You are disabled and cannot work. Your workplace provides Long Term Disability (LTD) coverage as part of your health benefits package. If you are unable to work for health reasons, the LTD insurance benefits coverage should provide you with income protection while you are unable to work for reasons related to your illness or disability. You apply for LTD benefits but the insurance company denies your claim. What can you do?
1. Do not give up!
First and foremost, do not give up. A high percentage of LTD claims are denied for a variety of reasons. Insurance companies save money when individuals simply accept the denial or do not have the resources to contest their decision. Most LTD insurance policies provide for an internal appeal process which must be started within a specific time frame, usually 60 days. An individual may also choose to proceed immediately to litigation. We recommend consulting with legal counsel to discuss your available options.
2. Internal Appeal
As stated above, most LTD insurance policies provide an internal appeal process where individuals can contest the insurance company’s denial of their claim. It is important to remember that because this is an internal process, the insurance company is reviewing its own decision. It is therefore unsurprising that a significant amount of appeals are denied. We often do not recommend proceeding with the internal appeal process unless you have new, additional medical information to provide to the insurance company during the appeal process. A repetition or reframing of information already provided is unlikely to be successful in convincing the insurance company to reverse its initial decision.
Federal public servants have access to an additional step in the appeal process. Depending on whether they are covered by the Public Service Management Insurance Plan (for non-unionized employees) or by the Disability Insurance Plan (for unionized employees) individuals may request an independent review of their case. The Board of Trustees of the PSMIP or the DI Plan Board of Management then have the ability to make recommendations to the insurance company regarding the case. The insurance companies responsible for these plans most often accept the recommendations following these reviews. If you are unionized, contact your union to see if they are able to assist. If you are not unionized or if your union is unable to assist, we recommend you contact experienced legal counsel for advice.
Your best option to successfully challenge the denial of your LTD claim and enforce your rights may be to sue the insurance company in court. This can be done immediately after the initial denial or following an unsuccessful appeal. Filing a Statement of Claim against an insurance company starts a legal process where various steps are required to be taken by both parties prior to trial.
While proceeding with litigation may be a daunting process, it is important to know that the litigation process is designed to encourage the parties to settle the case. For example, in Ontario, mediation is mandatory. Mediation is a process for resolving disputes where the parties meet with an independent mediator who assists the parties in reaching an agreement. It is our experience that many cases settle at mediation. However, if a mutually satisfactory agreement cannot be reached, the case proceeds to the next step of the process. There are further opportunities to discuss settlement throughout the litigation process, up until trial.
4. The clock is ticking…
Regardless of how you decide to challenge the insurance company’s denial of your LTD benefits, it is very important to keep track of your timelines. Proceeding through the internal appeal process does not necessarily stop the clock for starting a legal action in court. Generally, you have two (2) years from the initial denial of your LTD claim to pursue legal action though there are exceptions to this general rule. It is important to review the LTD insurance policy and applicable provincial limitation period to understand the time limits for your particular case.
If your LTD benefits are denied, we recommend that you seek advice from competent experienced lawyers as soon as possible following your initial denial in order to be properly advised of your rights and the options available to you to obtain a satisfactory resolution.
We are here to help navigate the LTD application 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 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.]