Short-Term Disability (STD) and Long-Term Disability (LTD) insurance are programs that replace a portion of, or in some cases all of your, lost wages when you become disabled from work. Generally, employees and employers contribute to these plans jointly and are part of an employee’s benefits package. Short-term and Long-Term Disability plans are not straight forward and vary from plan to plan. This can become frustrating for the insured who is now injured, unable to work, and trying to navigate a complex insurance policy. Insurance companies often make it difficult to access or maintain these benefits that you’re owed. In many cases, valid claims are rejected leaving someone unable to return to work, and without any replacement income. Wagner’s can help you navigate your claim and appeal your denial, and if required, start a lawsuit. A denial can leave you and your family emotionally and financially devastated. Wagners Law Firm works on a contingency fee model, meaning we pay all the up-front costs to fight your appeal and if we are unable to help, you don’t pay any fees. Our LTD lawyers have the skill and knowledge to present your LTD claim efficiently and effectively and we’ll work hard to get you the compensation you deserve.
What is Short-Term Disability Insurance and “Your Occupation”?
Short Term Disability Insurance is a type of disability benefits that provides income replacement in case a person is unable to work for a short period of time due to injury, illness, or hospitalization. In Canada average STD policy lasts from 3 to 6 months, some may last up to 2 years depending on a policy.
Disability is defined as the inability to do the substantial duties of your own occupation, as opposed to all occupations, and will entitle you to Short-Term Disability. However, some policies may require that you first exhaust any sick days you are entitled to and/or Employment Insurance Sickness Benefits (55% of your gross insurable earnings). If your employer has a short-term disability plan, your claim must be made through your disability plan. According to Financial Consumer Agency of Canada, employers aren’t required to provide paid sick leave and each employer is different.
What is Long-Term Disability Insurance and “Any Occupation”?
Most LTD benefits in Canada will cover up to 60%-70% of your official income, although each insurance policy is different. Usually LTD benefits last up to 2 years, after that you may continue receiving them only if you are disabled from all occupations, taking into account your age, education, and experience.
Generally, once the Short-Term Disability period ends you maybe entitled to Long-Term Disability. Depending on your policy, Long-Term Disability may provide more or less wage indemnification than Short-Term Disability, but generally the payments increase. Notably, the transition from Short-Term Disability to Long-Term Disability is when insurers will deny your claim. Even if you have documentation from your physician, stating you are disabled from all occupations, insurers may still dispute your disability and entitlement to Long-Term Disability.
Proof Of Disability
The Insurer will not just blindly approve your claim, they put pressure on the insured to provide all the documents necessary to prove the veracity of their disability. Even after disability is proven, the insurer will need additional information to understand the extent of the disability. The process of proving disability often includes your doctor or one or more medical specialists depending on your disability. It is important to submit all medical records illustrating your treatment and disability to the insurer within the correct time frames. Even after your benefits are approved, the insurance company will continue to monitor your medical condition to ensure there’s still ongoing proof of disability. This includes calling you for updates or requesting a medical review from time to time. This is most prevalent when you are younger or if the insurer expects your medical condition to improve over time
Some conditions (ex. Post-Traumatic Stress Disorder (PTSD), Multiple Sclerosis (MS), Chronic Pain, Depression, Anxiety, fibromyalgia, or migraines) often cannot be proven or be fully proven by “objective evidence”:
- X-ray test results
- MRI test results
- CT scans
- Blood panels
- Nerve testing
- Clinical notes from physician
These conditions are largely diagnosed on the subjective complaints and observations of the insured. Insurers will often deny claims on the basis they have not been provided “objective evidence” of your disability. This is an often used tactic by insurers to deny claims. Notably, there is no requirement that an insurer requires objective evidence to determine if an insured is disabled. In these scenarios, you should asked the insurer what type of “objective evidence” they are looking and then follow up with your medical providers to see if it is even possible to provide this evidence.. Often, in these types of scenarios credibility of the insured becomes more important. As these types of conditions are often based on self-reporting, insurers maybe be more likely to comb through your social media accounts or hire private investigators to surveil you
Effect of Other Disability Benefits on Short-Term and Long-Term Disability
Typically, Short-Term and Long-Term Disability policies provide “set offs” regarding entitlement to other disability programs, such as Canadian Pension Plan Disability or a Workers’ Compensation scheme. If you fail to apply for these benefits, the insurance company may estimate and deduct the benefit amount from your payment.
Limitation Period for Suing your Insurer
The limitation period is the time limit in which you must sue your insurer. Generally, provincial limitation periods are either one-year or a two-years. However, some policies provide for a longer limitation period than that set by provincial legislation. Insurance policies can only extend limitation periods—not shorten them. The question around what limitation period applies to your claim is further complicated by when this period starts. Generally, the limitation period will run when you first receive the first denial of benefits, even if the insurer gives you the opportunity to appeal their decision and/or submit further evidence. However, there are some scenarios where the limitation may not run until by the insurer’s actions and correspondence “clearly and unequivocally denie[s]” the claim. Knowing which limitation period applies to your claim and when the limitation period starts to run is key to suing your insurer.
What to do if you are Denied Short-Term or Long-Term Disability?
- If you have received a denial the first thing you should do is determine what limitation period applies to your claim, see the section on Limitations Periods above.
- The second thing is to assess in what manner to appeal the decision. Generally, you can either appeal the decision by using the internal appeal system of the insurer or appealing via a lawsuit. Notably, in some instance you may not be able to sue an insurer at all, this is often part of policies negotiated in collective agreements. In place of being able to sue it may be that the last level of appeal is to a tribunal.
- The third thing is to determine why the insurer denied your claim and what evidence is required to prove your disability. In some cases, you may need to hire a medical practitioner to review all your medical evidence and subjective complaints to provide an expert opinion. In other cases, your may need have a functional capacity evaluation conducted to objectively show your physical limitations.
Appealing a decision can be complicated, time consuming, and expensive. Appealing a decision is complicated by that fact you must determine which limitation period applies to your case and if you are able to sue your insurer. An appeal can be time consuming in that you may need to collect all relevant medical evidence or other objective evidence. An appeal can be expensive as generally you will have to pay for medical charts and, if needed, medical opinions (ex. Independent Medical Evaluation (IME) or Functional Capacity Evaluation (FCE). Wagner’s can help you navigate this complicated, time consuming, and expensive process. As with all claims we take on, Wagner’s will pay the up-front costs of your medical records, IMEs and FCEs.
Reinstatement of Benefits vs. Lump-Sum Payment
If you are successful in appealing a denial, often an insurer will issue you a retroactive payment (usually from the date of denial to re-instatement) and will thereafter provide monthly payments. In some instances, an insurer may propose a lump-sum payment of future benefit payments. In the case of long-term disability, generally this is because the insurer views you as being disabled from all occupations. This is an advantage to the insurer as they do not have to have an insurance adjuster constantly reviewing your claim. A lump-sum payment can also be advantage to the insured, as they no longer are required to communicate with the insurance company. Further this often brings a sense of closure and decrease in stress. The insured is then free to pursue a job or some other form of income generation without fear of reprisal by the insurance company. Lump-Sum payments in regard to future benefits are traditionally assessed on the basis of “present day value”: an amount of money if invested at a set rate will result in the total amount of future monies. Future-amounts that are settled in lump-sum payments are tax-free.
Sun Life Assurance Company of Canada, 2020 ONCA 11
 Kassburg v. Sun Life Assurance Company of Canada, 2014 ONCA 922
 Tsiaprailis v. R., 2005 SCC 8