As a law clerk, I often assess potential new clients’ cases to understand the situation, coverage, merit, and reasonable expectations of the value of the file. The goal is to understand if our firm is the right firm for the individual’s needs. I have prepared this post for new law clerks and lawyers outside of personal injury law to provide an understanding of the ways in which HSH assesses a case prior to taking it on. I have also kept in mind individuals who may be determining whether to take short term and/or long term leave so that they may gain insight into key elements of a long term disability file. Knowledge is power, but I would encourage the individual suffering from a disability to seek out a personal injury lawyer with strong expertise in long term disability benefit claims to help in navigating the waters after receipt of a denial of benefits.
Let’s get started, the first and most important element to remember about an LTD disability claim is the Policy itself. This is the handbook setting out the rules, parameters and definitions of all of the aspects of the disability benefit. Some key pieces to identify immediately are: the definition of disability which will also outline whether the benefits are for “own occupation” or “any occupation” or a combination of the two; the duration of benefits (typically to age 65); the benefit amount/rate; and exclusions or pre-existing issues that may apply.
Definition of Disability: “Own Occupation” vs. “Any Occupation”
The definition of disability in the Policy will outline the test for disability. That is, what is required to be considered disabled and how long it could affect your ability to do your own occupation or any other occupation that you may be able to do pursuant to your education, training and experience. It’s important to note that with the “any occupation” test, insurers often become more aggressive to prove that a claimant is not disabled under the new definition.
Remember also that the insurer cannot tell an IT professional, for example, they must now serve food at a fast food restaurant or even become a receptionist. The work within the “any occupation” test must fall within the parameters of the client’s education, training and experience. It would not be unreasonable for the insurer to expect a construction worker to become a dispatcher, if s/he could no longer complete tasks involved with the heavier work. Usually, the Policy will also set out a test for “gainful occupation” or the “any occupation.” This will identify the percentage of wages from the “own occupation” work that is reasonably expected for the “any occupation” work. For instance, the Policy may state the “any occupation” work must pay at least 66.67% of the injured individual’s pre-disability salary to qualify.
Duration of Benefits: Time Limit on Benefits
The duration of benefits is also important. Let’s suppose the potential client is 62 and the benefits are paid to 65, (i.e. a “capped claim”). Since there are only three years remaining these files are usually settled by the insurer’s counsel over the phone or through mediation. Similarly, if the claimant has been receiving benefits for four years and their policy only covers them for a five year period, you may only be fighting for one year of benefits and it may be more cost-effective for the individual to resolve the matter through other mediums. Many Policies will go to the age of 65 but there are some that will have a time limit on benefits such as five or ten years.
Benefit Amount/Rate: Value of a File
The benefit amount/rate will assist you in understanding the value of a claim and help manage expectations of settlement amounts. Review the Policy to understand if there is a cap (or maximum) on an LTD benefit. For instance, let’s say someone makes $3,000 per month and the benefit amount is 66.67% of the person’s pre-disability salary with a cap (or maximum) monthly payment of $1,500. At first look, the maximum benefit appears to be $2,000 (or two-thirds of $3,000), however, taking into account the cap (or maximum) leaves the maximum benefit of $1,500. This seemingly small detail can make a great impact when discussing settlement.
Exclusions: Are They Even Eligible?
Exclusions usually involve very rare circumstances such as: war, insurrection, rioting, being injured while committing a criminal act, being injured while imprisoned (even if just for the weekend in a drunk tank). However, some policies also disallow any disabilities related to addictions (alcohol or drugs) especially if the person is not participating in a medically-approved treatment plan for their addiction.
“Pre-Existing” Clause: First Year of Employment
A “pre-existing” clause in a Policy usually applies only when an individual becomes disabled within the first year of employment.
Many Policies have this clause in place to prevent individuals already receiving treatment for an illness or disability from obtaining employment and filing a disability claim shortly after starting employment. If a person becomes disabled within the first year of employment and the medical records for the year prior to employment show that s/he was either treated or reviewed for the same or similar illness during that timeframe, disability benefits may not be eligible due to the “pre-existing” condition clause.
Assessing short or long-term disability files helps us to determine if we, as a firm, are best-placed to help a potential client. If you are a law clerk or a lawyer referring a potential client or an individual who is doing research about whether to file a claim, please be sure to seek out some professional advice before making any major decisions or commitments. Reputable personal injury firms want to ensure the best possible match between a client and legal representative for this extremely important type of case.
Law Clerk, Wendy Betteley and HSH Partner, Brad Moscato recently presented on this topic on an OTLA Webinar for Law Clerks on Long Term Disability issues. View their presentation below.
For more information on long term disability benefits or if you were denied coverage, please contact Wendy Betteley a 416-646-3334, email at firstname.lastname@example.org or Brad Moscato at 416-646-7655, email at email@example.com.