Many disabling injuries or medical conditions keep you completely out of the workforce for a long time, and possibly permanently. However, some disabilities might initially qualify you for disability benefits but then might allow you to work to some extent.
Working may seem advantageous because you can earn income and still receive disability benefits.
However, things are more complex than they seem because you might:
- Receive reduced benefits
- Not earn as much money as you expected
With both your benefits and income reduced, the financial stress might grow beyond when you did not work at all. Further, working in any capacity can allow insurance companies to argue you should not continue to receive disability benefits, and it may make it easier for them to stop paying you entirely.
Before you change your work status or communicate with your insurance company about your changing condition or work opportunities, always consult an experienced disability claims attorney. They can evaluate your situation and ensure you continue to receive the maximum financial support possible, given your circumstances.
You Initially Qualify for Disability When You Cannot Perform Your Job
In the beginning, disability means that you cannot perform the job duties you did before you became ill or injured. So long as you cannot do what you previously did for your job, you should qualify for disability benefits.
You will present a combination of medical records and testimony to show that you cannot work in the occupation you previously did before your condition. Of course, it is not always easy to prove this, as the insurance company will often deny your disability benefit claim.
If you are struggling to receive disability benefits from an initial claim, consult a lawyer who handles disability claims. The right legal representation can often recover the maximum benefits possible under your specific policy.
The Definition of a Disability Changes After Two Years
Just because the insurance company initially approved your claim does not mean your benefits will continue indefinitely for the rest of your career. You are on the insurance company’s books as a continued cost, so it will do whatever is in its power to cut off your benefits.
For most policies, the definition of disability often changes two years after you first qualify for benefits. After 24 months, the insurance company can change the rules concerning your disability claim. Then, the insurance company will only continue to pay benefits if you cannot work in any job. In other words, it wants you to do whatever you can to earn money.
Suppose you worked on a factory floor before and can no longer do physical work. The insurance company will expect you to perform some type of office work regardless of your training and abilities.
Of course, this assumption best suits the insurer’s financial interests. If you can do a job, you might start at the bottom of the new line of work, and your disability may prevent you from working full-time.
Still, you can earn some money at a new job, but will it affect your overall financial support?
If your disability insurance is wrongfully trying to cut your benefits and assert you can work, speak with a disability attorney.
If you can do some work but less than before, you should also discuss your income and benefits options with your lawyer. They can determine the best course of action for your condition and financial situation.
You Might Still Work and Draw Some Disability
You can get some disability benefits while you do some work. Just because you can earn some money does not mean the insurance company can wash its hands of you and take your claim off their books.
Remember that disability insurance theoretically intends to protect your earnings from before you became disabled. In practice, things work quite differently.
Consider the Effect Before You Take Any Job
Before taking any job while on disability benefits, consider the potential ramifications. You may not intend to disturb your financial situation, but when you work on disability, the insurance company may determine that you can work and cut off your benefits.
Before you make any changes to your current situation, you should consider consulting with an experienced disability attorney. They can advise you of things you need to think about and explain the possible outcomes of your situation.
If the insurance company tries to cut off benefits, your attorney can represent you in an appeal, both in front of the insurance company and in federal court.
What to Do if You Plan on Returning to Work in Some Capacity
If you plan on returning to work in some capacity, you should first review the exact language of your policy to understand the limitations and what may happen. Each policy differs and can affect whether you work and keep your benefits.
Review the language carefully with your lawyer, because every word and comma in the document matters.
Your policy likely addresses returning to work and imposes earnings limitations. You do not want to return to work under a mistaken assumption only to find out you no longer qualify for benefits.
Your attorney will advise you about your limitations and what you may need to consider as you return to work in some capacity. If you receive a communication from the insurance company indicating that your benefits are in danger, consult a disability lawyer.
The Insurance Company Has the Right to Check Your Income
You must provide proof of your income to the insurance company. Your policy may contain a limitation on what you can earn between your disability benefits and compensation from a new job.
Most policies will not allow the combination of your disability benefits and earnings to exceed what you were making before your health condition. If that were the case, you would receive a windfall due to your disability benefits.
If you are making more than before, the insurance company will reduce your benefits so that your earnings do not exceed that amount. You must give the insurance company complete and honest information; otherwise, it can terminate your benefits.
When you report earnings to the insurance company, you can expect that it may give you extra scrutiny about your medical condition and even call for an examination.
Your Insurance Company May Presume That You Can Work Based on Your Earnings
Other policies may presume that you can work if you earn 80 percent of what you made before in your new job. The insurance company may presume you have recovered based on what they see you earning. Therefore, while you may want to do everything you can to improve your financial situation, you must take care.
The Insurance Company May Give Incentives to Get You Back to Work
Insurance companies may incentivize you to return to work because it means that they pay less. Some policies will provide residual benefits even after you return to the workforce.
The benefits will depend on how much you earn in your new position. In some cases, the insurance company will continue to pay something as long as you are not earning more than 80 percent of what you made before you stopped working. If you earn less than 20 percent of what you made before your illness, you may continue to receive your benefits in full.
The Insurance Company May Try to Limit Your Work
Insurance companies try to limit what you can earn by broadly interpreting your work before your condition to determine what you can do now.
For example, they can impose a license-based limitation that keeps you from doing anything related to your professional license. If you worked as a lawyer before your disability, you might not keep your disability benefits if you do anything that your law license allows.
This is, of course, only one example of possible limitations on your work while receiving disability benefits. If you question certain restrictions, consult a disability attorney immediately.
The Insurance Company Will Use Anything It Can Against You
Do not take any job when you are on disability benefits before you consult a lawyer, because the insurance company will always watch you. You might have to provide ongoing income documentation and medical records to keep receiving benefits. The insurance company wants to stop paying you and will carefully review your situation to justify reducing or canceling benefits.
Insurance companies will work to make things difficult for you when they try to avoid paying your benefits.
If your disability prevents you from performing your previous occupation, they might argue that you can work in some other capacity and should not have to pay you full benefits. Then, if you try to take a job to continue receiving some disability benefits, they might argue that you earn too much money and cut off your benefits altogether.
You Can Appeal When the Insurance Company Tries to Stop Paying You
You can appeal the decision if the insurance company wrongfully terminates your benefits.
How you fight back depends on how you got your disability benefits in the first place. If an employee benefit covered you through your job, you must file an administrative appeal under a federal law called ERISA. If you bought your disability insurance coverage independently, you can sue the insurance company directly.
ERISA gives the insurance company a built-in advantage.
If the insurance company denies your claim, you will need to build the appeal file, and it will most likely review and deny your appeal. Only then can you go to federal court and have an objective judge review the insurance company’s decision based on the same record.
Even though the procedure favors the insurance company, you can overturn their decision in court with the help of an ERISA lawyer.
If you can sue the insurance company in state court for breach of contract, you do not have to go through any intermediate steps. The judge may not even have to give any deference to the insurance company’s decision. You can file a lawsuit if the insurance company has acted in bad faith.
You Need a Lawyer to Fight Back if the Insurance Company Cuts Off Benefits
Hire an attorney if the insurance company ends your benefits. When insurance companies realize they can save hundreds of thousands of dollars or more, they may aggressively try to kick you off the rolls. Then, they will vigorously defend themselves in court to defeat your appeal and avoid setting any negative legal precedent.
Insurance companies can make your life difficult, but they do not get the final say.
With the right legal representation, you can present a stronger argument regarding why your insurer is wrong.
You Do Not Need to Pay Out of Pocket for a Disability Insurance Lawyer
It does not cost you anything to hire a disability insurance attorney. Consultations are always free, and your lawyer will work for you on a contingency basis. They will not ask you to write them a check out of your pocket for their services during the legal process, and your attorney only receives payment if you win your case in court or get a settlement. Thus, there is no risk to you in getting a lawyer.
On the other hand, if you do not hire an attorney, the insurance company can more easily get away with wrongfully cutting off your disability benefits—so seek legal help today.
J. Price McNamara
Attorney
Losing my own brother, then my father and sister after long, disabling illnesses just a few months apart drove a career change for me. Before that experience, I never truly understood the place you’re in. I never understood the dramatic impact that receiving (or not receiving) the disability and life insurance benefits you paid for and counted on can have on your life especially when you need to focus on family and healing. What I experienced with my own family now drives the way I view my clients and my work, and I will never forget it!
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