Long Term Disability (LTD) is intended to provide income replacement coverage if you are unable to work due to injury or illness. Long term disability benefits will normally commence once your short term disability benefits, if you have this coverage, have been exhausted. Most Long Term Disability policies contains a waiting period or elimination period, before you can start receiving payments. Once the elimination period passes, the insurance company has to determine whether you are “totally disabled”, i.e. unable to do your job, or in some cases any job, due to an injury or illness. If you meet this definition, which can vary from policy to policy, then your Long Term Disability coverage can begin. The following are some important points you should be aware of when applying for Long Term Disability benefits.
How long is my Elimination Period?
Your insurance policy will provide a specific elimination period, as these vary between insurance companies. In many cases the elimination period is set to correspond with short term benefits. For example, many plans that include short term disability coverage are designed so that your elimination period ends when the short term benefits run out, which means your benefits become payable without a gap in coverage.
How long is the elimination period? Will you be able to access short-term benefits in the meantime? Does your policy say that you have to apply for Employment Insurance benefits? How is your elimination period calculated? These questions would be answered in your policy. Taking the time to read your policy can prevent costly mistakes and loss of time in the application process.
What is the impact of returning to work on my Elimination Period?
It is very important to understand how your elimination period is calculated. Depending on the method of calculation, you may restart the elimination period if you return to work. This would delay the payment of Long Term Disability benefits. For example, suppose that your policy prescribes a 90 day elimination period. If your policy calculates the period in terms of “consecutive days”, returning to work for just one day during that period may restart the 90 day waiting period. On the other hand, if your elimination period allows for “interrupted periods”, the you can go to work on certain days without restarting the 90 day process.
If You Have a Recurrent Disability, You May Get to Skip the Elimination Period
If you received Long Term Disability in the past for the same illness or disability, then most Long Term Disability policies contain a clause allowing you to skip the elimination period. This is usually found in the policy under the heading of “recurrent disability”. The policy will typically treat this later period of disability as a continuation of the earlier period, provided it is within the time limit stated in the policy. For example, suppose you previously went on Long Term Disability with a back injury, and eventually returned to work. If you become disabled later on due to back pain from the same injury, your benefits can be reinstated immediately, without the need to wait for the elimination period to end.
On the one hand, these clauses are useful because they allow you to avoid waiting through another elimination period for the same disability. On the other hand, any time limit for payment of benefits runs from the start of the first period of disability. This means that if your policy pays benefits for two years per claim, the two-year period would not restart the second time you go on Long Term Disability for the same disability. For more information, see our article on Successive Periods of Total Disability.
My Elimination Period is Over and I’m Still Disabled – Do I have to Apply for Long Term Disability?
Receiving short term benefits, if you have this type of coverage, does not automatically entitle you to Long Term Disability coverage even if your disability has not changed. You should start your Long Term Disability application as soon as you know that you are unable to return to work before of illness or injury. At this point, your insurance company will want proof that you are “totally disabled” under the terms of the policy before they approve your claim. The application process can be long and difficult, and it often requires lots of medical evidence. For more information on how to navigate through the Long Term Disability application process, please see our article.
Getting Approved for Long Term Disability – Do I Meet the Definition for “Total Disability”?
Once you have applied for Long Term Disability and your elimination period has passed, the benefits become “payable”, but before you actually get “paid”, the insurance company has to determine that you remain unable to do your occupation. To make this decision, the insurance company looks at the medical documentation and compares it to the definition of “total disability” in your policy. If you meet the definition your Long Term Disability claim will be approved and your benefits will begin.
If there is excessive delay in providing your long term disability benefits, you may have a claim for aggravated (bad faith) and punitive damages against the insurance company. Please see our article “Mental Distress and Punitive Damages in a Long Term Disability Claim”.
Once your benefits begin, they usually continue for 24 months. This 24 month period is called “own occupation” coverage because the insurance company defines total disability as being unable to do the essential duties of your own occupation, whether in your current work place or not.
After 24 months however, the definition of total disability usually changes. If you want to continue receiving benefits you need proof that your disability leaves you unable to perform the duties of any occupation for which you are reasonably qualified. This rule applies even if you are still unable to return to work at your original job. In practice this means that you may lose your benefits even if your medical situation remains unchanged.
The Long Term Disability application process can be long, complicated and stressful. A Long Term Disability applicant faces a number of legal and administrative hurdles at a time of great vulnerability. It is easy to make mistakes that cause costly delays. An experienced disability lawyer can help you understand the terms of your policy and how to make your way through the application process.
We are here to help navigate the Long Term disability claim process. Consult one of our experienced Disability lawyers at Raven, Cameron, Ballantyne and Yazbeck LLP if you are considering making a claim for disability benefits or if your disability claim for benefits has been denied.
[This article is for informational purposes only and does not constitute legal advice, which cannot be given without consideration of your individual circumstances.]
By: Raphaelle Laframboise-Carignan, Anna Lichty and Geoff Dunlop (articling student)