When an employee goes on long-term disability (LTD), they typically stop working and begin receiving monthly benefits from an insurance company to partially replace their lost income due to a serious medical condition.
This transition can be stressful and complicated, involving medical documentation, employer policies, and insurance regulations. Understanding how the process works can help protect your rights and financial stability during this difficult time. For more information, contact a Virginia long-term disability lawyer.
The Basics of Long-Term Disability
Long-term disability insurance is designed to provide income replacement—usually between 50% to 70% of your salary—when a medical condition prevents you from working for an extended period.
These benefits generally begin after a short-term disability period or an “elimination period,” which is often 90 to 180 days after you stop working. LTD coverage is often provided as part of an employee benefits package, though some people purchase it privately.
The plan’s terms, including the definition of “disability,” the benefit amount, and how long you can receive payments, are detailed in a document called the summary plan description (SPD) or the full insurance policy.
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How to Qualify for LTD Benefits
To qualify for long-term disability benefits, you must prove that your medical condition prevents you from performing your job duties. Most LTD policies have two phases:
- “Own occupation“ period: For the first 24 months, you must show you cannot perform your specific job.
- “Any occupation“ period: After 24 months, many policies shift to require that you prove you cannot perform any job for which you are reasonably suited by education, training, or experience.
You’ll need thorough medical records, doctor’s opinions, and possibly independent medical examinations to support your claim. Insurance companies often require periodic updates to ensure you still qualify.
What Happens to Your Job?
Whether or not your employer holds your position during your LTD leave depends on company policies and employment laws.
The Family and Medical Leave Act (FMLA) may protect your job for up to 12 weeks, but beyond that, there’s no guarantee. Some employers may accommodate a return to work with modifications or hold your position longer, but many do not.
Eventually, if it becomes clear that you will not return, your employer may legally terminate your employment. While this might sound harsh, it doesn’t typically affect your LTD benefits—those are tied to the insurance policy, not your active employment status.
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Continued Benefits and Other Impacts
Here are some important considerations once you’re receiving LTD benefits:
- Health insurance: If you lose your job, you may lose your employer-sponsored health insurance. You may qualify for COBRA coverage or need to find a policy on the marketplace.
- Retirement contributions: Most employers stop contributing to retirement accounts after employment ends. Some LTD policies offer retirement contribution benefits, so check your plan details.
- Social Security Disability Insurance (SSDI): Many LTD policies require you to apply for SSDI after being on benefits for a certain period. If you qualify for SSDI, your LTD benefits may be reduced by the amount you receive from Social Security.
- Taxes: Whether your LTD benefits are taxable depends on how your premiums were paid. If your employer paid the premiums, the benefits are usually taxable. If you paid with after-tax dollars, they are typically tax-free.
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The Role of the Insurance Company
Insurance companies do not simply “accept” your medical diagnosis—they evaluate whether it meets their definition of disability. They may request:
- Ongoing medical updates
- Surveillance or social media checks
- Vocational assessments
- Independent medical exams
Insurance companies have a financial incentive to deny or terminate claims, so it’s important to understand your rights and responsibilities under your policy. Even legitimate claims are often denied for insufficient evidence or procedural errors.
Common Pitfalls and How to Avoid Them
Many LTD claims are denied for reasons that could have been avoided. Here are common mistakes and how to avoid them:
- Not understanding the policy: Carefully read the summary plan description or full policy. Know what the insurance company considers a “disability.”
- Insufficient medical evidence: Vague doctor’s notes like “patient is disabled” are not enough. You need detailed medical records showing limitations and how they affect your ability to work.
- Ignoring deadlines: Insurance companies often impose strict deadlines. Missing one can jeopardize your benefits.
- Use of social media: Insurance companies may monitor your online activity for evidence that contradicts your claim. Be cautious about what you post.
- Failing to appeal properly: If your claim is denied, you have the right to appeal—but you must do it right. The appeal is often your last chance to add new evidence before going to court.
What Happens If Your LTD Benefits Are Denied?
If your LTD benefits are denied or terminated, you usually have the right to file an appeal. Under the federal law known as ERISA (Employee Retirement Income Security Act), your appeal must go through the insurance company’s internal review process before you can sue.
This appeal is crucial because the court will mostly rely on what’s in the administrative record at the time of the appeal.
An experienced disability attorney can help you build a strong appeal with the right medical and vocational evidence to support your case. They’ll also make sure deadlines are met and communications with the insurer are handled professionally.
When to Talk to a Lawyer
Many people contact our Virginia long-term disability lawyers before they file their initial claim. Doing so can help you save time, avoid denials, and plan your future.
It’s wise to consult with an attorney if:
- Your LTD claim is denied or terminated
- You’re asked to apply for SSDI
- Your employer is pressuring you to return before you’re ready
- You’re unsure what documents to submit or how to appeal
An experienced long-term disability lawyer can level the playing field, especially when dealing with large insurance companies. They know how to navigate ERISA laws, gather persuasive medical evidence, and present your case effectively.
Get Help from the Experts at BenGlassLaw
Now you know what happens when an employee goes on long-term disability. At BenGlassLaw, we’ve helped hundreds of people in your situation stand up to insurance companies and protect their rights. Whether you’re preparing your initial LTD application or fighting a denial, we can guide you through every step of the process.
Call us today to schedule your free consultation. Let’s talk about how we can help you get the benefits you deserve. For more information, visit our FAQ page.
Call or text (703) 591-9829 or complete a Free Case Evaluation form