Approaching Change of Definition
If you receive long-term disability (LTD) benefits for long enough, Canadian insurance companies will usually change how they define “disability” and, in turn, whether you still qualify for those benefits.
In general, for insurance purposes, disability refers to a lack of capacity to work. This is usually due to some type of illness, injury, or other medical condition. Of course, there are many, many different jobs in the world, all of which require their own specific combination of education, training, skills, experience, and physical and mental abilities to do well. A farm labourer will probably need more strength and dexterity than a professional working in an office, such as an accountant, for example. However, the accounting job is arguably more mentally demanding, requiring strong math and memory skills.
The difference between “any” occupation or “own” in your long-term disability policy
When you first submit a long-term disability claim (or even a short-term disability claim), insurance companies use the “own occupation test” to determine if they will pay out on your policy. As its name suggests, you will be considered “able” (and thus ineligible for insurance as a result) if you can still perform the duties of your current occupation.
After a period stated in your policy, usually around two years, the definition will shift. At that point, your insurer will apply the “any occupation test” to your abilities. Despite its name, the definition of work under the “any occupation test” is not actually so broad as to mean simply any type of labour performed in exchange for money.
What it does mean is that you are able to take on any job that you are reasonably qualified for based on your training and experience, not just the one you had when you applied for disability. Compensation for any new job under this test should not be significantly less than you received in your previous position. Your fitness for future training and education that could qualify you for other types of work may also be a consideration.
What happens before the change of definition takes effect?
Because the change of definition expands the definition of ability versus disability, many insurers will choose to end a claimant’s benefits when it takes effect. Before this happens, however, they will gather evidence to support their decision. This will include asking your healthcare practitioners, such as doctors, physiotherapists, and psychologists for information about your current condition and treatment. They may demand other assessments, including an independent medical examination, or IME as well. Your insurance company cannot simply end your long-term disability benefits without a good reason or supporting evidence.
Co-operating fully with such assessments is necessary to receive benefits. Your insurer will notify you in the event that they want you to return to work or cancel your benefits. That said, insurers cannot force you to go back to work before you are ready. You can tell them in writing that you will only return when you are medically able. Getting letters from your doctor and other health practitioners detailing their professional view of your condition can strengthen your position.
We advise you to carefully check your insurance policy, which will specify when the change of definition will occur, if applicable, and how it affects your coverage. Consulting a lawyer who deals with insurance and LTD claims may help you to understand the technicalities of your policy.
Not every insurance policy includes a change of definition clause. However, even if your plan does not include such a clause, you will most likely have to undergo regular medical examinations every year to determine your eligibility for benefits on an ongoing basis.
If you decide you are healthy enough to work and find a job, this does not necessarily end your benefits automatically. For example, if you work part-time and your new income is less than you were receiving from your insurance, then your LTD should top you up for the difference.
How will my fitness for “any” work be assessed?
To decide whether you can work in another job, insurance companies will test your vocational, or labour-related, skills. As noted above, insurers will also assess your medical condition, typically through an IME. Vocational assessors will look at your ability to function at other types of jobs in your current condition, accounting for any relevant disability.
An IME consists of an examination by a healthcare professional, typically a doctor. Although the insurer chooses this professional, usually it will be a third-party specialist who is supposed to provide an objective medical opinion. Tests might include lifting a certain weight or performing mental tasks, for example, as relevant to carrying out work duties.
It is a good idea to take notes on what occurs during the IME, what you talked about, and questions you were asked. Record the examining doctor’s name and consider asking for a copy of the IME report. It is possible that the conclusions of this assessment will differ from those of your own healthcare team and find that you are able to work. Access to the IME report allows you and your legal representative, if any, to find any weaknesses or points of dispute in it and prepare appropriate responses to them, such as testimony or a report from another doctor.
Even so, in all cases, we again advise co-operating with such assessments as much as possible. Any resistance on your part could be interpreted by your insurer as a breach of your insurance policy, which may be grounds for turning down or terminating your benefits. Should your claim eventually go before a court or arbitrator, they may make a similar call.
Will my benefits be affected if I am terminated by my employer?
It is possible that your company will terminate your employment while you are still on LTD. This can add to an already stressful situation and create uncertainty if you are later found to be capable of working again. Remember, depending on when you are terminated, the change of definition may have come into effect or will soon, potentially affecting your future eligibility for benefits if you do not pass the “any occupation test”, which is broader than the “own occupation test”.
On the upside, if you had been working when your disability began, you can generally expect to keep receiving benefits without interruption should you lose your job later, notwithstanding the change in definition. Any severance pay you receive may be deducted from your benefit payments. If you were on short-term disability when you lost your job, the situation will likely be more complex. You may wish to speak to a lawyer or insurer to find out more about how your coverage could be affected.
Can my insurance company cut off my benefits after two years?
Assuming that your insurer has found you to be unable to perform the work duties you had when you first submitted your LTD claim, you will typically be entitled to benefits. As noted earlier, insurers will usually switch from applying the “own occupation test” to the “any occupation test” after about two years.
Your insurance company may indeed attempt to stop your benefits at that point, depending on the opinions of your own healthcare providers, IME reports, tests of your current labour skills, and any other medical assessments they have ordered. Even so, they must provide solid support for terminating benefits or else they cannot cut you off.
We do not advise returning to work, either in an old occupation or new, unless you truly feel ready and regardless of pressure from your insurer to do so. This could not only affect your health negatively but may later undermine your claim, for example if your insurer argues that you contributed to your own disability this way.
Contact us to see how our lawyers can help you
Preszler Injury Lawyers has navigated the LTD dispute process with thousands of clients and look forward to serving you as well. Our team well understands the potential reasons for insurance companies may find to end your benefits, including the change of definition, in addition to their common tactics. By handling all correspondence with the insurance company, including any negotiations, we can help you resist being pressured to return to work too soon, secure fair compensation, and advocate for you in a cool-headed, professional manner.
Contact our long-term disability lawyers today for a free initial consultation and let us help.
*Please note the content in this article is only intended to be a general overview on this topic and not intended to be taken as legal advice. Please speak with a long-term disability lawyer for specific legal advice as each situation is unique.