Did you recently go on a sick leave from work? Did you apply for short-term disability insurance benefits only to have your claim denied? Are you unsure of what to do next?
If you answered yes to any of these questions, then this article is for you.
This article is part of our Ultimate Guide to Short-term Disability.
It goes something like this: You have been struggling at work due to illness or disability. You worked as long as you could, but have reached a crisis point. If you didn’t take a sick leave soon, you were headed for a breakdown. You got your doctor to fill out the paperwork for short-term disability benefits… but your claim was denied. You are stunned because you are 100% unable to work right now and have lost your income.
Each year, we speak with hundreds of people just like you. In this article, we answer the top seven questions people ask us when their short-term disability claim is denied.
1. What is my best chance of winning an appeal of my short-term disability denial?
Good information from a supportive doctor is the key to having your short-term disability claim approved. You need to get your doctor on your side (or get a new one) if he or she is unsupportive. You must make sure that your treatment follows the best practices. You must comply with all reasonable treatment recommendations. Refusing reasonable treatment will cause your claim to be denied. If your doctor is not recommending appropriate treatment, push for a referral to a specialist who can get the right plan in place and communicate it to the insurance company.
2. Can I apply for EI sickness payments if my short-term disability claim is denied?
Yes, you can apply for EI sickness payments if: (1) the insurance company declines your claim, or (2) you believe that there will be a delay in the approval of your short-term disability. Take note that you should send in your application immediately if your situation falls on the second case.
Service Canada will approve EI sickness payments based solely on the recommendation of your doctor. Unlike the insurance company, they will not question your doctor’s opinion that you need a sick leave from work. EI sickness payments are 55% of your pre-disability weekly income and will pay for 15 weeks. You will need to pay these back if your short-term disability is later approved.
3. Can my employer terminate my job if short-term disability is denied?
The answer depends on the reason for termination. In the short-term, your employer cannot legally terminate you because of your sickness or disability. But if your employer could prove that your termination had nothing to do with disability, then they can legally dismiss you, even if you are on sick leave.
Keep in mind that there is no guaranteed employment in Canada. All employers can dismiss an employee upon giving reasonable notice of termination, but there are some exceptions to this general rule. One exception is that an employer cannot dismiss an employee based on a discriminatory reason; disability falls under this category.
If your short-term disability is denied, the insurance company will inform your employer of this decision. Many employers will assume that this means you are fit for a return to work and will treat your failure to do so as unauthorized absenteeism. Therefore, it is critical that you provide new medical information to your employer confirming that, regardless of the insurance company’s decision, you continue to be unable to work due to disability. You must put your employer on notice of your continuing disability in order to trigger protection under anti-discrimination human rights laws.
4. Can the insurance company force me back to work after my short-term disability is denied?
No, not directly. Your employment is a matter between you and your employer. The insurance company has no legal authority to require you to work; it can only choose to pay or deny disability benefits.
The insurance company can rely on medical experts who say you are ready for a return to work or a graduated return to work, and it can stop your disability income payments if you refuse to do so. When they use this financial leverage over you, it is natural to feel like you are being forced to return to work before you are even ready. You are not legally required to return to work just because the insurance company says so. Yes, you will loose disability payments, but if they are saying you must return to work, then they are going to stop those payments anyway.
Nonetheless, you should always try to return to work when asked by the insurance company, unless your doctor has a strong opinion that it would cause you harm. It is better to show that you have tried even if you can only last a few days. The insurance company will seize on your refusal return to work as a proof that you “didn’t even try”. This powerful statement will make it harder for you to win your appeals. If you try to return to work and fail, then you take away their ability make this argument.
5. Can I apply for long-term disability benefits if my short-term disability was denied?
Yes, but most insurance companies will not let you. All long-term disability benefits have an initial waiting period. The waiting period means you must be continuously disabled for a certain minimum number of weeks before you can qualify for long-term disability benefits.
In most cases, the long-term disability waiting period will be between 17 to 52 weeks. When your short-term disability claim is denied, many employers or insurance companies will refuse to allow you to apply for long-term disability. They will say that because your short-term disability claim was denied, you were not continuously disabled for the required waiting period. This is hogwash. The insurance company’s wrongful decision to deny your short-term disability claim does not remove your contractual right to apply for long-term disability benefits.
Once you are nearing the end of the waiting period, you must request (in writing) the long-term disability forms from your employer or the insurance company. If your employer refuses, then it is important that you press the insurance company to give you the forms. If the insurance company refuses, you must get that refusal in writing by letter or email. By not giving you the forms to apply for long-term disability benefits, the insurance company is putting you into a trap. You may miss the deadline to apply for long-term disability benefits, and this will later allow them to deny your application on the grounds it is late. It also means you won’t have the right to file a lawsuit against the insurance company — technically, they did not deny your long-term disability claim; you never applied.
6. What happens if my doctor and employer disagree over my return to work after short-term disability?
Your employment is a matter between you and your employer. In most cases, employers will follow the advice of an employee’s doctor regarding readiness to return to work. However, in some cases, disagreements between your employer and doctor will arise. This normally happens when your employer rejects your doctor’s opinions in favor of what the insurance company is telling them. Disputes can also arise when your doctor says you are ready to return to work, but your employer disagrees. When disagreements between your doctor and your employer happen, it is critical that you make sure your doctor is following the best practices and giving detailed information. Sometimes your doctor will be the problem because they are making unreasonable requests or not giving your employer enough information so that they can accommodate your disability. If your doctor has notified your employer about your ongoing disability, then human rights laws will prevent your employer from from firing you for not returning to work immediately. These protections are not absolute.
You and your doctor must work in good faith with your employer to give them the information they need to determine how and if they can provide accommodations to allow you to work.
7. Can I still collect past unpaid short-term disability after I return to work?
If your disability claim was denied, but you eventually returned to work, then you will be owed a past period of disability payments. Technically, these payments are a debit owed to you which you can sill recover even if you have returned to work. If the insurance company denied your appeals, then you will have to take legal action to recover the past benefits owed. In other words, you will need to file a lawsuit to recover the money.
Lawsuits cost money. You may not be able to recover reimbursement for your legal fees and expenses to run the lawsuit. Here are some of the things you should consider:
- If you receive EI sickness payments, how much money would be left after you pay back the entire EI sickness amount to Service Canada?
- Would you have to sue the insurance company or your employer? Some employers pay the short-term disability, but hire an insurance company to manage it for them. However, when it comes to suing for the benefits, you would have to sue your employer.
- How much money is involved? The amount of money involved will determine if you need to sue in small claims court or in the regular court system.
- Is there any chance you will also need to sue for long-term disability benefits for the same disability and time off work? If there is any chance you may need to sue for long-term disability benefits, then it is critical that you sue for it at the same time you sue for short-term disability benefits. Going to small claims court and losing only on a short-term disability claim may prevent you from making an otherwise valid long-term disability claim.
Do a cost-benefit analysis, figure out if it is financially worthwhile for you to file a lawsuit, and then look for a law firm that will help you win your case.
Before you go any further with your appeal, take a moment to download our Free Disability Insurance Appeal Checklist. Click below to learn more.