What is long term disability coverage?

Long term disability insurance is meant to protect employees in situations where they are unable to return to work for an extended period of time due to some kind of injury or ailment. Long term disability insurance provides employees replacement income during recovery. It allows the employee to undergo rehabilitation if possible and to gradually return to work. Employers looking to assist employees on long term disability may accommodate them and allow them to return to work on modified duties.

Short term disability insurance often goes hand in hand with long term disability insurance. The long term disability coverage usually starts when the short term coverage ends. There are many instances when employees sustain injuries or ailments away from their workplaces such that worker’s compensation does not cover them.

For example, if a person suffers a heart attack or a stroke, that person may be disabled and unable to return to work for a long time. One of the worst things that can happen to an employee is to suffer an injury that prevents them from earning an income. In these situations employees have to rely on short term and long term disability coverage.

This can be a very stressful period of time as the employee is usually worried not only about recovering from his or her ailments, but also about whether disability coverage will continue, and ultimately, whether his or her position will remain available for an eventual return to work.

The stress of dealing with recovery and also worrying about the future can be overwhelming. This is why it is important for the employee to consult an employment lawyer in order to fully understand his or her rights.

Are employees frequently dismissed while on long term disability?

There are many instances when workers on long term disability are dismissed. The employer rarely notifies the employee directly  that they are dismissed. Nonetheless, the actions of the employer may amount to a constructive dismissal.

The employer may notify the employee that their position is no longer available or that the position would no longer be available when they are able to return to work. Instead of focusing on rehabilitation and full recovery, the employee may be put in a precarious position by having to look for work and return to work before full recovery.

An employment lawyer can assist you with your long term disability claim and ensure that your rights are protected should your employer decide to dismiss you while you are on long term disability. You may be able to start a wrongful dismissal action.

On the other hand employers have to be very careful how they approach individuals on long term disability. Companies are ofter concerned that insurance premiums may increase if long term disability claims are filed by employees. This is especially true if the particular insurance plain is paid for by the employer.

Although a company may be unwilling to keep a position available for the employee it may be prudent to do so. Furthermore, employers and insurance providers alike may be suspicious of the legitimacy of the employee’s claim for disability and may be tempted to engage in surveillance or to engage in medical re-assessments. It is important to note that employers are not allowed to discriminate in offering or administering benefits plans for employees as indicated in the Benefits Plans section of the Employment Standards Act guide.

Employers should seek legal advice from an employment lawyer before engaging an employee on long term disability with the intent of dismissing the employee or reducing or cancelling payment of benefits.

Below are some imporatant topics as discussed in The Law on Disability Issues in the Workplace, a book on various disability issues co-authored by Ken Alexander.  These topics and other related concepts are discussed in great detail in the full text which can be purchased here.

Onus of proof in a claim for disability benefits

The law on the onus of proof is complex, but the plaintiff should be prepared to prove his or her claim. The following are some of the legal principles that have been established by case law over the years:

1. The burden of proof to establish coverage and a defined disability rests on the insured as plaintiff
2. The policy wording must be examined in each instance
3. The onus rests on the insured as the definition of disability is altered to “total disability” at the “any occupation” period
4. Once the insured has presented a prima facie case of total disability, the evidentiary burden shifts to the insurer
5. The insured retains the overall onus to prove the case on a balance of probabilities.
6. There is no shifting onus, absent particular policy wording as noted in point 2, once the insurer has made payments and then subsequently has decided to discontinue payments.

While the above list provides some guidance, it is by no means an exhaustive list of all the concepts that govern the onus of proof. As a result, it is important to retain an employment lawyer with experience in handling cases involving long term disability claims.

Considerations when advancing or challenging a disability claim

An insured person has several important steps that he or she must take to advance a claim, specifically:

1. to be prepared to show a continuity of the disability
2. to take proper steps to follow his or her physician’s instructions
3. to follow the policy requirements
4. to be aware of policy exclusions such as a pre-existing medical issue

The following are some of the considerations an insurer may want to make when deciding if there is a reasonable basis to dispute the steps by which the insured must prove the claim:

1. the insured not having active employment
2. relevant medical tests have not been made
3. the disability was not continuous from its onset through the qualifying period to the date of commencement of benefits
4. the disability was not continuous from the date of commencement of benefits, to the date of “any occupation” benefits, to the current date
5. limitation defences to the claim

The above are only some of the considerations that must be made by the employee and the insurer. Each case must be examined on its facts and decisions with respect to advancing or challenging a claim should be made after receiving legal advice.

The duty to mitigate

The insured individual has a duty to mitigate his or her claim. This usually means taking a common sense approach and following the recommendations of his or her doctor. The insured must take steps to minimize his or her loss. Some of the principles to considered with respect to the duty to mitigate include the following:

1. Where there are conflicting medical opinions and the plaintiff (the insured) follows one of them, there can be no adverse determination against him.
2. The issue is one of precise facts before the court in each instance. Some of the considerations to be weighed will be:
   • the degree of risk to the plaintiff from the surgery (if surgery is involved)
   • the gravity of the consequences of refusing it, and
   • the potential benefits to be derived from it
3. The burden of proof rests on the defendant (the insurer)

4. That burden includes not only showing a failure to mitigate, but also the extent to which the loss may have been reduced if those steps had been taken.

This is a very technical area of law and the parties should take actions only after receiving legal advice.

Recurrent disability

A recurrent long term disability may place an individual in a precarious position. Most disability policies have a provision that allows for a recurrent disability claim which permits an employee to continue a pre-existing claim provided that a related claim is presented within a specific period of time.

This means that if a person who was on long term disability and returned to work but soon thereafter needed to again go on long term disability as a result of a recurrent issue, would be able to do so if following the prescribed time under the policy to make a related claim.

In effect, this would be continuing the pre-existing claim.

If a person in this position was terminated after his or her initial claim and had a recurrent and related claim, he or she would likely have a hard time obtaining new long term coverage at a new employer. Furthermore, it may be very difficult to find new employment. As a result, if the person was wrongfully dismissed by their employer, reinstatement at the may be the only remedy available.

End of employment

If an employee who is covered by group disability insurance is terminated, the first step he or she should take is to undergo a comprehensive medical examination.

This is especially true if the recently terminated employee has been asked to sign a release or a settlement agreement with respect to any claims he or she may have. Before signing a release or a settlement agreement, the employee should have full knowledge of any medical vulnerability.

The employee should also undergo a comprehensive medical examination if he or she is resigning or if the individual has already found new employment as new disability coverage may be jeopardized based on a pre-existing disability.

If an employee elects to resign, he or she should do so after receiving legal advice as a resignation will have serious consequences on any claims against the former employer. A resignation must be voluntary and an employee cannot be placed in a position where he or she has no choice but to resign. This is especially true if the employee is dealing with short term or long term disability issues.

The information on this website is for informative purposes only. It is not legal advice. A lawyer can only be retained after a consultation. If you need a wrongful dismissal lawyer or if you have any other employment law issues, call Ken at: 416 323 3614