A Closer Look at Three Important LTD Terms

There are many terms and provisions used in insurance policies that sound confusion and are difficult to interpret. When you are on claim (receiving benefits) and receive letters from your insurance company, you may see various terms used that you haven’t heard of, such as “total disability”, “own occupation”, “change of definition”, “gradual return to work plan”, “rehabilitation provision”, “offset” and “recurrent disability”. You may wonder how these terms apply to you.

This article will take a closer look at some of these terms to provide you with a better understanding of how they may apply to your claim.

This blog will explore:



• Gradual return to work plans and rehabilitation provision
• What an offset is
• How the recurrent disability provision works
  

Gradual Return to Work Plans and the Rehabilitation Provision

When you are initially approved for benefits and receive the approval letter, included in the letter is an overview of your plan’s “definition of disability” (the criteria you must met in order to be considered disabled under the policy). Group plans typically have 2 definitions, one for the own occupation period and one for the any occupation period.

​During the initial assessment period, the case manager (insurance adjuster) is considering whether or not you can perform the duties of your own occupation and as the any occupation nears, the test is whether you can perform the duties of an alternate occupation that you may be suited for by education, training or experience

The Rehabilitation Provision

You may be wondering what this provision means for you, what it involves and what your responsibilities as the “employee” are. You may also be wondering if you must participate in the arranged rehabilitation program.

While you are receiving benefits, your case manager periodically reviews your claim to determine if you continue to meet your policy’s definition of total disability. When considering these criteria, your ability to work is taken into consideration as it relates to your medical condition as well as what the expected recovery time is and if you have received/are receiving and participating in appropriate treatment.

The Role of the Rehabilitation Consultant

Often times when you have been in receipt of LTD benefits for a period of time, your case manager will request the involvement of a rehabilitation consultant/specialist to help prepare you for a gradual return to work or prepare you to work in an alternate position/occupation.

If your case manager assigns a rehabilitation consultant to your claim, it seems that your insurer feels it is an appropriate time to offer assistance with returning to either to your own occupation or an alternate occupation.

Whether the goal is to return you to your former employment or to help you prepare for a new occupation depends on how long benefits have been paid for or depends on the nature of your disability. The test for disability in the any occupation period is stricter and more difficult to meet. As mentioned, the case manager, in addition to medical information considers your level of education, type of training you have received while at your occupation and previous work experience.
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The rehabilitation consultant’s role is to determine what kind of gradual return to work plan is appropriate and what type of work hardening program or assessments, if appropriate, are necessary before this takes place. This occurs because your insurance company is trying to determine what your restrictions and limitations are.

How Does A Gradual Return to Work Plan Work?

​A gradual return to work plan could be, for example, 4 weeks to 8 weeks, or more. A gradual return to work plan means you return to work on a gradual basis, i.e. the 1st week you work 2 -3 days, maybe every other day, for 4 hours per day and you increase your hours and the number of days you work each week so that by the end of the program you have achieved full time hours and days. Your duties may have to be modified and the rehabilitation consultant is supposed to provide this information to your employer.

How Does My Insurance Company Know My Limitations and Restrictions?

What If I Can’t Participate?

If you try working and your symptoms are exacerbated, you should advise your doctor(s) of any new or worsening symptoms you are experiencing and advise your case manager and rehabilitation consultant. If you are unable to follow the plan, you will be advised by your case manager that you are responsible for submitting additional information that explains why you cannot continue working.

What If My Doctor Does Not Approve of the Plan?

If your doctor believes that it is too soon for you to return to work and that you cannot participate in the rehabilitation/gradual return to work plan, you are responsible for submitting additional information that explains your inability to work.

What Medical Evidence Is Required?

The type of evidence that your insurance company is looking for includes documentation (doctor’s records, specialist’s consultation reports, test results) that supports your symptoms, complications, treatment and other factor that contribute to a longer than expected recovery.
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If your pre-disability position was sedentary, and your disability is related to chronic pain or psychological illness (an “invisible illness”), it is important to demonstrate how your symptoms impact your function and activities of daily living, i.e. your ability to focus and concentrate, interact with others and the general public.

What is an Offset?

What does the term “offset” mean and how does it apply to your long-term disability claim?


You may not be aware that many insurance policies contain a provision that allows the insurer to reduce the amount of your monthly benefit if you receive benefits from certain sources (“offsets”). The sources referred to for the most part relate to income you would be receiving because of your current disability. 

Common offsets include:

• WSIB benefits (or a similar benefit)
• Canada Pension Plan (CPP) Disability Benefits
• A retirement or pension plan (including Canada Pension Plan)
• Earnings or payments from any employer (this includes severance payments and vacation pay)
• Income from self-employment

How It Works

In most policies, the insurer reduces your LTD benefit by the full amount being received from the other source. However, in some policies, the wording may be different and only allow the insurance to only deduct a certain percentage of your CPP Disability Benefit and not the entire benefit.

Here is an example:

• If you started receiving LTD benefits in January 2017 to date in the amount of $2000 and were approved for CPP Disability Benefits in May 2017 in the amount of $1000, your new benefit amount would be $1000.
• You would have to reimburse your insurance company for the period of time where you received both benefits without your LTD benefit being reduced (May to September 2017).

When the offset provision would not apply

​There are instances where certain benefits will not be deducted from your LTD benefit. For example, if you were receiving WSIB benefits for a disability from a different employer for a disability that happened before the start of the current disability claim with your current employer, it is not considered an offset. It should also be noted that some policies do not allow for your insurer to use the Child Benefit received from CPP Disability Benefits as an offset, while others do. It is important to review your policy wording to make sure your benefit is calculated properly.

Beware of the “Estimated” Offset

Your insurance policy may also contain language that says even if you do not apply for a benefit that you are eligible for (CPP Disability for example), the amount of the benefit will be estimated by the insurer and assumed to be paid.

Regarding Severance Packages

​If you are terminated from your position during your long-term disability claim or while on disability leave and receive a severance package, that money is considered to be an offset as it represents income. If you feel you were wrongfully dismissed or want to know if the severance package you are offered is fair, you should contact a lawyer to find out your rights and ask how your employment situation could potentially affect your long-term disability claim.

Why this Provision Exists

Ultimately, your insurance company is trying to prevent an “overpayment” situation and a situation where you would be “double dipping”, meaning that you should not be paid twice for the same period of time.

How Does a Recurrent Disability Provision Work

​If you returned to work full time after a gradual return to work program or on a trial basis and are unable to continue working, you may be wondering what your next steps should be.

Will you have to file a new short-term disability claim or long-term disability claim? Do you need to re-qualify for benefits and go through another waiting period?

This is where the recurrent disability provision comes in. If you are unable to work due to the same or a related disability, you can go back on claim through what is known as a recurrent disability provision.

The Purpose of the Provision

Under most policies, this provision allows you to return on claim if you become disabled again for the same or related disability within 6 months of returning to work.

The purpose of this provision is so that you would not have to satisfy another “elimination period” (waiting period). It is important to consider that some waiting periods can be as long as 6 months to 1 year.

What Do I Need to Know?

​If you are unable to work due to symptom exacerbation or a condition related to your previous disability, you need to advise your insurance company as soon as possible as there is a time limit to make a claim under a recurrent disability provision. For example, in most policies, it is 6
months.

If your disability recurs after a longer period, you would have to complete a new application and complete the waiting period.

It is important to note that your claim for recurrent disability still requires you to provide medical evidence. You must show your insurance company that you have restrictions and limitations that affect your ability to work and are medically supported.

What Medical Documentation is Required?

What medical evidence do you have to provide?
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Your insurance company is looking for evidence that your recurrent disability is the same condition that took you off work before or that it is related to your previous condition.

It is advisable that you provide documents such as updated clinical notes and records from your doctors and specialists, new x-rays or MRIs, prescription printouts are examples of medical evidence you can provide.

Your insurance company is looking to understand why and how your condition prevents you from working and the restrictions and limitations it causes.

We hope that this article has provided you with helpful insights into long-term disability claims and how your claim is assessed closer to the change of definition.