Employee LTD disability benefits

Long-Term Disability (LTD) Benefits in Ontario

LTD is a a form of income replacement that employees can receive if they are disabled due to injury. Employees purchase disability insurance personally, but quite often it is provided by employers through health insurance benefits (such as with Sun Life, Manulife, Canada Life, etc.). Usually, LTD benefits begin once an employee’s short-term disability (STD) benefits run out if their health still prevents them from returning to work with their employer. STD coverage typically provides benefits for up to 6 months while an employee is sick or injured.

Unfortunately, sometimes employees who deserve LTD benefits for injuries are denied by disability insurance companies, which defeats their very purpose of providing employees with financial stability while recovering from their injuries. In fact, many LTD disability claims are either denied at the outset, or LTD benefits are terminated before the employee is ready to return to work.

Purpose of LTD Benefits

Disability insurance can help protect an employee (and their family) from an unexpected illness or accident that leaves them unable to work to earn an income. Generally, disability insurance replaces between 60% and 70% of an employee’s normal income, up to a maximum amount, for a specified time if the employee:

cannot work temporarily
are permanently disabled due to an injury or illness

The term “permanent” injury refers to the nature of the disability, and it does not mean that the employee will get LTD benefits for the rest of their life.

Each long-term disability disability plan is different. In fact, some policies may provide disability benefits for up to 2 years if they are unable to return to the job their own job they had before becoming disabled. After 2 years, the employee may continue to receive benefits only if they unable to work at any job.

If employees do not have short-term or long-term disability coverage, he or she may be eligible for Employment Insurance (EI) sickness benefits, as long as:

usually have used all of your sick leave
have worked enough hours

What Types of Injuries can Employees Apply for LTD Benefits?

LTD benefits are intended to cover a wide array of health conditions, often physical injuries but increasingly also mental-health injuries. Typically, each LTD benefits insurance policy defines a “disability” in its own way, which makes it is necessary to review each policy to see which conditions could qualify for benefits. However, some types of medical conditions that may qualify for long-term disability insurance benefits include:

Brain injuries
Multiple Sclerosis
Cardiovascular disease
Arthritis
Anxiety or Depression
Bipolar disorder
Cancer
Fibromyalgia
Chronic Fatigue Syndrome
Carpal tunnel syndrome
Crohn’s disease
Degenerative disc disease
Diabetes
Epilepsy

This is not an exhaustive list, so employees should always consult each long-term disability benefits insurance policy to understand what is covered.

If you believe you were wrongfully denied long-term disability insurance, reach out to our team today. We can help you learn about the different avenues available to you.

Definition of LTD Disability

The definition of a disability can vary between LTD insurance companies, and some disability plans may also require an employee take part in a rehabilitation program if it can help them get back to work.

Any occupation

The definition of “any occupation” plan means an employee will receive LTD disability benefits only if they unable to work at all. This mean an employee’s illness or injury prevents them from performing the duties of any job for which they are reasonably suited.

In this case, an employee does not qualify for LTD benefits if they can work in a different job from the one they had before your disability, based on their training, experience and education.

Regular or own occupation

The definition of “regular or own occupation” plan means an employee will receive benefits if they are unable to perform the main duties of the job they had at the time the disability started.

In this case, an employee may still receive benefits even if they can work in a different job from the one they had before their disability, based on their training, experience and education. However, some LTD policies do not allow employees to receive LTD benefits, or may reduce their LTD benefits, if they begin working in a different job.

Disability insurance benefits and taxes

Generally, if an employee pays the full amount of the disability premium themselves, their LTD disability benefits will be tax-free. This may bring their income while on disability closer to their current take-home pay.

However, if an employer pays all or some of the disability premium, the LTD disability benefits will be subject to income taxes.

Off-setting of benefits

Generally, any LTD benefits an employee receives from one LTD insurance plan can offset income received from another insurance plan. So, if an employee has multiple insurance plans, their income while on disability will usually not be higher than 60% to 85% of their normal pay.

Many long-term disability insurance plans reduce the LTD benefit amounts as soon as an employee begin getting other sources of disability income.

Employment and Disability Lawyer in Toronto

In Ontario employment law, it is important for employees to consult with a wrongful dismissal lawyer as soon as they are told by an employer that their employment will be terminated. If you are an employee who believes you have been wrongfully dismissed and the decision to terminate was related to a discriminatory reason, please speak with our experienced wrongful dismissal lawyer in Toronto regarding your options, including negotiating your severance package to obtain the severance compensation you deserve, as well as wrongful dismissal claim.

Contact us by phone 647-822-5492 or fill out the contact form to the side. Our employment lawyer in Toronto would be happy to assist in your employment law matter as quickly as possible.

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