Did you know that under most Group Disability Policies a disabled employee has to be totally and completely disabled for 112/119 days to satisfy the elimination period for Long Term Disability Benefits? Understanding your contract wording is important, especially in this situation.
I had an employee who was able to come back to work part time during the elimination period. Allegedly, he did not understand that everyday he came back to work was added onto his elimination period. So instead of the traditional 119 day elimination period and disability benefits beginning, let’s say there was 7 days added onto his elimination period. Even if an employee returns to work only a couple hours a day, it is counted as a full day. Had the employee come back to work for an extended period without any days of interruption, could be 14 days or in the RBC Insurance Policy 30 days, the elimination period would of started over. He would of had to wait the full 119 days again. Neither Short Term Disability or Employment Insurance will pay another 119 days for the same disability. This could leave an employee with no money for this time period.
If the Doctor deems that the employee can return to work, it isn’t like the employee can refuse. This particular situation, the person was put on modified duties and at some point the employer was no longer able to accommodate the employee or the employee’s disability worsened.
I will note that these situations do not come up that often. However, it might be something to think about if you have some key employees where having them return to work part time is better than not having them there at all. This is where a Residual Benefit comes in handy. I will use RBC Insurance’s definition of Residual:
The employee does not have to be totally disabled during the elimination period. Disabled in this case means:
- is limited from performing the material and substantial duties of his or her occupation; and
- has a 20% or more loss in indexed monthly earnings due to the same sickness or injury.
The Residual Definition allows employees to return to work in a reduced capacity and each day counts towards their elimination period.
Of course, adding this definition to your Group Benefit Policy does cost more, because it increases the risk for the Insurance Company.
Rate shouldn’t always be the deciding factor. Does your broker understand the contract they sold you?
Glendinning Insurance Services, your Resource Specialist.
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