By Howard Levitt and Rob Lilly
Accessing long-term disability benefits and navigating the process is no easy feat
Q: What qualifies as a disability? Does long COVID qualify? Does pandemic anxiety or depression qualify?
A: A disability is any physical or psychological illness or injury that prevents you from performing the main functions of your job. Yes, that includes long COVID, which is on the rise. It also includes depression, anxiety or any other mental illness stemming from the pandemic or otherwise. In fact, according to a new survey by Mercer, more than one-third of disability claims in Canada in 2022 are mental-health related.
Q: How much does LTD pay and is it taxable?
A: Typically, 60 per cent to 70 per cent of base salary with 66.6 per cent being the most common. Payments can last until age 65. That can be a significant sum.
If you have paid the LTD premiums, the payments are not taxable. If your employer has paid them, they are. Some employees begrudge LTD deductions from their paycheques, but it is a sound investment given the tax implications.
Q: I suffered from depression for many years before I started my job. Am I still eligible for LTD benefits if my depression gets worse?
A: It depends on the policy wording. Some LTD policies exclude claims for any pre-existing condition for which you had symptoms or received treatment in the year or so before you started the job. Others are more broadly drafted to allow coverage for pre-existing conditions if you have been treatment/symptom-free for a certain period of time after starting the new job. You will want to consult a lawyer to interpret your policy.
Q: I’ve been approved for short-term disability. Do I automatically qualify for LTD benefits?
A: No. Short-term disability periods typically range from four to six months. Toward the end of that period, you must apply for LTD benefits separately. Human resources should provide these forms to you about one month before your short-term disability period ends. If not, ask HR for them or see if you can download them from your online benefits portal or LTD insurer’s website.
You must submit a form explaining why your condition prevents you from working. And your doctor or specialist must also submit a form setting out your diagnosis and why you are unable to work. These forms go directly to your LTD insurer and your employer should not be privy to your confidential medical information. The insurance company decides if you qualify, not your employer. If your health-care professional believes you are still disabled at the LTD mark, you should qualify for LTD benefits. If the insurer denies your claim, that is when you need legal advice and assistance.
Q: My insurer cut off my LTD benefits at the two-year mark saying I can work in “any occupation.” What does that mean and is it legal?
A: Much of our litigation against insurers stems from this scenario. Most policies state you will receive benefits for up to two years if you can’t do your “own” job, but after two years, if you can do “any occupation,” your benefits will stop. Much ink has been spilled on what qualifies as “any occupation.” It requires a subjective analysis that depends on the employee’s education, training, experience, salary range and status. A doctor is not expected to flip burgers, for example. While technically a denial is legally permitted by the policy, stopping benefits is often not justified. If you are so disabled that you cannot do your own job, you likely can’t do any job.
Q: What should I do if my claim is denied or my LTD benefits are discontinued?
A: You have a legal right to appeal. Occasionally appeals are successful if new objective and convincing medical evidence is submitted. More often appeals delay the process by weeks or even months while you have no income. Remember, insurers are profit driven. If they denied or discontinued the claim the first time, chances are they will again. We recommend starting a claim immediately after a denial or discontinuance to avoid unnecessary delay.
Q: Can my employer force me back to work if my LTD claim has been discontinued or denied?
A: Employers often insist that employees return to work if the insurer denied or stopped their LTD benefits. An insurance company is not a judge. Simply because an insurer determined you are able to work does not mean you are not, in fact, disabled. Provided you provide your employer a doctor’s note explaining why your limitations and restrictions prevent you from working at all, the employer cannot force you back to work or fire you. If the employer does either, it will likely have breached its Human Rights duty to accommodate you. Only in certain cases can an employer fire you on LTD — a topic we have written about in a previous column.