Can Your Insurance Company Stop Your Disability Benefits at Any Time?

Once secured, disability benefits are the financial lifeline for many families, particularly if the disabled family member was the former breadwinner. While it is rare to receive complete replacement of lost income through a disability policy, even a substantial portion makes a huge difference in the financial health of many individuals. When disability payments start arriving, recipients come to rely on this money to make ends meet, but what happens when disability benefits stop? Does a recipient have any recourse? What are the possible reasons such an abrupt action would occur? The stoppage of disability payments is devastating for those affected, and should prompt the recipient to seek the advice and services of an experienced disability lawyer to determine if the reason behind the disability payments stopping is legitimate, as well as how to fight to have them reinstated.

Why Disability Benefits Stop

Insurance companies that offer long-term disability policies, most of which are group plans, can set their own rules and conditions related to the approval, retention, and termination of disability benefits. Some of the most common reasons disability payments stop include:

• The policy is cancelled;
• The recipient is no longer eligible to be in the group;
• The group is no longer covered;
• Employment ends, except in cases of temporary layoffs or a leave of absence;
• Failure to obtain treatment or follow a recommended rehabilitation plan;
• The recipient turns 65, though some companies will continue benefits until age 70.

Two of the most prevalent reasons disability payments stop is that the recipient is no longer considered disabled or has been terminated by his or her employer. Ideally, when a person experiences a disabling event, he or she will recover some degree of functionality through medical treatment, but the timeline for recovery and the degree to which a person may improve is case-specific. However, insurance companies, while being paid premiums to provide benefits, routinely look for reasons to cut them off, and not meeting the definition of disabled is one of the most direct methods of accomplishing this end.

Employers also have a vested interest in an employee’s disability, as they must continue to provide coverage and hold the position open. The definition of total disability, a prerequisite for long-term disability (LTD) coverage, often changes after the first two years, being fairly narrow in the beginning, and becoming broader afterwards. Once the coverage becomes broad, the chances of a recipient recovering to the point of returning to work diminish, and the employer may feel the employment arrangement is no longer tenable. However, the law protects disabled workers from termination upon this basis, and employers may be liable if they improperly terminate a disabled employee.

Ways to Fight Back

Responding to the stoppage of disability benefits will depend upon the reason listed by the insurance company for its action. If the basis is related to the existence of a disability, providing medical documentation of continued functional limitations is essential to regaining the right to disability benefits. If the reason is associated with termination, the process becomes more complicated. In Ontario, an employer is permitted to terminate a disabled employee, which disqualifies them for LTD benefits, if the employment relationship has become frustrated. To argue the employment contract has been frustrated, an employer must show it attempted to provide every possible accommodation for a return to work, and that medical evidence indicates working is no longer possible. An experienced disability lawyer will understand how to evaluate the legitimacy of such a claim and respond with contrary evidence.

Contact a Disability lawyer

Disability benefits are not optional for most recipients and their families. If your benefits were wrongfully stopped, speak with a knowledgeable disability lawyer about your right to reinstatement, and the potential to hold your employer directly liable for lost benefits. You deserve a favorable result and a disability lawyer is best equipped to protect your rights and ensure opportunities are not lost.