Long Term Implications of Long Term Disability

What should you be thinking about if your employee has a Long Term Disability (LTD)? And, more importantly, what should you be thinking about before they reach the transition from a short term to a long term disability?


Most insured plans today tailor their LTD programs to coincide with the federal programs for EI and CPP sickness/disability benefits. Once an employee has been unable to work for 17 weeks they would transition from a short term to a long term disability.


As soon as you are aware of a possible long term disability case then you need to do some planning in advance. Here are some points to consider:


·         Is the employee able to assist in the application process or is another family member or other representative designated as your primary contact. Who do you have permission to talk to? Never assume, get an authorization in writing if you are not dealing directly with the employee.


·         Before the 17 week point, ensure that the employee or representative has all the applicable claim forms and that they understand the process and procedures that will be occurring.


·         As part of an insured LTD plan, an insurer will assign a disability case worker/adjudicator and/or rehabilitation specialist or combination of all 3. Ensure that as an employer you coordinate fully with these individuals to assist the employee. Liaison is critical between the employer, employee and insurer. If you are managing multiple LTD claims you may want to write formal processes.


·         Will health and dental benefits continue? If so, who will be responsible for payment of the premiums? Will the coverage be the same? Will there be any adjustments for cost of living? If the employee will be contributing how will payments be collected? Ensure that the employee is 100% clear – putting this information in writing is very important.


·         If health and dental benefits are continuing at what point will this cease? Most plans allow for a review of an LTD case at the 2 year mark often coinciding with their own occupation definition. At this point there will often be a determination if the disability is permanent and whether the employee is likely to return to work. If the employee is unlikely to return to work you will need to determine if the employee still qualifies for coverage under the contract. There maybe written requirements in contracts/policies or in union agreements as to how benefits are handled in LTD situations – ensure that you check. If nothing has been written and you are in new territory then remember any decisions you make about benefits continuation due to permanent disability will set a precedent.


·         Once an employee moves into a long term disability scenario it is important to maintain contact. It is a good idea to assign a supervisor or manager with the task of maintaining contact – be specific and set up some time line expectations. From a planning point of view an employer will need to know if and when the employee is likely to return. Beware of hiring a permanent replacement as those employees that seem unlikely to return often do!


Disability management is a very complex subject and each scenario may need to be handled slightly differently due to the nature of each illness. The above list is just a few ideas to get you thinking! Ensure that you utilize all resources for support and information, especially your insurer. Remember, careful consideration of all possible outcomes is crucial for effective management of disability situations.



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