Long-term Disability Eligibility and Coverage under Employer Plans

If you are covered under a long-term disability insurance policy, and you become sick or injured and are no longer able to work, you may be eligible to collect long-term disability benefits.  Long-term disability benefits generally pay 50-80 per cent of a person’s monthly salary (prior to becoming disabled) up to a maximum amount (such as $100,000), but can also pay out a defined amount (for example, $3000), as specified in the plan.

A person or group, including self-employed persons, may obtain long-term disability coverage directly from an insurance provider or insurance broker, but many Ontarians are covered for long-term disability (LTD) benefits through their employer.  In the latter case, it’s not the employer who administers and pays out the disability benefits if you become disabled; rather, your disability benefits are administered and paid out by your employer’s disability insurance provider.  Further, it’s the insurance provider and not your employer who determines whether your illness or injury meets the eligibility requirements for disability benefits.

Depending on the contractual arrangement made between your employer and the insurance provider, your employer may pay the full amount of your disability insurance premiums, you may be required to pay all of the premiums, or you and your employer may share the cost of the premiums.  If your employer pays the full or partial cost of the premiums, you will be taxed on all or a portion of the payments when you are paid long-term disability benefits. 

To qualify for long-term disability (LTD) benefits within the first two years of becoming disabled, your symptoms must prevent you from being able to perform the essential or normal tasks of your job, and you must provide medical evidence with your LTD application.  Medical evidence typically includes assessments and opinion evidence (along with the results of any appropriate medical tests) from your treating physician indicating that you have been receiving care and treatment for your condition.  Your physician must also provide an explanation of how your symptoms prevent you from doing your job.

You cannot receive long-term disability benefits immediately after becoming disabled; you generally need to be disabled without interruption for at least 17 weeks before claiming benefits.  However, you may be able to claim short-term disability benefits during the initial period, if these benefits are provided under your plan.

To continue to qualify for LTD benefits after the two-year mark, your disability must prevent you from performing the normal or essential tasks of any occupation. At this point, your disability insurance provider will typically require you to provide medical evidence and/or undergo an in-depth assessment by an independent (or their) physician to verify that you meet the ‘any occupation’ criteria.

Long-term disability plans commonly specify that a person must be ‘totally disabled’ in order to qualify for benefits.  The concept of ‘total disability’ has been debated and clarified in civil trials in Ontario, and the courts have found that ‘total disability’ doesn’t require that a person is completely unable, physically, to perform any of the requirements of their occupation. Rather, ‘total disability’ is generally taken to mean that, with prudence and concern for the person’s health, the person’s disability or injuries reasonably require that they no longer work at their job in order for them to get well and prolong their life.

If you are unable to work and your disability benefits were denied, talk to a knowledgeable disability lawyer to find out if your rights were denied and what is involved in getting the disability benefits you are owed.