A look at disability benefits
Reprinted from the "Income" issue of Visions Journal, 2011, 7 (2), p. 19
The inability to work can create personal financial hardship. Employers often provide their employees with some level of disability benefits that supplement other benefits that are available. These other benefits include, for example, government programs such as Employment Insurance and the Canada Pension Plan.
It is important for you to understand what benefits are available to you through your employer before you get ill. You also need to know what is expected of you while you are on disability.
Types of disability benefits
Benefits that are available to workers vary from one employer to another, but we can make some broad observations.
There are three types of disability benefits:
Sick days–coverage for three to seven days per year for occasional absences
Short-term disability–coverage begins after an initial waiting period of one to two weeks, and typically lasts for 17 to 52 weeks
Long-term disability–coverage for periods beyond the short-term disability period, typically until an individual returns to work, reaches age 65 or no longer meets the definition of disability as per the benefit plan
These disability benefit payments are based on regular pay and are ordinarily reduced over time. For example, sick days are often paid at 100%, short-term disability payments may range from 60% to 100% of regular pay, and long-term disability may range from 50% to 70% of regular pay.
The actual amount of disability payment received may also vary due to whether or not the benefits are taxable. Where an employee pays for 100% of the disability plan’s premiums, the benefit payments would not be taxed. On the other hand, if the employer pays for any portion of the disability premiums, then the payments would be taxed.
Filling out forms, making a claim
First, you will be asked to provide medical information to prove that you are disabled. Being disabled means your physical or mental condition stops you from performing most of the tasks of your job.
To prove you are disabled, you must get a form filled out by your doctor. This form is available from your employer or insurance company. It is important that your doctor completes the form correctly and in its entirety for you to be eligible to receive your payments. The information provided by your doctor is used to determine if your condition is a medical illness covered under your benefits plan.
You will also need to sign a consent form. By signing this form, you allow your doctor to share any of your medical information that is needed by your employer or the insurance company.
You are responsible for ensuring that your forms are properly filled out and sent to the right address. This is called “making a claim.” Any delay in making your claim will delay the payment of your claim.
Failure to fulfill any of the requests made of you during periods of disability can result in delayed access to the benefits you are entitled to and the income replacement you rely on.
What happens after you send in your forms?
The information is reviewed and your claim will be either accepted, denied, or in some cases classified as pending. “Pending” means that more information is needed. You or your doctor will be required to provide this information within a specified time frame. If your employer or insurance company doesn’t receive the information within the specified time frame, your claim could be denied.
Claims can be denied for several reasons, such as lack of information, incomplete information, or unclear diagnosis and improper treatment according to the insurer’s standards. Diagnosing mental health can be difficult and complex, but insurers have guidelines to follow. If the case manager is not sure, he or she can get help from a consulting psychiatrist.
If your claim is denied, you won’t receive any payments and will be expected to return to work. So you may need to discuss options with your employer. If you have a union representative at work, you can request help and support while trying to come to an understanding with your employer. If you and your employer agree that you are unable to work due to your condition, there may or may not be some options available to you such as a leave of absence. There is no one way to accommodate ill employees, as each workplace is different.
If your claim is denied, you have the right to appeal the decision. There will be an appeal process in place, and it is important that you have a good understanding of the process and what is expected of you.
Don’t hesitate to ask your employer or insurance company about what you must do to prove your absence is medically justified.
Ombudservice for Health & Life Insurance (OHLI): www.oapcanada.ca
OLHI is a not-for-profit, independent complaint resolution and information service for consumers of Canadian life and health insurance products and services.
Claims management and support during recovery
The purpose of claims management is not only to pay your claim, but also to support you during your recovery. You should expect calls from the insurer or someone in your workplace, such as the occupational health nurse or human resources representative. Their role is to make sure your absence continues to be justified and to follow your progress towards recovery. The frequency of these calls will vary according to your condition.
You might feel like this puts pressure on you, but you should try to view it as a good way for them to keep in touch with you so your payments won’t be stopped. If you are ill over a long period of time, you may find that different people will reach out to you. This is because case managers may get their workload changed due to the number of claims received.
By understanding your benefits and knowing what is expected of you, you should receive your income replacement and not need to worry during an already difficult time in your life.
About the authors
Diane and Dan are principals in the health and benefits business of Mercer, a company that provides human resources products and services
Diane is Leader of the Health and Productivity practice. She works with employers across Canada to help them gain and maintain a healthy workforce
Dan is a Senior Consultant. He assists employers in Western Canada to get the most value from their employee benefits programs
For more on Mercer, visit www.mercer.ca