Suppose you cannot work due to an illness or injury and are fortunate to have long-term disability coverage through your employer. In that case, you will want to do everything in your power to maximize your chances of getting your LTD application approved and minimize the disruption to your income.  But the process of applying for long-term disability benefits can be confusing. Eventinyall mistake on your application can hurt your chances of being approved. That is why meeting with an experienced benefits lawyer before submitting your long-term disability application is crucial.  Here are some of the mistakes we commonly see LTD applicants make when they do not hire professional counsel before applying for LTD benefits and instead choose to go it alone.

1. Failure to First Obtain the LTD Plan Documents

Before applying for LTD benefits, you should request a copy of your employer’s long-term disability plan or policy.  That document contains critical information about the nature of your coverage, including any limitations or exclusions that may apply to your situation.  Ideally, once obtained, you would meet with an attorney to discuss the policy terms.  Some questions you might ask include:

  • Does my LTD plan define disability as the inability to perform my occupation or any occupation (or both)?
  • Does my LTD plan limit the duration of benefits for mental/nervous conditions and other conditions?  
  • Does my LTD plan contain a pre-existing condition exclusion?
  • When does coverage under my LTD plan begin and end?
  • How does my LTD plan define “pre-disability earnings”?
  • What sources of other income will reduce my LTD benefits?

The answers to the previous questions can inform how you complete the LTD application and may even influence the date you decide to apply for disability.  Having a copy of the LTD plan on file will also assist you once you are on the claim should you have questions about your benefits.

2. Waiting Too Long to Apply

Most LTD plans require that you submit proof of loss no later than 90 days after the completion of the elimination period, but in no circumstances later than one year (unless you are mentally incompetent).  Suppose your LTD plan is fully insured and you live in the minority of states that have adopted the notice-prejudice rule. In that case, your claim may proceed, despite late submission, unless the insurer can show your delay prejudiced it.  Otherwise, your claim could be time-barred if you fail to provide proof of loss within the time frame required by the LTD plan.

3. Accepting a Pay Cut or Reduced Job Duties

All too often, employees who should apply for LTD benefits do not. Instead, they continue to work for their employer but agree to reduce salary or job duties.  Accommodating the employer can backfire if the employee eventually does apply for long-term disability benefits.  The LTD plan administrator will use the lower salary or less demanding job as the basis for awarding disability benefits.  Thus, agreeing to a reduction in pay or job duties will ultimately hurt you by reducing the number of your long-term disability benefits and by reducing the complexity of your occupation such that it can be harder to establish a disability.

4. Failure to Be “Actively at Work” at the Time the Disability Arises

Related to mistakes #2 and #3 above, an LTD application will be denied if the applicant was not “actively at work” when the disability claim started.  Most long-term disability plans define “actively at work” to include weekends, sick days, vacation days, and sometimes leaves of absence provided the claimant was at work on the day immediately preceding the absence.  If there is confusion, the LTD plan administrator will usually contact the employer to confirm the last day of active employment and amend the application, if necessary, to avoid denying LTD benefits on that basis.

LTD applicants run into problems if they continue to work sporadically or receive their salary after the onset of disability.  Often, this occurs when the employer lacks a formal short-term disability plan and instead provides salary continuation on an ad hoc basis.  It can also happen when the employee possesses specialized knowledge that the employer values, even if they can no longer perform their essential job duties.  In this situation, the employee must apply for LTD benefits on time and allege a disability onset date consistent with their last day of usual and customary employment.  The employee should indicate that any salary received after that date is “salary continuation” and that any work performed was done on a consulting basis.  Otherwise, the LTD plan administrator may deny the application for various reasons, including untimeliness, a lack of diminution in earnings, and lack of disability.

5. Not Discussing Your LTD Application Beforehand With Your Physician

Nearly all LTD plans require the applicant to submit an attending physician’s statement of disability with their application.  Often, your treating doctor will be the one to recommend that you apply for long-term disability benefits. And it is assumed that they will complete disability paperwork on your behalf.  If that is not the case, you should have a conversation with your doctor to notify them of your intention to apply for LTD benefits and secure their support for your application.  Ideally, this conversation would take place before you stop working or very shortly afterward.  If your doctor is unwilling to support your disability claim or complete the necessary paperwork, consider asking a different doctor or establishing care with a new one.  It is tough, if not impossible, to receive LTD benefits without the support of your doctor, though some specialized functional tests do exist.  If you find yourself in this situation, it is best to discuss it with an experienced benefits lawyer.

6. Not Including All Relevant Medical Conditions in Your Application

Another typical mistake LTD applicants make is not including all medical conditions that may be contributing to disability.  If you stop working due to an acute illness or injury, it may not occur to you to include other longstanding or chronic health conditions on your LTD application, but that would be a mistake.  Simply because you worked for years despite suffering from a medical condition is not a valid basis for dismissing that condition and the resulting restrictions and limitations.  Thus, if, for example, you stopped working due to a sudden onset of low back pain, but you also suffer from osteoarthritis of the knees, diabetes, and migraine headaches, you should include those conditions on your application (and attach additional pages to the application if necessary).  Failure to include all relevant medical conditions on your initial LTD application is not an automatic bar to later introducing evidence of those conditions. Still, it may cause your claim adjuster to doubt the severity of the conditions you omitted.

7. Failing to Include a Job Description or Resume

Your LTD application should include a detailed discussion of your job duties, mainly if your past work is specialized or complex. Often, long-term disability plan administrators will dupe applicants into providing an overly simplified or generic description of their past work by providing only a tiny amount of space on the application form to describe job duties.  Don’t confine yourself to the area provided and instead attach a formal job description (if you have one) or, if not, a narrative statement describing your job duties and daily routine. Likewise, if you have extensive education or experience in a select field, attaching a resume that shows your accomplishments and degree of expertise can be beneficial.  Including a detailed description of your past work’s mental demands will help ensure that the LTD plan administrator considers those mental demands in its disability analysis instead of focusing solely on the physical needs of the occupation.

8. Signing a Severance Agreement

Many LTD applicants will be offered a severance package at some point during the application process.  Those packages provide payment in exchange for a formal release of the employee’s right to bring a lawsuit or charge of discrimination or other claim arising from the employment arrangement.  Unfortunately, severance agreements often include releasing the employee’s right to bring a lawsuit or claim according to the federal ERISA statute. This could imperil your right to bring a lawsuit should your LTD benefits be denied.  To make matters worse, the severance payment may reduce the long-term disability benefits to negate any benefit to you.  

Suppose you have applied for LTD benefits or are contemplating doing so, and you are presented with a severance offer. In that case, you should meet with an experienced benefits attorney to discuss your options.  The attorney can help you obtain the relevant plan documents and determine whether the severance you are being offered is an offset under the LTD plan.  The attorney can also negotiate with your employer to include a carve-out for the LTD benefits in the severance agreement.

Conclusion

In conclusion, there are many ways a long-term disability applicant can unintentionally jeopardize their chances of receiving benefits.  While you do not need a lawyer to apply for LTD benefits, engaging an experienced benefits lawyer is prudent, especially if you find yourself in one of the situations described in this article.  Contact the experienced benefits lawyers at DeBofsky Sherman Casciari Reynolds P.C. today for assistance navigating the LTD application process.

  • See UNUM Life Ins. Co. of Am. v. Ward, 526 U.S. 358, 119 S. Ct. 1380, 143 L. Ed. 2d 462 (1999) (ruling California’s notice-prejudice rule was saved from ERISA preemption as a state law which regulates insurance).

Related Articles

ERISA Ruling Reveals Big-Picture Health Benefit Issues

ERISA Ruling Reveals Big-Picture Health Benefit Issues

Unlike most industrialized countries, the U.S. does not provide universal government-sponsored health insurance coverage to all of its citizens and residents. Instead, most Americans receive coverage through their employer, while older Americans and people of lesser means receive either Medicare or Medicaid benefits. […]

7th Circuit Holds ERISA Does Not Cover Charter School Teachers

7th Circuit Holds ERISA Does Not Cover Charter School Teachers

The Employee Retirement Income Security Act impacts hundreds of millions of Americans who participate in employee benefit plans sponsored by their employers. However, as Graham v. Board of Ed. Of City of Chicago, 2021 WL 3508563 (7th Cir. Aug. 10, 2021), recently pointed out, ERISA doesn’t cover all employer-sponsored plans […]