About once a month we get contacted by an employee who is out of disability but is being offered a severance package to leave the company. The question arises: what about my disability claim with the company's disability insurance company?
The answer is that your disability claim may well end with the signing of the agreement if you are not careful. It does not have to be that way.
In almost every situation your disability claim is being managed by a big insurance company. (Aetna, Unum, MetLife.) What we see happening is that your employer's corporate lawyers draft boilerplate severance agreements which purport to extinguish "all claims" you may have against the company.
Whether or not your employer INTENDS to extinguish your disability claim, you can bet that the disability insurance company's lawyers (different from your company's lawyers and, frankly, with no allegiance to your employer at all) will argue that your disability claim is over.
Here's the consumer tip:
If you are presented with a severance package, you may need to consult with TWO sets of lawyers (unfortunately.) First, an employment lawyer familiar with severance agreements. You may also need to consult with an experienced ERISA disability lawyer to get an opinion as to whether signing the agreement leaves you vulnerable to having your disability payments vanish.