When you become wounded or sick, disability insurance protects you from losing your income. The larger your risk, the higher your insurance premiums will be. Aside from your coverage requirements â the amount and duration of disability benefits you’ll require â premiums are determined by your age, occupation, medical history, and lifestyle.
If you have pre-existing problems, you can generally receive disability insurance without paying higher rates, but your benefits will not cover accidents or illnesses caused by your pre-existing condition, which is known as an exclusion.
Can you be denied disability insurance for pre-existing conditions?
Exclusions are common in group long-term disability (LTD) insurance. The is one of the most common exclusions “exclude for “pre-existing conditions” In this post, I’ll look at how a pre-existing condition exclusion is typically worded in a group LTD policy and what you should do if your LTD claim is denied due to a pre-existing condition exclusion.
Your policy, like other LTD plans, is a contract between your insurance company and you, the policyholder (in a group policy, the policyholder is your employer). As a result, it’s critical to study the policy’s particular wording and how it pertains to the facts of your case. Your denial letter from the insurance company should provide the exact policy wording that the insurer is relying on to deny your claim if it was refused due to a pre-existing condition exclusion. If the wording was not included in your letter, you will need to request a copy of the policy from your employer or the insurance company (the policy is not the same as your benefit booklet, which is a summary of the policy and may not include the pre-existing exclusion clause or the wording may differ).
The pre-existing condition exclusion normally only applies if you file a disability claim within the first year of your coverage starting (this time period could vary, but it is typically it is the one year period after the effective date of coverage). If the insurance company discovers that you visited a doctor or received treatment for your disabling condition before your policy began, it may deny your claim due to the pre-existing condition exclusion.
The goal of the pre-existing condition exclusion in group insurance is to ensure that these policies are not underwritten individually for each member of the group.
In other words, the insurance firm has no knowledge of the medical history of the individuals in the group when they become insured, and so has no idea what the risk of providing each individual with insurance coverage is. Essentially, the insurer wants to avoid paying claims to persons who get jobs solely for the purpose of obtaining LTD coverage so they can file a claim for LTD right away. As a result, if you have a medical condition when your LTD coverage begins, you may be denied payments if you become disabled within the first year of coverage. If you are able to work for more than a year after your coverage begins, the pre-existing condition exclusion will not apply, and the insurer will review your case regardless of whether you had the ailment in the months or years before your coverage began.
If a pre-existing exclusion applies to your claim, your insurance company will almost certainly investigate your health before your coverage begins. This will entail requesting all medical records for the time period in question. The time period will vary based on the insurance (remember to check your policy’s exact policy wording), but it is normally 90 days prior to the effective date of your coverage, though it might be much longer. There may also be text that specifies the exclusion does not apply if you did not receive any treatment for the disabling/pre-existing disease for a particular amount of time.
If the insurance provider establishes that you had any symptoms, were diagnosed, contacted a physician, or were being treated for the same condition (or even a related ailment) for which you are now claiming LTD benefits before the effective date of coverage, your claim will be denied. The main question is whether the ailment for which you are filing an LTD claim is the same as the one for which you filed the claim “A pre-existing condition is “connected.” It can be difficult to tell if your disabling condition is serious or not “The insurance company, the insurer’s doctors, and your doctors will all interpret this as “connected” to the preceding ailment. It’s also the most common point of contention in a case for LTD benefits.
Not only are there often conflicting perspectives on whether a pre-existing condition and a debilitating condition are “connected,” but also on what constitutes “therapy,” “consultation with a physician,” “symptoms,” and “diagnostic.” “Determination.”
While the policy language may define these terms, they are also susceptible to interpretation and debate in court.
An individual, for example, files an LTD claim for anxiety and panic disorder.
The claim is filed during her first year of coverage.
She has a long history of depression (which may have came and gone over months and years), but she has never had anxiety or panic attacks and has been able to cope with her depression on a consistent basis.
She may have been using an antidepressant prescription before her coverage began.
She may have even been having cognitive behavioral therapy on a regular basis to help her cope with her depression symptoms. She then suffers severe anxiety and panic attacks at some point during the year, possibly as a result of a triggering event, a family trauma, or a career issue. She is unable to continue working and files a claim for anxiety and panic disorder. The insurer dismisses her claim due to the pre-existing condition clause, claiming that depression and anxiety are intertwined illnesses. They can claim that the medication or therapy she was receiving was also used to address anxiety. Of course, whether the conditions are related and whether the individual was receiving treatment for her disabling condition throughout the pre-existing condition period are open to interpretation in a case like this.
Thankfully, in circumstances like the one above, when the policy wording is ambiguous, the courts usually rule in favor of the claimant.
Tyson v. Holloway*, a recent Alberta case in which the plaintiff was having investigations before to coverage and was diagnosed with a brain tumor three days after coverage began, is an example. In this case, the Court decided that the pre-existing condition exclusion’s phrasing was confusing and should be interpreted in favor of the plaintiff.
If your LTD claim is refused due to a pre-existing condition exclusion, make sure to read your denial letter carefully to grasp the exclusion’s exact wording. Most insurance will only perform a pre-existing condition inquiry if you file a claim within the first year of coverage.
It’s important to remember that determining whether or not your impairment is covered by the pre-existing condition exclusion isn’t black-and-white. These cases frequently hinge on the facts of each case as well as the policy’s particular wording, and this area of law is exceedingly complicated. If you believe your claim was wrongfully refused due to a pre-existing condition exclusion, you should speak with an experienced disability lawyer. This is a highly technical denial that will necessitate the assistance of counsel who has litigated matters involving pre-existing condition exclusions.
The preceding should not be construed as legal advice.
This blog is provided solely for educational reasons and to provide you with broad information and a basic grasp of the law, not to provide particular legal advice.
By accessing this blog, you acknowledge that you and the blog publisher do not have a solicitor-client relationship.
The blog should not be used in place of professional legal counsel from a certified attorney in your area.
If your disability claim has been refused and you require legal assistance, call a disability law attorney.
What is considered pre-existing condition for long term disability?
“Any accidental bodily injury, sickness, mental illness, pregnancy, or episode of substance abuse, or any manifestations, symptoms, findings, or aggravations related to or resulting from such accidental bodily injury, sickness, mental illness, pregnancy, or episode of substance abuse, or any manifestations, symptoms, findings, or aggravations related to or resulting from such accidental bodily injury, sickness, mental illness, pregnancy, or episode of substance abuse, or any manifestations, symptoms, findings, or aggravations related
What is a pre-existing disability?
Any medical condition for which “medical attention” was received three to six months before to the coverage start date is considered a pre-existing condition. A pre-existing condition exclusionary period may apply to LTD plans. An individual’s prior medical condition(s) will not be covered by the policy during this time. The ailment, however, becomes covered under LTD coverage after the pre-existing exclusionary period expires.
Does Aflac cover pre-existing conditions?
Pre-Existing Illnesses Limitation: Aflac will not pay benefits for any time of incapacity resulting, directly or indirectly, from a Sickness or Injury for which you incurred expenses, received medical treatment, or took prescribed drugs during the 12 months before to the most recent Effective Date of your insurance.
Why are pre-existing conditions excluded?
A pre-existing condition exclusion period restricts the number of benefits an insurer is required to offer for specified medical conditions, but it does not extend to medical benefits provided by a health insurance policy for other types of care.
What does pre-existing condition mean in insurance?
Health insurance providers can’t refuse to cover you or charge you more because you have a “pre-existing condition,” which is a health problem you had before the start date of your new coverage.
How much does Aflac pay for disability?
Benefits range from $400 to $6,000 per month (subject to income requirements) Total Disability Benefit Periods: 6, 12, 18, or 24 months Injury/Sickness Elimination Periods: 0/7, 0/14, 7/7, 7/14, 14/14, 0/30, 30/30, 60/60, 90/90, 180/180, 0/30, 30/30, 60/60, 90/90, 180/180, 0/30, 30/30, 60/60, 90/90, 180/180, 0/30, 30/30, 60/60, 90/90, 180/
What illness qualifies for short term disability?
Short-term disability insurance is a sort of supplemental insurance that pays out a portion or all of an employee’s salary in the case of a temporary disability. This insurance coverage is typically funded in full or in part by the employer, and to qualify for benefits, the employee must be unable to perform their normal work obligations due to illness or injury.
Despite the fact that this coverage appears to be comparable to workers’ compensation coverage, the two forms of coverage have completely different applications. Workers’ compensation insurance covers illnesses or injuries that occur at work or as a direct result of work activities, whereas short-term disability insurance covers injuries that occur outside of the workplace. In most cases, an employee cannot be eligible for both workers’ compensation and short-term disability benefits for the same incident.
How does short-term disability insurance work?
Short-term disability insurance is designed to cover both the employee and the employer if the employee is unable to work due to illness or accident. An employee can file a claim with a disability insurance company to receive the amount of income stipulated in the policy benefits if a qualifying event occurs. By providing interim money for routine needs, this serves to safeguard the employee from financial difficulties during the recovery time.
Employers profit from short-term incapacity as well. The policy serves to protect the employer’s investment in a prized employee by assuring that the employee may heal and return to work while remaining financially stable. Because disability benefits are paid by the insurance company rather than the employer, the corporation has financial flexibility to hire a temporary substitute without incurring high labor costs.
In some places, such as California and New York, companies are required to provide short-term disability insurance to all employees, in addition to other legal requirements. A state-sponsored disability plan may be available, or companies can acquire one from a commercial carrier. Many standards govern short-term disability in various states, so employers should carefully research any regulations that may apply.
What qualifies for short-term disability and what does short-term disability cover?
An employee must be unable to do their job, as determined by a medical specialist, to be eligible for short-term disability compensation. Benefits may be available for medical problems that keep a person from working for several weeks or months, such as pregnancy, surgery recuperation, or serious illness. Because most states require companies to provide workers’ compensation insurance to all employees, any injuries sustained on the job are often covered by a workers’ compensation policy and thus are not eligible for short-term disability.
While most non-work-related temporary medical illnesses are covered by a short-term disability policy, pre-existing conditions and purposeful and predictable injuries may be excluded (such as those inflicted during the commission of a crime). While employees may be eligible for time off under the Family and Medical Leave Act (FMLA) to care for a sick relative, most short-term disability policies will not pay out if the insured employee is not the one who is sick.
When do short-term disability benefits start?
After a claim is submitted, there is normally a one to 14-day waiting time the elimination period before an employee may start receiving benefits from the insurance. During signup, the waiting period will be indicated in the policy terms. The employee must present a medical form signed by a doctor that explains the illness or damage in most disability claims. The first date of illness or injury is requested on the form, and this date is usually used to start the elimination period.
How long does short-term disability last?
While benefit terms vary by provider, most short-term disability insurance policies pay out for three to six months. Some policies, particularly those linked to a long-term disability policy, may give full-year short-term coverage. A long-term disability policy may be required if an employee requires additional coverage after the initial short-term disability period.
Is short-term disability taxable and how much does it pay?
Depending on whether the insurance was funded with pre-tax or post-tax income, the income from a short-term disability policy may be taxed. The majority of employer-sponsored disability programs are paid pre-tax, either directly from the employer or by payroll deduction from the employee (or a combination of both). Because no taxes were paid on the revenue used to fund the policy, the insurance proceeds would be taxable. A private disability coverage purchased outside of the employer’s benefits plan, on the other hand, would be purchased using after-tax money, and the disability benefits would not be taxed.
Once the elimination period has gone, the actual amount paid out in benefits on a short-term policy is typically 40-70 percent of the employee’s wages during the covered event period. To prevent a tax burden on any disability benefits paid at the end of the tax year, the employee might choose to have taxes deducted from the benefits check (if applicable).