What If You Have a New Health Problem While on Disability?
Jan. 26, 2023
A long-term disability (LTD) policy is designed to help those who cannot continue their job duties because of a disability recover part of their normal salary. The replacement wage benefit generally ranges between 50 and 67 percent of the employee’s wages prior to the onset of the disability. Depending on the terms of the policy, the benefits will be paid so long as the disability prevents the policyholder from working. Some policies may even pay until the age of retirement, but others have limits based on age or a set time frame, say five or ten years.
Not every policy is the same. Insurers set their own terms, including the definition of a disability, the possible exclusion of certain pre-existing conditions, and the waiting period before benefits can kick in, which can range from 90 to 365 days. Also, there are two sources for LTD policies: employers and private insurance brokers.
About 40 percent of employers nationwide offer LTD coverage to their employees. The employer may pay part or, if you’re lucky, all of the premium. With a policy purchased independently, the employee is obviously responsible for the entire premium. Employer-sponsored LTD plans are governed by the Employee Retirement Income Security Act (ERISA), while private LTD policies are subject to state laws and regulations.
Who regulates your policy can make a big difference if you have to file an appeal or take the insurer to court. It can also make a difference in taxes owed on benefits. If your employer pays 50 percent of your premium, that means 50 percent of your benefits are taxable, for instance. If you pay it all with after-tax income, any benefits will be tax-free.
Say you’ve already made a claim for disability coverage and are at home recovering but you suddenly face another health crisis. How will this affect your current benefits? Can they be extended? A lot will depend on the nature of your previously claimed disability, when the accruing benefits might expire, and how disabling your new health crisis is.
If you’re on LTD disability in or around Minneapolis or St. Paul, Minnesota, and you face a troubling issue with your LTD policy, contact Beedem Law. Our long-term disability insurance attorneys will review your situation and advise you of the steps that need to be taken. They will also aggressively help you deal with the insurance company and their representatives. Beedem Law proudly serves clients in the counties of Hennepin, Ramsey, Dakota, and Anoka.
What Qualifies as a Disability?
If you do sign up for an LTD policy, you should be given what is called a Summary Plan Description (SPD), which will cover the basics of your coverage, including what’s considered a disability. You need to read the SPD carefully as well as the policy itself. The devil, as they say, is in the details.
Some policies exclude certain diseases or workplace accidents. Some won’t cover a disability based on a pre-existing condition until the policy has been in place for 12 months. For instance, if you are being treated for high blood pressure and you suffer a stroke or heart attack during the first year, your claim for disability benefits may be denied.
Generally speaking, however, most policies will cover cancer, autoimmune disorders, neurological disorders, mental illnesses, degenerative diseases, and other chronic conditions. Some policies, however, will limit benefits to 24 months for disabilities caused in part by alcoholism, drug abuse, or mental or nervous conditions.
What If a New Health Issue Arises?
Getting back to our earlier scenario of someone out on LTD benefits who suffers a new health condition, how indeed does that affect the ongoing receipt of that person’s benefits?
The answer here depends, once again, on the terms and conditions set forth in your LTD policy. If your first condition prevents you from ever working again, then the new condition should have little impact on your benefits. Even with two health conditions, the insurer isn’t going to pay you more.
However, some insurers have provisions regarding “own occupation” and “any occupation.” If the policy states that it will pay you so long as you can’t perform the duties of the job you left because of your disability – your “own occupation” – then your benefits will continue regardless of any new health challenges.
Some policies require that after a certain period – say 24 months – you should seek employment in “any occupation” for which your condition allows you. For instance, the insurer may tell a warehouse worker to go find a desk job if a disabling back condition prevents that person from performing warehousing duties.
In the “any occupation” situation, a new health condition that could prevent you from seeking even a less challenging job could be the key to prolonging your full benefits. You would need to alert your insurance company of the new condition. Depending on that company’s operating policies, you may need to refile your claim or file an appeal.
How an Attorney Can Help
If your new health condition does warrant a continuation of your benefits, you can be sure the insurer is going to challenge your claim. They will demand medical evidence, which they no doubt will have reviewed by their team of “independent” medical examiners. The answer may come back that your condition doesn’t qualify. They may also place surveillance on you and your activities to see exactly how the new condition is or isn’t limiting you.
In other words, you’ll probably need to fight the insurer every step of the way, and for that, you need the help of an experienced attorney who understands insurance company tricks and can stand up to the demands of the company's representatives. If you go it alone against the insurer and its complement of “experts,” you’ll be facing a tough challenge. Get the legal help you need.
Speak With Experienced, Knowledgeable Attorneys
We at Beedem Law have dealt with LTD insurers on just about every issue imaginable over our half-century of combined experience. If you’re facing an issue with your insurer, or you are facing a renewed health threat, contact us immediately. We will help you navigate the system and work with the insurance representatives to get the benefits you deserve. If warranted, we can launch an appeal or even a lawsuit.
Beedem Law proudly serves clients in and around Minneapolis and St. Paul. Reach out today for a free consultation.