Group LTD Policies vs. Occupational LTD Policies: What’s the Difference?

​If you work for an employer that provides group benefits, you may have long-term disability (LTD) benefits as part of your benefits package. Some employers also have an additional LTD policy to cover workplace illnesses/injuries, called an occupational long-term disability policy.

There are some similarities and differences between occupational policies and group policies.

This blog will cover the following:

• What is an occupational LTD policy?
• What are the similarities between a group LTD policy and an occupational LTD policy?
• What are the differences between the two types of policies?
• What do I need to know about making a long-term disability claim?

What is an occupational long-term disability policy?

In Ontario, employers in certain industries are required to have coverage under a workers’ compensation plan (e.g. WSIB). There are some companies (e.g. banks) that have an occupational long-term policy in place to cover workplace illnesses and injuries that may have ordinarily been covered under a provincial workers’ compensation benefits.

An occupational policy is used for mental or physical illnesses or injuries that are specifically related to the workplace.

The Similarities

Definition of total disability

Both types of policies have a definition of disability you must meet to qualify for benefits.

Own Occupation vs. Any Occupation

Both policies usually have 2 different definitions of disability, an “own occupation” definition which concerns your ability to perform the essential duties of your occupation and an “any occupation” definition which concerns your ability to work in an alternate occupation for which you are qualified by way or education, training or experience.

Waiting Period

Under any LTD policy, you must endure a “waiting period” or “elimination period” before benefits can be paid to you. An elimination period can be anywhere from 15 weeks to 52 weeks.

Offsets

Both policies have offset provisions, meaning other types of benefits can be used to reduce your monthly LTD benefit amounts (i.e. Canada Pension Plan Disability Benefits).

Actively Working

Both types of policies require you to have been actively working and performing all your usual, expected duties for your scheduled shifts/days/hours at the time of the onset of disability (you need to be an “active” employee).

Appropriate Treatment

Both types of policies require you to be under reasonable treatment for your condition. This means you need to be seeing your doctor/specialist as often as is typically required for your condition.

Rehabilitation Clause

Both types of policies have a rehabilitation clause, which requires you to participate or make best efforts to participate in rehabilitation arranged by your insurer (i.e. a treatment program or a return to work program).

Your Responsibilities

Both policies set out certain responsibilities for the insured person including the expectation that you will recover from your disability by participating in treatment/rehabilitation, try modified duties, obtain retraining, apply for other benefits available from other sources such as Canada Pension Plan Disability Benefits.

The Differences

Benefit amount

The benefit amount under an occupational policy is usually a higher percentage of your monthly income as it is comparable to the provincial workers’ compensation benefit amount, which in Ontario is 85% of your monthly earnings.

Definition of Disability

The criteria for the definition of total disability under own occupation differs. Under an occupational policy, you must be unable to work due to an illness or injury arising out of and in the course of your employment. Some policies may indicate that you must be unable to do any occupation within the company you work for, that you are or may be reasonably qualified for that would equal 100% of your pre-disability income.

Own Occupation vs. Any Occupation Period

The own occupation period may be longer under this type of policy and may be a stricter definition.

Coverage under the Group Policy

To be eligible for benefits under this policy, you must provide acceptable evidence that you became totally disabled due to an occupational illness while covered under the group policy, and as with under the group policy, you have to show that your disability continued past the waiting period and you are seeking appropriate treatment etc.

Taxability

There could be a difference in taxable status, for example, you may pay the premiums for your group policy, meaning your benefit is not taxable, and your employer pays the premiums for the occupational policy, making the benefit taxable.

What do I need to know when making a claim?

If you have coverage under both a group LTD policy and occupational LTD policy, it is important that you obtain a copy of both policies, so you can understand what type of benefit you are entitled to.

Here are some things to take into consideration:

• If you were injured at work or developed an illness, such as anxiety or depression, you need to demonstrate when the onset of the illness/injury was and how it relates to the workplace.
• You should find out if there is an incident report or any written evidence to support your claim. If there is, you should obtain a copy and keep it for your records. Your insurance company may request it from your employer or your employer may be providing it with the employer statement/plan sponsor statement, so it is important you know what information it contains.
• Provide doctor’s notes or reports that speak to your symptoms and functional difficulties. Make sure you are seeking regular and appropriate treatment, so your doctor/specialist can properly document all your symptoms and your progress/regression. It is important that the medical information shows you sought treatment as soon as the illness or injury occurred.
• In your application for LTD benefits, explain the events that led to you going off work in detail and how these events led you to develop your current symptoms and functional limitations. Provide as much detail as possible so that the claims adjudicator understands why and how your disability is workplace related. This is particularly important for illness claims for psychological conditions.
• When you have your initial telephone interview with the claims adjudicator, ask which policy your claim is being processed under and why.
• Know that you can fight the insurer’s decision to deny your benefit

How can a lawyer help me?

If your LTD claim is denied, either at the outset, or at any point in time, a lawyer can help you to fight the insurance company’s decision to deny/terminate benefits.

It is beneficial to seek the advice of a lawyer as a lawyer can:

• Explain the insurance policies to you so that you understand them.
• Help you to better understand why your claim was denied.
• Advise you what your rights and responsibilities are as an insured person.
• Explain the legal process to you.
• Can start a court action against the insurance company as soon as possible.