Long term disability insurance is a safety net for people who become injured or sick to the point where they are unable to return to work. Long term disability insurance provides some protection by providing you with a portion of your income over the period for which you are considered totally disabled and unable to work. Read on to learn more about long term disability in Ontario.
What Totally Disabled Means in the context of Long Term Disability Insurance
There are 2 definitions or standards of disability that are used in your long term disability policy to define the period of time you are totally disabled from working.
The assessment by the insurance company of what is considered totally disabled changes over time. When you first apply for long-term disability benefits, the assessment of total disability is based on whether you can perform your own occupation. After 2 years of being on long-term disability benefits, however, the insurer will assess whether you can perform any occupation. Most commonly, the long-term disability policy has its own occupation period of 2 years, but it may be less or more depending on the policy.
To recap, the difference between own occupation and any occupation is:
- Own Occupation: you are totally disabled and unable to perform the essential duties of your current position.
- Any Occupation: you are totally disabled and unable to perform any occupation or job that you are reasonably qualified for based on your training, education, or experience.
Who qualifies for Long Term Disability?
As long as an employee has long term disability insurance coverage at the time they become disabled, they are qualified to receive long term disability benefits. The conditions covered by a policy range from physical injuries to mental health illnesses.
There is, however, a commonly made exception for pre-existing conditions. Pre-existing condition clauses exclude or restrict you from receiving long-term disability benefits if you have a recurrence of symptoms from a previous condition you had prior to starting your job. This is often included in policies in order to protect the company from a high claim payout. Typically, pre-existing conditions become an issue if a disability occurs a short time after coverage begins. The insurer may then investigate to see whether your entitlement to benefits is excluded.
Exclusions and Limitations
There is often a list of exclusions and limitations within the disability policy. If any of the listed conditions apply to you, you may not be eligible for benefits. For example, some common exclusions are self-inflicted injuries such as alcoholism or suicide attempts.
The elimination period is the waiting period between the onset of the disability and the time you are first eligible to receive long-term disability benefits. This waiting period is typically covered by short term disability benefits, if available.
Once this elimination period is satisfied, you will be eligible to receive your benefits at the end of the following month. For example, if it states in your policy that there is a 90-day elimination period, this means you are 4 months away from receiving your benefits.
How much does Long Term Disability insurance pay?
On average, depending on the disability insurance policy, the long-term disability benefit may range from 60% to 80% of your salary. The benefit is typically paid on a monthly basis and often there is a maximum monthly payment which is outlined in the disability policy.
How long can you stay on Long Term Disability?
Depending on the severity of the condition, you may potentially be able to stay on long-term disability benefits until the retirement age of 65, in the event you are disabled from performing your own job or any other occupation even with reasonable retraining. Less severe conditions, however, may range from several months to several years.
What if your Long Term Disability Claim was denied?
An employee may be denied long-term disability coverage for many reasons, one of which may be that the insurer does not believe they are totally disabled in accordance with the long-term disability policy. Even if the employee has ample documentation to support their claim for benefits including medical records and doctor notes, it may be deemed insufficient.
A worker who has been denied long-term disability benefits has two options:
- The first option is to appeal the decision with the insurer. You can appeal up to 3 times, and each one must be done within 90 days of the decision. It is important to note that unless your physician can provide significantly different documentation to support your claim, it is not the best choice to appeal the decision.
- The second option is to commence a lawsuit against the insurance company for wrongful denial of disability benefits. To achieve the best outcome, it is preferable to retain legal representation. This will take the stress off of you and allow you to focus on your recovery.
If your long term disability application is denied, don’t waste time arguing in appeals with the insurer. Instead, you could hire a Long Term Disability Lawyer at Monkhouse Law to assist you with going through the Court, which is a higher authority. Be sure to act fast in consulting us about your options given the insurer’s internal 90-day appeal deadline and the Court’s limitation deadline of 2 years which will need to be considered.
What if you are terminated while on Long Term Disability?
It is discriminatory under human rights legislation to terminate an employee due to their disability. Under the Human Rights Code of Ontario, an employer is required to accommodate an employee to the point of undue hardship. If you are terminated from your job while on disability leave, you should contact a Long Term Disability Lawyer at Monkhouse Law as soon as possible for advice about your claims and whether it may have been discriminatory.
Can an employer terminate an Employment Agreement for Frustration of Contract?
In some cases, an employer may be able to terminate the employment agreement for frustration of contract. Frustration of contract in this context of disability leave can occur if it becomes unlikely that the employee will be able to return to work within a reasonable amount of time. If frustration of contract has occurred, an employer is only required to pay the employee their minimum entitlements under the Employment Standards Act.
In this video “Basics of Long Term Disability Insurance” [6:04 min], Employment Lawyer Andrew Monkhouse covers what long term disability insurance is, how it helps employees, and what it means for employees with disability insurance.
Given the complexity of these issues, please contact a Long Term Disability Lawyer at Monkhouse Law for guidance. Monkhouse Law is an employment law firm located in Toronto with a focus on employee issues. Give us a call at 416-907-9249 or fill out this quick form. We offer a free 30-minute phone consultation.
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