What Happens When an Employee Goes on Long-Term Disability?

November 8, 2023 | J. Price McNamara
What Happens When an Employee Goes on Long-Term Disability?

It is a major achievement to get the insurance company to approve your claim for long-term disability. Few people successfully persuade the insurance company to grant you benefits in the face of their own financial interests.

Once you receive a benefits approval, the disability insurance company should start paying you monthly.

Your long-term disability benefits will pay you a percentage of your pre-injury earnings. You can expect to receive this money every month.

If anything does not go as expected, and you do not receive your rightful benefits, or the insurer tries to end your benefits prematurely, never hesitate to seek help from a long-term disability claims attorney.

Benefits Are Not a Guarantee Even When Granted

If insurance companies hate one thing, it is writing checks. They view you and your monthly payments as a drag on their bottom line. Thus, you have to keep a wary eye on them so long as you receive their checks. They will certainly keep their eyes on you.

Claimants should prepare for insurance companies to use every tactic in the book to cut off their benefits. The disability insurance company will use the law to its own benefit, especially when ERISA governs your claim. You never know what an insurance company can and will do when money is on the line.

Insurance Companies Change the Rules After Two Years

One of the key milestones in any long-term disability claim is when you reach the 24-month mark. Every single insurance provider changes the definition of disability at this point. Even if you already received benefits, this is a dangerous time for you, as you can very well lose the benefits the insurer initially granted.

Your policy contains two different definitions of disability. To qualify for benefits, you must meet your policy’s definition of disabled in effect at the time.

The definitions of disability are:

  • For the first 24 months, you need to prove that you cannot perform the duties of the job that you had before you developed your condition.
  • After 24 months, the standard gets much tougher. Then, to show that you are disabled, you must demonstrate you cannot perform any job.

Insurance Companies Do Not Want to Continue Paying You Indefinitely

You can maintain your disability benefits, but the insurance company can make things very hard on you. They might require you to attend an examination with a doctor the insurance company hires. They examine you in a whole different light, completely independent of your initial medical exams when you first qualified for benefits.

Insurance companies decide to terminate benefits for mind-boggling reasons. For example, in one case, an insurance company completely ignored a claimant’s chronic long-term back injury when it decided to terminate benefits.

The claimant had a job with physical tasks. A functional capacity evaluation after two years found she could lift, carry, push, and pull certain amounts, but she experienced extreme pain when doing so. The insurance company ignored her pain and stopped her benefits. The claimant fought the insurance company and won, earning the reinstatement of her benefits.

You Can Expect Insurance Company Surveillance

The insurance company will subject you to surveillance while you receive benefits. There is too much money at stake for them not to. If you wonder whether the insurance company can invasively check in on you, the answer is yes.

The insurance company may check your social media accounts to see what you do in your private life. Do not think keeping your settings private will keep the insurance company from learning what you do. They have ways of building a case to terminate your benefits.

The Insurance Company May Even Have Someone Follow You

An insurance company can hire a private detective to follow you around. They can do that, too, so long as they are not trying to take pictures of you inside your home. The private detective can see what you do in your daily life.

If the insurance company believes that what you are saying is inconsistent with how you live, they will not hesitate to challenge you and stop benefits. Then, you have to fight them in court.

In the case described above, where the insurance company cut off benefits, they photographed the claimant running errands and getting lunch. They used that as preposterous evidence she could perform the duties of a job. They may make outlandish decisions to force you to fight.

You Can Appeal When the Insurance Company Takes Away Your Benefits

You may appeal the decision when the insurance company cuts off your benefits. The process of appealing depends on how you got the policy.

If you purchased the policy privately, you can sue the insurance company for breach of contract. A judge will review your situation to determine whether you are disabled and whether the insurance company violated your rights by stopping benefits. You may even sue the insurance company directly for bad faith if they had no reasonable basis whatsoever to stop your benefits.

Filing an Appeal Under ERISA

If your disability benefits come from your job, you must pursue a different route to file an appeal. Employee benefits are governed by a federal law called ERISA. On the surface, this law protects employee benefits. In reality, the law protects insurance companies.

First, ERISA requires you to appeal directly to the insurance company. You may think that appealing the decision directly to the company that denied your claim in the first place is hopeless. Indeed, most of these appeals fail, as the insurance company just wants to strengthen its own denial if your case goes to court.

However, you still need to actively participate in the process, assembling a high-quality appeal file for the insurance company to consider when it hears your case. You must put forth all of your evidence at this point because you cannot add any evidence to the appeal file once you submit it to the insurance company.

If your case ends up in federal court, the judge can review only what you submitted to the insurance company as part of the appeal. The court will only review whether the insurance company reached the correct decision. You do not have the ability or right to add any information to the appeal file after that point.

A Federal Judge Can Give an Objective Decision About Your Case

The real battlefield in an ERISA disability benefits case is federal district court. If the insurance company denies your case, the judge will review your case to determine whether the insurance company made a mistake in terminating your benefits. The judge will issue an objective decision after reviewing your case without any of the same biases or financial motivations that prejudice the insurance company.

Hire a lawyer when you are already receiving benefits. You will encounter challenges while receiving disability benefits that you need help navigating. You can never trust the insurance company when they pay you benefits because they always look for a way to stop paying you.

When the insurance company asks you to attend a medical examination around the 24-month mark, get legal help. The doctor will ask you a series of questions, and your lawyer will explain how to deal with them.

Hire an Attorney for Your Appeal

If the insurance company terminated your benefits, immediately hire a lawyer to handle your appeal. You have limited time to appeal the termination of benefits and need a lawyer’s help to do so.

You Can Fight or Negotiate a Settlement

The insurance company may pressure you to reach a settlement agreement with them so they can clear your claim off their books for less than it is worth. Your disability insurance attorney will build a strong case for your full benefits.

You Do Not Have to Pay Out of Pocket for a Lawyer

It does not cost you anything to hire an attorney out of your own pocket. You will not pay any retainer fee to the attorney when you hire them. Instead, you only pay them if you win your case. The attorney will not send you hourly bills during your case, and will not bill you for you for their time if you do not win your case.

The risks are far more pronounced if you do not hire an attorney. Then, the insurance company will try to push you around because nobody will protect you.

If your disability insurer tries to stop your benefits when you still cannot work, never wait to consult an ERISA disability attorney. They can assess the reasons for your benefits cancellation and develop a strong appeal strategy. Put your appeal in trusted hands for the best chance of continuing benefits.

J. Price McNamara Author Image

J. Price McNamara


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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