Disability insurance is intended to protect you if you are unable to work due to illness, injury or a disability. It provides a financial cushion that enables you to seek the treatment you need while providing income replacement so you are able to pay your bills.
Depending on your policy and the length of your absence, this insurance typically replaces between 60 and 85 percent of your regular income, up to a maximum amount. Keep in mind, these policies often impose limits on the specific amount paid over a specified period.
When you are unable to work it may be a simple matter of taking a few days off. In such cases, you may be entitled to take sick days and you will continue to receive your salary. However, during a prolonged absence, you may need to file a claim for long-term disability (LTD). LTD insurance can help you get back on your feet again but denials and terminations are not uncommon. Filing a claim and appealing a denial or termination can be confusing so it is important to understand how the system works. At Avanessy Giordano LLP, we are here to answer your insurance questions and provide guidance when you are not getting the benefits you deserve.
What is Group Long-term Disability Insurance?
Many companies offer their employee’s group long-term disability insurance. The main advantage of a group plan is that rates are lower than if you tried to buy coverage as an individual. The employer may pay all or just part of the premium so you may be expected to contribute to the plan through payroll deductions. In some cases, you could be expected to pay the entire premium.
There is no law in Ontario that requires LTD insurance and you may be able to opt-out of the plan. However, it could be part of your terms of employment.
Insurance policies can differ depending on your employer but, generally speaking, your group benefits may provide short-term disability (STD) and long-term disability coverage, which are meant to protect you in the event you are unable to perform the duties of your job.
Short-term disability insurance provides benefits if you are unable to work for up to six months while LTD is for circumstances where you are off the job for more than six months. Unlike an STD claim, long-term disability benefits can continue until you are well enough to return to work or until the end of the coverage period, which is usually at age 65.
In many cases, short-term disability provides a higher percentage of your income during your claim than LTD. So, for example, if you are on STD, you may receive 85 percent of your regular pay for up to six months. After that, you may receive 60 percent for the duration of your claim under long-term disability.
With any insurance policy, there are exemptions that could affect your claim. One common exception is for pre-existing conditions. If you have a recurrence of symptoms from a previous condition that you had prior to starting your job, it is highly likely you will be denied benefits.
What is Occupational Insurance?
Under the Workplace Safety and Insurance Act employers in certain industries must have occupational insurance coverage with the Workplace Safety and Insurance Board, which provides no-fault collective liability insurance. Other industries may also have occupational LTD insurance to cover illnesses and injuries in the workplace.
Occupational insurance policies have two different definitions of disability — own occupation and any occupation with important distinctions that could determine your eligibility for ongoing benefits.
With own-occupation insurance, you are entitled to benefits if you are unable to perform the specific functions of your job due to injury, illness or disability.
As the description implies, any occupation insurance will only pay benefits if you are unable to work in any occupation you are reasonably qualified for, based on education or previous experience. It is important to note that “any” in this case does not mean you can be forced to accept any random job. You have the reasonable expectation to be placed in a position suited to your education, experience and training.
This is an important distinction. If you are still capable of working, even at a lower-paying job, you would not be eligible for benefits under an any-occupation policy. It is like a police officer being relegated to desk work after suffering an injury while on patrol, for example. Of course, this means it is easier for the insurance company to deny your claim or terminate your benefits. Typically, an employer only provides any-occupation disability insurance so it would be up to you to purchase a supplemental policy that provides additional protection.
Over the years, Canadian courts have made rulings that help define the standard for own-occupation policies. If you are still able to work but can no longer do all the essential duties of your job, you are considered disabled. The keywords are essential duties as opposed to minor tasks that may be part of your workday. Remember, just because you are able to do some parts of your job, it doesn’t mean you could do your job in its entirety, in which case you would qualify for benefits.
With any long-term disability claim, there is something known as an offset provision, which means other types of benefits, such as the Canada Pension Plan Disability Benefits, can reduce your benefit amount.
What Are my Responsibilities?
When it comes to making a claim, you must have been performing your expected duties prior to your injury or disability.
You are expected to seek medical treatment for your condition and provide proof that you are unable to work. Any delay in getting treatment could have an adverse effect on your claim. Keep all medical records and notes from your doctor that are specific to your illness or injury.
You will also be expected to participate in any rehabilitation program arranged by the insurance company while you are collecting benefits. Failing to do so can result in your benefits being terminated.
You may also be asked to take part in modified duties or retraining while you recover.
When Own Occupation Becomes any Occupation
Typically, the own-occupation test only applies for a limited period, usually 24 months. Prior to the end of that period, the insurance company will assess your claim based on your ability to work in any occupation. You could be interviewed or asked to complete a questionnaire that will ask about your work experience, education and training.
That information can then be used to determine if there are alternative occupations you could perform. If it can be proven that you can work at any occupation as defined by the policy, your disability benefits will be terminated.
What if my Claim is Denied or my Benefits are Terminated?
It is not uncommon for an insurance company to say no but that is not necessarily the end of your claim. You could be denied because the insurer is not convinced you are totally disabled in accordance with your policy. That can happen even if you believe you have sufficient medical evidence to support your assertion. Your benefits could be terminated when the definition of disability changes from own occupation to any occupation.
You have two options. You can appeal the decision with the insurance company. It is important to note that you only have a short window to appeal, generally about 90 days. Check with your insurance company so you don’t miss your deadline.
You can also file a lawsuit against the insurer. This option also comes with a deadline. In Ontario, you have two years from the time of the denial to file a lawsuit.
Ava Gio can Help you Fight the Insurance Company
We have the expertise and experience to take on the insurer while you focus on your recovery. We will review your claim, explain the process and keep you apprised of all updates in your case. If your application for long-term disability benefits has been denied or if your benefits have been terminated, don’t take a chance with your future. Contact us for a free consultation.