Did you recently go on a sick leave from work? Did the insurance company hand you back a short-term disability denial letter? Are you unsure of what to do next?
If you answered yes to any of these questions, keep reading. As part of our Ultimate Guide to Short-term Disability, this article overviews everything you need to know about short-term disability denials, including common reasons for a denial, how to appeal, and more.
Reasons for a Short-Term Disability Denial
The story usually 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 don’t take a sick leave soon, you will break down. 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 on top of that have no idea what you did wrong.
Getting a denial letter can be a tough pill to swallow — we know that. But understanding the reasoning behind a denial will give you the best chance of reversing that decision.
Let’s dive in!
1. Your symptoms aren’t serious enough to qualify for short-term disability
Your short-term disability may get denied because your symptoms don’t appear to be serious enough. This can be another way of saying that you don’t have enough medical documentation. Unfortunately, the insurance company needs more than just your own account of your symptoms. You might need to get extra confirmation from your doctor and ask them to provide documents that show the seriousness of your symptoms, and how they prevent you from working.
2. Your medical records don’t show a serious disability
This is similar to the issue above. In this case, when the insurance company looks at your medical information, nothing indicates that you have a serious condition. This doesn’t mean that there’s nothing serious going on — it just means that your records don’t properly reflect it.
You will have to get more documentation from your medical team. Your doctor can further describe your symptoms and the treatment you require, for example.
3. Your treatment doesn’t indicate a serious disability
There’s a misconception that if you have a serious condition, you will receive serious treatment. But the two don’t always go hand in hand. If the insurance company doesn’t see enough treatment or the right kind of treatment, they may provide this as a reason for your short-term disability denial.
Depending on your diagnosis, there are standards of practice in the medical community. This means you should be treated a certain way for a certain condition. The insurance companies will have doctors reviewing your treatments with these standards in mind, and if your treatment doesn’t align with them, you may get slapped with a denial letter.
The remedy? Make sure your doctor is following best practices and treating you accurately. This might mean you have to go see specialists and try medication to match the commonly perceived “seriousness” of your condition.
4. You’re not sick — you’re in a toxic work environment
The insurance company might give this reason, but what they are really saying is they don’t think you have a disability — it’s drama. You’re not sick, you just want to leave your toxic work environment.
Just because work stress has caused you to leave doesn’t mean you shouldn’t qualify for disability.
When dealing with your insurance company, don’t overstate how bad your work environment is. If the insurance company can argue that the environment just needs to clear up and you’ll be fine, they will try to push that narrative.
Obviously, this is highly oversimplified. In any case, you should bring up these problems with your employer to make sure they’re being corrected in the workplace.
5. Short-term disability does not cover parental leave
Sometimes, the insurance company believes that you just want to stay home with your kids. They won’t say this outright, but it may be heavily implied. If you’re off on sick leave and also happen to have young children, they might be skeptical about the truth of your claim.
This type of situation gets dicey fast. In these situations, we encourage you to get legal advice as soon as you can. You have to be cautious of how you present yourself and careful with what you say when you interact with your insurance company.
6. Your doctor doesn’t support that you have a disability
Sometimes doctors will be against their patients. For example, we’ve seen doctors write that they don’t think their patient has a disability. Or, they’re on the fence, and they simply aren’t saying enough in their records. They might include very general information — but no outright support.
If your short-term disability gets denied because of this, it’s one of the easiest things to fix. A lot of doctors have good intentions and are just mistaken about what’s required for you to go on sick leave. Sometimes, you will have to educate your doctor about what’s required and prove to them that you’ve done everything you can to get better. Once you have done this, their records should show their support.
My Short-term Disability Claim Was Denied. Now What?
Now that we’ve discussed some common reasons for a denial, let’s talk about your options moving forward. Below are the six things you can do after a short-term disability denial.
1. Appeal the denial
Your first option is to appeal the denial. The appeal procedures are usually the same regardless of what short-term disability plan you’re enrolled in. But you should always check with your insurer to learn more about their specific appeal process.
The first step in any plan, however, is to notify your plan administrator that you want to appeal the decision. After that, you will be given a deadline to submit your appeal. Deadlines vary but they are usually around 90 days. Some plans are stricter about deadlines than others but generally, we recommend sticking to the date they provided. If for any reason you think you can’t make that deadline, contact your plan administrator and ask for an extension.
Once you know the deadline, gather all the information needed for your appeal. This is often the hardest part of the process. You may have thought your previous application included everything you needed to get approved. If you are unsure about what information you should submit along with your appeal, reread your denial letter. The insurance company is required to provide their reasons for your denial in this letter. So, think of this document as your guiding compass when it comes to preparing your appeal. Look at their reasons and make sure your denial letter addresses them all. For example, if your denial letter points to a lack of treatment, you should include documentation of your new treatment plan.
Once you are satisfied with your appeal, you can send it off. Insurance companies will usually take around 30 days to get back to you with a decision. If they approve your claim, great, but if they deny it, you can usually appeal it again. Most insurance companies allow you to appeal up to three times. To be clear, this kind of appeal is done directly with the insurance company. It is referred to as an internal appeal. We call it “internal” because at this point it only involves you and the provider.
External appeal
There is another option though. Instead of doing another round of internal appeals, you can opt for an external/legal appeal. This appeal involves an outside party, usually a judge or arbitrator who ultimately makes the decision. At this point, we highly recommend hiring a lawyer. Oftentimes there are unwritten reasons for a denial, an experienced disability lawyer will have a better sense of what the real reasons are and can create a strategic plan to address them.
2. Go back to work
This may not be an option, but it’s possible you were denied because you are well enough to work. Be honest with yourself on this. If you know you can’t work, then skip this option.
3. Apply for EI Sickness benefits
If your short-term disability appeal is denied, but you are not well enough to return to work, then your next best option is to apply for Employment Insurance (EI) sickness benefits. EI Sickness benefits are a Federal Government Program paid by Service Canada. They will pay you 55% of your pre-disability weekly income for up to a maximum of 15 weeks. Applicants can fill out an application online or at a Service Canada office. You will need to get a Record of Employment from your employer that shows you are on a medical/sick leave from work. You will need your doctor to certify that you are unable to work due to illness. EI sickness benefits will give you 15 weeks of payments.
4. Apply for long-term disability benefits
If you are still not able to work after 15 weeks, then you need to apply for long-term disability benefits. You should apply for long-term disability benefits even though your short-term disability claim was denied. While it is almost certain the insurance company will also deny your long-term disability claim, you need the application and denial to happen so you have more options.
5. Appeal the long-term disability denial
You have the option to ask the insurance company to review its decision to deny your long-term disability claim; but, this really has a very low chance of success unless you have some new information or medical information that was not already given to them. If you don’t have new information, then you should just skip this step.
6. File a lawsuit against the insurance company
If the insurance company denies your long-term disability claim, and you are still not able to work, then your next step is to file a lawsuit against the insurance company. Speak with a disability lawyer to learn about your options. You may be concerned about not having money to hire a lawyer, but there are disability lawyers across Canada who could represent you on a no-win, no-fee basis.
Answers to Frequently Asked Questions: Short-Term Disability Denials
Every year, we speak to hundreds of people just like you. Here are the answers to the seven most common questions we get about short-term disability denials.
1. What is my best chance of winning an appeal?
Good information from a supportive doctor is the key to getting your short-term disability denial reversed. You need to get your doctor on your side (or get a new one) if he or she is unsupportive. You must also make sure that your treatment follows the best practices, and 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. Always communicate this to the insurance company.
2. Can I apply for EI sickness payments after a short-term disability denial?
Yes, you can apply for EI sickness payments. You can do this if the insurance company declines your claim. You can also apply if 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. If your short-term disability is approved later, you must pay this back.
3. Can my employer terminate me after my 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 you experience a short-term disability denial, the insurance company will inform your employer. 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, you must 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 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 lose 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 to return to work as 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 to make this argument.
5. Can I apply for long-term disability benefits if my short-term disability was denied?
Most insurance companies will not let you apply for long-term benefits after a short-term disability denial. All long-term disability benefits have an initial waiting period. This waiting period means you must be continuously disabled for a minimum number of weeks before you 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 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 because 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 favour 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, you must make sure your doctor is following the best practices and giving detailed information. Sometimes your doctor will be the problem. This happens when they make unreasonable requests or don’t give your employer enough information to accommodate your disability.
If your doctor has notified your employer about your disability, then human rights laws will prevent your employer 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 you received a short-term disability denial, but you eventually returned to work, then you will be owed a past period of disability payments. Technically, these payments are a debt owed to you. You can still recover the payments 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 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 you must 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. Then, look for a law firm that will help you win your case.
Next Steps — Get Your Free Book
Click the image below to download our free book — A Beginner’s Guide to Disability Insurance Claims in Canada.
