long term disability for law clerks by brad moscato and wendy betteley

LTD for Law Clerks

Brad Moscato & Wendy BetteleyJune 8, 2016

Connection issues? Contact OTLA: 905 639 6852

DISABILITY POLICIES


Connection issues? Contact OTLA: 905 639 6852www.hshlawyers.com

What is disability insurance? Short term disability (STD) and long term disability

(LTD) insurance benefits are intended to replace a portion of a person’s salary during the period of time that they are unable to work due to an illness or injury (a total disability).

Benefits should be paid until such time as a person is no longer totally disabled pursuant to the policy and is able to return to work (typically to the age of 65).


Group Policies v. Individual Policies Group STD and LTD Policies are sold to companies for

the benefit of their employees. Some are taxable benefits (100% of the premiums paid by the employer) and some are non-taxable benefits (100% of the premiums paid by the employee).

Individual Disability Policies are purchased by individuals to protect their income and lifestyle in case they become disabled (these are non-taxable benefits as the individual pays the premiums).


Short Term Disability Benefits Short Term Disability (“STD”) Benefits

– STD benefits cover a short period of time (usually under 6 months) in which an insured is paid a disability benefit. In the LTD Policy, this time frame is usually called the Elimination Period.

– There is usually a “waiting period” before STD benefits are payable which can be from 3-7 days during which the disabled person can use sick days or vacation days for pay.

– STD benefits can be paid by the employer and administered by an insurance company. This arrangement is called ASO (administrative services only) performed by the insurance company.

If there are signs of bad faith on the administration of the file by the insurer, you should keep them in the litigation (despite them not having any liability to pay benefits) to claim for these damages


Long Term Disability Benefits

Long Term Disability (“LTD”) Benefits

– pay a portion of a person’s lost income if he or she becomes totally disabled pursuant to the Policy from being able to continue to work.

– are typically administered and paid for by the insurance company.


Qualifying for disability benefits To qualify for short term and/or long term disability

benefits a person must be:– An eligible covered employee under a plan/policy.– Meet the definition of total disability in his or her group or

individual insurance policy.– For STD benefits, they must complete the Waiting Period

(usually anywhere from 3-7 days).– For LTD benefits, they must complete the Elimination Period

(sometimes known as the STD period).


Waiting/Elimination Period This is the period of time that needs to pass before an

insured person is eligible for disability benefits. A Short Term Disability Plan/Policy generally has a

very short waiting period (approx. 3-7 days). For LTD benefits, a person usually needs to be off

work for several months before he or she can access LTD coverage (usually 3-6 months). – The Elimination Period in the LTD Policy is typically the same

duration that the STD benefits are payable.


Duration and amounts payable Plans generally last until the person is 65 years old. Some plans, however, have a limited time frame,

such as 5 years or 10 years. LTD benefits can cover approximately 50 per cent to

80 per cent of the person’s pre-disability salary, with a typical policy covering 66.67 per cent.

Some plans have monthly maximums which may cap the actual amount a person receives.


The “OWN OCC” test Generally, most policies state that a person is entitled

to LTD benefits (after the Elimination Period) for the first 24 months if the person cannot perform the essential duties of his or her own occupation.

This is the “Own Occupation Test.”


The “ANY OCC” Test After the 24-month period, the test usually changes

to whether the person is able to perform “any occupation” for which he or she is reasonably qualified by education, training or experience.

This is the “Any Occupation Test.”


The “OWN OCC” and “Any OCC” tests It is important to note, however that not all policies

are set up in this fashion. Some policies start off with the Any Occupation Test and continue in that fashion to age 65. The definition for Total Disability in the Policy will indicate this.


Exclusions There are numerous exclusions contained in policies.

Common exclusions include:– injuries from war, insurrection or rioting.– self-inflicted injuries or attempted suicides.– workplace injuries that can be made under a WSIB claim.– if the disability is a pre-existing condition (this is usually just

if the person becomes totally disabled in the first year of employment and/or effective date of insurance).


Offsets Offsets against the LTD benefits include:

– CPP Disability benefits.– WSIB benefits.– Any income from any source.

ODSP benefits have to be paid back by any LTD benefit that gets recovered.

CPP DisabilityA Common Offset to Disability Benefits



CPP disability benefits The Government of Canada pays a disability benefit

to individuals who have made contributions to the Canada Pension Plan (CPP) and who have suffered a disability which leaves them unable to work.

There are timelines for an employee to apply for CPP Disability. They must have made contributions to CPP for at least four of the previous six years before they apply OR three of the previous six years if they worked for 25 years or more.

CPP Disability benefits are typically an offset to LTD benefits.


CPP disability benefits (continued) The test for CPP Disability benefits requires the

disabled person to have a condition that is a “Severe and prolonged; mental or physical disability.” If an illness will result in death, the CPP Disability benefit will be approved at the outset (i.e., ALS, some heart conditions, terminal cancer, etc.)

If the CPP Disability application is denied, some policies may require that the insured has to appeal the decision through all levels of appeal.

Types of Disabilities and The Challenges they face in getting approved



Types of Disabilities Sickness, Disease or Injury. Fibromyalgia, Chronic Fatigue and Chronic Pain

Syndromes. Psychiatric Illnesses. Brain Injuries/Cognitive Impairments. Orthopedic Injuries or Degenerative Diseases. Alcohol & Drug Addiction (while in a medically

approved treatment program).


Challenges of Getting Disabilities Approved Often times an insurer will press for objective

medical evidence. However, sometimes there is no “objective” evidence where chronic pain, fibromyalgia, depression, anxiety and other psychiatric illnesses are involved.

This is typically seen as bad faith if they deny the claim based on there not being any objective evidence but the treatment providers are supporting your client’s inability to work.


Challenges of Getting Disabilities Approved An insurer may also see, in the first year of the

person’s employment, that one of the diagnoses on the Attending Physician Statement is a pre-existing condition.

They may deny the claim for this reason. However, if it can be proved that the other

condition(s) is(are) disabling on its(their) own, such a denial would be in bad faith, especially if the insurer did not pursue information on the other diagnose(s) and focused solely on the pre-existing one.


Challenges of Getting Disabilities Approved Surveillance may also be conducted and based on a few

hours of observation, the insurer may deny benefits. Surveillance can often easily be disregarded in the

litigation. For example:– Surveillance showing that someone can be active for a few

hours in a day does not prove that person would not be incapacitated for the rest of the day or that he/she is able to work full time on a regular basis.

– Surveillance showing that a person is smiling when they suffer from depression does not give any evidence whether that person also cries throughout the day or has other limitations like decreased focus, short term memory, attention or motivation. Smiling does not prove someone is not depressed.

DENIAL OF STD AND/OR LTD BENEFITS



Denials Many denials are claimed to be in relation to:

– Insufficient or lack of medical evidence.– Subjective complaints.– Lack of objective medical evidence.– A different opinion from the internal medical consultant than

that of the treatment provider.– Surveillance.

AFTER THE DENIAL / TORT LITIGATION



Notice Letter The notice letter to the insurer can include a request

for reinstatement of benefits, failing which litigation will ensue.

A request for reinstatement can include the following information: – Test results (blood work, x-rays, CT scans, psychological

testing, etc.)– Family doctor’s notes and reporting letter.– Specialists’ consultation reports.– Hospital admission / discharge summaries, and operative

reports. A paragraph about how you would pursue aggravated

damages in the litigation can also be included.


Commencing the Litigation Once the insurer notifies you of whether they will be

reinstating, the Statement of Claim (if benefits are not reinstated) should be filed as soon as possible.

Your Statement of Claim should include all of the provisions of the policy upon which you will be relying


Prepping your File for Mediation Ensure you request all of the medical documents from

at least one year prior to the disability as soon as the litigation commences

Request the Policy and the STD/LTD files from the insurer– Some Policies have to be requested through the Employer.

If this is the case, the insurer will provide details on how to obtain the Policy.

Obtain reporting letters from doctors that are supportive of your client’s condition and them being off work

Arrange for an independent medical examination of your client to support the claim

Prepare your Mediation Memo


How to identify bad faith in a disability file Common examples of bad faith include:

– The claims manager not obtaining an internal medical opinion before denying benefits.

– The claims manager not following through with recommendations made on the file by a supervisor, rehab specialist, or internal medical consultant.

– Apologies made by the claims manager to the Employer for not being able to provide a better result while approving benefits.

– The claims manager not recognizing certain conditions by insisting on objective medical information when there is none due to the nature of the disability (fibromyalgia, chronic pain, chronic fatigue, depression, anxiety, etc.)


Thank you for your time. For more information:

www.hshlawyers.com

Brad Moscato, Partner

(416) [email protected]

Wendy Betteley, Law Clerk

(416) [email protected]

mailto:[email protected]

mailto:[email protected]

long term disability for law clerks by brad moscato and wendy betteley

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