subjective Symptoms: Some plans limit to twelve or twenty-four months, the Benefit Period for claims that are solely due to “subjective” symptoms such as fatigue or pain or “soft-tissue” damage. It should be noted that this limit will not apply if there is an underlying, organic cause for the symptoms, such as HCV.
Pre-Existing Condition Provisions: A major provision for newly hired employees is the exclusion for disabilities caused by a pre-existing condition. Every employer provided LTD policy will have such a provision.
Each pre-existing condition provision will include two time periods: a “look back period” and a “pre-existing condition waiting period:”
- Look Back Provision: This provision defines which conditions are considered to be “pre-existing.” Typical wording is something like: “A condition for which medical treatment or advice was rendered, prescribed, or recommended or medications taken within the 6 months prior to effective date of coverage.” 90 days to six months is the norm for a look back period.
- Pre-Existing Condition Waiting Period: This is the period of time you must be covered before a pre-existing condition, as defined above. It is usually one year, but can be longer depending on the plan.
- Example: Your plan has a Look Back Period of six months and a Waiting Period of twelve months and you are being treated for HCV and you see the doctor every three months. Because you had medical treatment in the six months before the coverage started, the plan will not cover a disability related to HCV if you stop work due to an HCV-related disability in the first twelve months of coverage. If, however, you go out on an HCV-related disability after that, the plan will pay full benefits.
All plans have exclusions and limitations beyond the Pre-Existing Conditions Exclusion and the Mental and Nervous Limitation. They usually exclude benefits for disabilities due to:
- Declared or undeclared war
- Injury incurred while participating in the commission of a felony
- Work-related injury
- Self-inflicted injuries
Income Taxability of Benefits
Whether or not your benefits are subject to federal (and most states’) income tax depends on how the premiums were paid. Under those rules, either the premium or the benefits will be subject to income tax, but not both. Generally, this means:
- If the employer pays for the Long Term Disability plan, any benefits you receive will be income taxable.
- If you pay all the premiums with after-tax dollars, the benefits are not-taxable. If you pay the entire cost yourself either directly or through payroll deduction with dollars that will be included in your W-2, then the premiums are paid with after-tax dollars so the benefits are not taxable.
- If you pay a part of the premiums and your employer pays the remainder, you will only be taxed on the portion that your employer paid – in the same proportion as payment for the premiums. For Example: If your employer pays 70% of the premium and you pay 30% through payroll deduction, then 70% of each benefit check will be taxable and 30% won’t.
Group long term disability (LTD) plans and individual (DI) disability income policies can be instrumental in supplementing other disability income that helps a disabled person and his or her family maintain some quality of life economically. But they are all legal contracts that need to be understood prior to accessing them. Understanding these policies should be an important part of your pre-disability planning.
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