Long Term Disability for Law Clerks by Brad Moscato and Wendy Betteley

LTD for Law Clerks
Brad Moscato &Wendy Betteley
June 8, 2016
Connection issues? Contact OTLA: 905 639 6852

DISABILITY POLICIES

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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).

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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).

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ShortTerm Disability Benefits
 ShortTerm 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 calledASO (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

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LongTerm Disability Benefits
 LongTerm 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.

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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 theWaiting Period (usually
anywhere from 3-7 days).
– For LTD benefits, they must complete the Elimination Period (sometimes
known as the STD period).

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Waiting/Elimination Period
 This is the period of time that needs to pass before an insured
person is eligible for disability benefits.
 A ShortTerm 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.

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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.

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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 OccupationTest.”

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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 OccupationTest.”

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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 OccupationTest
and continue in that fashion to age 65. The definition forTotal
Disability in the Policy will indicate this.

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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 aWSIB 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).

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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 Disability
A Common Offset to Disability Benefits

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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 forCPP 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.

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CPP disability benefits (continued)
 The test forCPP 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 andThe Challenges
they face in getting approved

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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).

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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.

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 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.

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 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

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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.

AFTERTHE DENIAL /TORT LITIGATION

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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.

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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

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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

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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) 646-7655
bmoscato@hshlawyers.com
Wendy Betteley, Law Clerk
(416) 646.3334
wbetteley@hshlawyers.com

Long Term Disability for Law Clerks by Brad Moscato and Wendy Betteley

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Long Term Disability for Law Clerks by Brad Moscato and Wendy Betteley