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Frequently asked questions about disability insurance

Faith Hayman, Trial and Appellate Lawyer

Ms. Faith Hayman graduated from Osgoode Hall Law School, Toronto, in 1983. She represents clients pursuing primarily personal-injury actions and disability-insurance claims. Ms. Hayman was on the executive of the BC Trial Lawyers’ Association for 10 years and, for the last several years, has chaired the Rules Committee. She serves on the Board of Governors of the Trial Lawyers Association of British Columbia and is also a member of the Ethics Committee of the Sunny Hill Health Centre for Children. Ms. Hayman has argued court cases at all levels, including the Fidler v. Sun Life decision in the BC Court of Appeal and the Supreme Court of Canada.

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Q: Are there any restrictions on what information an insurer gives the employer about an employee who has made a disability claim?

In general, the insurer should only state that it has either approved or denied a claim.

Q: What information does the insurer have a right to know?

A disability insurer has a right to medical information about any medical issues relevant to paying a disability claim.

Q: If I reach the “any occupation” stage, am I considered employable if the insurer identifies an alternative job that I can do but have never done before?

The insurance policy governs what is an acceptable alternative occupation. At the “any occupation stage”, most policies say that an insured person is considered disabled if they cannot perform any occupation for which they are reasonably suited by their education, training or experience. If you can do the alternative job because of your training education or experience, then you will be considered employable (not disabled), as long as the alternative job pays at least 2/3 of the income you earned in your own occupation. Some policies say that insured people are disabled if they can’t earn a specified percentage (ranging from 50-80%) of their pre-disability income, in which case, this is included in the test of employability.

Q: If I reach the “any occupation stage,” am I considered employable if the insurer identifies a job that is not available in the region where I live?

Many disability insurance policies state that benefits will not be paid just because of a lack of jobs in your area. Even so, and particularly if there is no such provision in your policy, the answer to this question is not necessarily straightforward. However, the insurer will expect you to take reasonable steps to find appropriate alternative employment.

Q: If my doctor says I cannot work, can the insurer force me to participate in a rehabilitation plan?

This is a difficult area. Many disability insurance policies say that, if you are disabled, the insurer may require you to undergo rehabilitation. However, the insurer’s requirements about rehabilitation have to be reasonable. If your doctor considers the rehabilitation plan to be unreasonable or potentially harmful to you, they should write a letter to the insurer saying so and explaining why. An insurer cannot likely justify forcing you to undergo rehabilitation if it is not supported by your treating doctor.

Q: If the insurer asks me to go to an independent medical assessment (IME), do I have to comply?

All insurance policies require the insured person to undergo medical assessment if the insurer’s request is reasonable, so the short answer is yes. The insurer is expected to choose medical experts who are qualified and impartial, and you are entitled to receive the expert’s report. However, most insurers usually send the report to the insured person’s family doctor.

Q: If I choose not to have treatment that my doctor considers life-saving, is my insurance in jeopardy?

Yes, but only if (a) your doctor recommends the treatment, (b) there is limited downside to the treatment and an obvious upside, and (c) the treatment realistically offers a chance for you to return to work. If the treatment is optional and/or unlikely to enable you to return to work, and your doctor does not clearly recommend it, then the insurer should continue to pay benefits for as long as you remain disabled.

Q: If I choose not to have treatment because my condition is not curable, can I be denied benefits?

An insurer should not deny benefits if treatment cannot cure you or realistically increase your likelihood of being able to return to work.

Q: If I choose not to take psychiatric medication prescribed by my doctor, can I be denied benefits?

If you have a disabling psychiatric condition that can be effectively treated with medication, and if taking the medication would realistically increase your likelihood of being able to return to work, then the insurer may rightly deny you benefits. If the medication is recommended by someone other than your treating doctor, or if you would be unable to work even though the psychiatric condition was treated, then the insurer should not deny you benefits.

Q: What do I do about a case manager who I feel is harassing me?

You should talk with your doctor about this. You might also write a letter (and have your doctor write a letter) to the insurer raising this concern. You might want to problem solve by, for example, agreeing to communicate with the insurer every 2–4 weeks. Remember, within reasonable limits, the insurer has the right to know how you are doing and what steps you are taking to try to get better.

Q: Is an insurer obliged to provide rehabilitation if my doctor recommends it?

Disability insurance policies often state that insurers have the option to offer rehabilitation. However, policies never require an insurer to provide it. However, if an insurer sets up a rehabilitation plan for you, they must follow through fairly and reasonably.

Q: If a doctor recommends to the insurer that I receive an independent medical examination (IME), such as a neuropsychological assessment or a functional capacity evaluation, who is responsible for paying for the IME?

The insurer is under a duty to investigate your claim. This includes paying for independent medical examinations. Although the insurer is not required to arrange an IME based on whatever your doctor recommends, if the doctor’s suggestion is reasonable, is ignored and benefits are wrongly denied, this would be a breach of the insurer’s duty of good faith” and potentially grounds for legal action.

Q: Who is responsible for paying for medical notes and records for insurers?

The insurer is under a duty to investigate your claim when it begins and while it is active. This includes paying for medical notes and records. However, if the insurer denies your claim, you will need to pay for the notes to send to the insurer. This cost may be recovered if the insurer changes its position and decides to approve your claim.

Q: If my diagnosis is palliative or I have late-stage cancer, am I eligible for long-term disability?

Yes, you are eligible as long as you meet the insurance policy’s definition of “totally disabled.”