Written By: Camelia Amiri, Student-at-Law
Employers often have group insurance disability plans that provide their employees with replacement income in the event an employee is injured or suffers from an illness that prevents them from returning to their employment. These disability plans offer employees a portion of their income to offset financial hardship they may suffer as a result of being unable to work. The amount and length of coverage differs from one plan to the next.
Short-term disability benefits typically kick in when an employee has exhausted their sick days and requires financial assistance during their temporary recovery period. Short-term disability benefits are therefore by nature “short-term” benefits and are only available for an abridged amount of time. Most plans provide some form of income replacement (usually a percentage of an employee’s monthly earnings) for a period of 17 to 26 weeks (depending on the employer and the disability plan). Not all employers offer their employees with short-term disability benefits. In those cases, an employee is left to rely solely on sick days and Employment Insurance provided through the government.
Long-term disability benefits become available once short-term disability or Employment Insurance is no longer available. For example, most of long-term disability plans do not start paying long-term disability benefits until 120 days have elapsed from the date at which the employee left his or her employment.
Long-term disability benefit plans pay a percentage of an employee’s monthly earnings with a maximum amount payable per month. Often these plans provide coverage for up to two years where the employee is unable to perform his or her occupation. After that time, benefits are typically only provided if the employee is unable to perform any occupation for which he or she is reasonably suited to do by education, training, or experience.
Becoming eligible for long-term disability benefits after this two year period is therefore quite difficult, as the employee must establish that their disability prevents them from working at the level they once did. Insurance companies will usually require medical reports to demonstrate that there is an inability to resume work.
It is important to note that long-term disability benefits are usually offset by other benefits an individual may receive, such as CPP and WSIB benefits. In some cases, employers have policies that give the long-term disability insurer the power to force the insured to apply for benefits from another source.
When is it a Good Idea to Hire a Lawyer?
Deciding whether or not to retain a lawyer is often a difficult choice; however, this choice is often the most important decision an injured or ill employee will make. Negotiating directly with insurance companies often leaves an insured at a clear disadvantage. Insurers have years of experience and resources available to them that the insured quite simply does not. It is for this reason that consulting an experienced lawyer is very important. Most personal injury and disability lawyers work on a contingency fee basis, meaning that they collect their legal fees if they are successful in obtaining compensation for their client’s claim. An experienced lawyer will know how to maximize a client’s chances of being successful with his or her disability claim and will also know what steps to take in the event that benefits are denied.