Long Term Disability – Supporting Employees Through the Change of Definition

Mar 04, 2013

One of the most significant events for all stakeholders in a Long-Term Disability (LTD) claim is the transition from “Own Occupation” definition of disability to “Any Occupation.”  This is commonly called ‘change of definition’ and typically occurs after 24 months of LTD benefits.  The criteria to qualify for ongoing disability benefits changes from an individual being disabled from the duties of their own occupation to being disabled from performing the duties of any occupation for which they are reasonably suited by their education, training, and experience.

Under this stricter definition of disability, the insurance provider conducts a very thorough and detailed assessment which typically requires several months of review by Case Managers, Disability Specialists, medical consultants, and other experts.  The review includes all available medical information, specialist reports and consultations, a detailed telephone interview with the plan member in most cases, and an evaluation of an employee’s education training and experience relative to their restrictions and limitations.  There are other non-medical factors taken into consideration as well, such as a concurrent application to CPP Disability benefits, etc.

Considerations before approval of benefits in the “any occupation” definition of disability include:

  • Does the employee have the ability to perform other work that they are suited for by way of education, training, and experience and that is commensurate to their current earnings?
  • Is it possible to re-train the employee for a new role with their current employer?
  • Are there workplace accommodations that can address the limitations that the employee may have?
  • Is re-training for a role at a different company feasible?
  • Is the disability total and permanent?

This process can be a confusing and stressful event for the disabled employee, and there are several ways a Plan Sponsor can support them and make the transition easier.

First and foremost, it is highly recommended that companies have a policy in place on how they deal with disabled employees, particularly at the change of definition.  How long does the disabled individual remain an employee?  Do they stay on the benefits program indefinitely?  Are they considered an employee until retirement?  Does the company policy comply with labour standards and human rights legislation?  Is there a formal process in place to assist them in returning to work or making accommodations for their restrictions / limitations?  These are just a few examples of the many important and complex questions that Plan Sponsors may wish to address through company policy so they can communicate clearly to establish expectations to all employees prior to an LTD claim occurring.

Secondly, Plan Sponsors can encourage the disabled employee to ask their doctor to provide all relevant information to the insurance company.  The disabled employee having this conversation with their doctor up front can potentially avoid several months of back and forth communication between the employee’s doctor and the insurance company.

Finally, Plan Sponsors can contact their Benefits Consultant who should be able to liaise with the insurance company and provide Plan Sponsors with more specific advice related to their particular situation.

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