Factsheets

Long Term Disability Insurance: Support for Longer Absences from Work

By Lisa Betel, MISt., and Wendy Porch, M.Ed.

If you are living with an episodic disability and need more than a few days off work due to your condition, you need to understand what options are available to support your income. For longer absences, these options may include Long Term Disability insurance (LTD). Often, LTD coverage is provided as part of a group insurance plan through your employer. If you have private life or accident and sickness insurance, you may have LTD coverage as well. You can purchase individual LTD coverage; however, it is typically quite expensive. Generally, LTD policies cover any injury or illness that prevents you from being able to work. Some policies exclude certain illnesses, while others exclude work-related injuries or illnesses.

Not all employers offer Disability Insurance, and there are no legal requirements that mandate it being offered. Disability Insurance is a type of private insurance that provides coverage, in the form of a percentage of an employee’s income, for employees who are unable to work as a result of either an injury or illness. This is usually provided as part of an employee benefit package, although some employers choose not to offer it.

Qualifying for Long Term Disability Insurance (LTD)

Most plans start LTD after other benefits, such as sick leave and Short-Term Disability (STD) benefits, have been exhausted. Many people utilize Employment Insurance (EI) Sickness Benefits after completing STD, but prior to LTD benefits starting. (Most STD benefits last between 6 months and 1 year). Most LTD benefits start 120 days after leaving employment (after EI Sickness Benefits, 15 weeks plus 2 weeks waiting period = 119 days, are exhausted). Your LTD benefit may be for only a specific length of time (i.e., 2 years) or may last until retirement.

Medical documentation is usually required from your doctor in order to qualify for LTD. The required forms will probably ask your doctor to provide a diagnosis and indicate what your prognosis may be and when you might be expected to return to work. Make note of what is required by your doctor. Most companies require that a form be filled in by the doctor and will not necessarily accept a short note in place of the forms. Some doctors may charge a fee for completing these forms and it is the employee’s responsibility to pay any fees charged by the doctor. After the insurance company receives your claim, they may ask for additional information from you, your employer and/or your doctor. They may even ask to interview you, your employer or your doctor over the phone, and ask some additional questions. Once they have reached a decision as to whether or not you qualify for LTD, they will inform both you and your employer.

Exclusions from Group Benefits

Depending on the province or territory, there may be circumstances under which it is possible for an employer to deny or limit an employee access to group benefits based on the existence of a “pre-existing condition”. “Pre-existing conditions” are illnesses or health conditions that the employee was living with before signing up for the insurance plan. However, the laws that apply to this vary from province to province. If this is a worry for you, it is recommended that you access legal advice related to your specific situation.

Once on Long Term Disability Insurance

Most LTD benefits pay 50%-70% of your previous income. LTD policies require the insurance company to pay an ongoing amount, usually in a monthly payment. Benefits will be paid either by cheque or by direct deposit, if the appropriate arrangements have been made. Most do not have indexing for the rate of inflation. If during employment you paid 100% of the LTD premium cost, then your LTD income is not taxable, but otherwise your LTD is considered to be taxable income. Most contracts also have a provision that any income support received from other sources, such as Canada Pension Plan Disability (CPP-D) is deducted dollar-for-dollar from your LTD income. If you are awarded CPP-D benefits, the insurance company gets to deduct the amount of the CPP-D benefit from the amount of LTD benefit it is paying to you. Since CPP-D benefits save the insurance company money, many policies require that you apply for CPP-D benefits, and some even require you to appeal if your claim is initially denied.

The insurance company will expect to communicate with you (the employee) and your healthcare providers regarding your recovery and expected return to work date. The insurance company will also expect you to undertake appropriate medical treatment for your condition and that you are willing to undergo independent medical exams at their request. Anyone receiving benefits is expected to participate in insurance company provided vocational rehabilitation programs.

Restrictions on Benefits

When receiving LTD benefits there may be restrictions on the kinds of activities you can undertake, particularly related to earning any other kind of income. Benefits may not be paid if you are not receiving appropriate treatment as recommended by your treating physician; are not participating in an insurance provider-approved rehabilitation program; or are on a leave of absence, strike or lay-off, except where the insurance provider has specifically agreed to the continuation of coverage or may be required to continue it by law.

Depending on your LTD plan, you may not be allowed to complete any work for wage or profit except as approved by the insurance provider, nor can you receive money from other income support sources without reporting it. Benefits are usually not paid while you serve a prison sentence or are confined in a similar institution. Benefits may also cease if you are absent from Canada due to any reason, unless you have received written agreement from the insurance provider in advance to pay benefits during this period.

There may be other restrictions as well, so it is important to check the details of your specific LTD plan.

Returning to Work

The insurer will expect you to return to your own occupation as soon as it is safe and healthy for you to do so. While you are receiving benefits, the insurer will talk to you about returning to work at the appropriate time. If it becomes apparent that you will not be able to return to your own occupation, you will be expected to consider any reasonable offer of modified work with your employer and/or participate in any training required to qualify for an alternate occupation.

Typically, the insurer pays your benefits for two years after you become disabled so long as you are unable to do the job you were doing when you became disabled. After two years, in order to continue receiving benefits, the evidence must show that you are unable to do any job for which you are reasonably suited. If you are unable to work in any reasonable capacity, the insurance company will want to see proof, in the form of medical forms or reports from your doctors. Benefits are usually payable until you turn 65, so long as you continue to meet the policy requirements.

Recurrent Claims

The process for re-applying for insurance following a relapse in your condition varies across employers and insurance providers. Some insurance contracts have “recurrent claim clauses”. These clauses may streamline the re-application process so that if you have a relapse of an established health condition that causes you to have to go back on disability insurance, you may be able to fill in less paperwork and/or need less documentation from your doctor. It is important to note that not all insurance contracts have recurrent claims causes, so to find out ask your HR department and/or insurance company for more information about your insurance.

A Note about Privacy

Details regarding your diagnosis, medical history or medical conditions are not to be shared with your employer unless you have expressly consented to this being shared, usually through signing a form that says so. Read the forms given to you by the insurance provider carefully so that you know who, and under what circumstances, your medical information might be shared.

Relevant Resources:

• A Guide to Disability Insurance by the Canadian Life and Health Insurance Association
• Le Guide sur l’assurance invalidité par l’Association canadienne des compagnies d’assurances de personnes.
• What You Should Know About Disability Insurance by the MS Society of British Columbia
• Insurance and Your Rights by the Canadian Diabetes Association

PLEASE NOTE: This fact sheet was developed as an information resource only. All benefits and insurance plans are different so for the details of your plan, please check with your HR department, your Supervisor/Manager, or your union representative. If you require advice regarding your specific circumstances, seek legal assistance.

Paid Sick Leave and Short-Term Disability Insurance: Financial Supports for Short Term Absences

By Wendy Porch, M. Ed.

If you are living with an episodic disability and need more than a few days off work due to your condition, you need to understand what options are available to support your income. For shorter term absences, these options may include paid sick leave and/or short-term disability insurance.

Paid Sick Leave

Some companies offer their employees sick leave with pay, but this does not happen consistently nor is it a legal requirement for employers. Only two provinces in Canada mandate paid sick leave. Prince Edward Island mandates employers to provide one day of paid sick leave, only for employees who have at least five years of continuous employment with the same company. Quebec mandates two days of paid sick leave per year, but only after 3 months of employment. (For more information visit the Canadian Labour website.

The unfortunate reality is that many people in Canada are not eligible for paid sick leave. According to the Conference Board of Canada’s Report, Disability Management – Opportunities for Employer Action, only 1/3 of employees between the ages of 18-24 have paid sick days. Older workers are also vulnerable as both young and older workers tend to have jobs in the service industry and/or work part-time; these are work contexts that typically do not offer paid sick leave.

The amount of sick leave with pay employees may be entitled to will differ from workplace to workplace as it is provided privately by each individual employer. To find out how much paid sick leave you are entitled to, check with your Human Resources department or direct manager. If you do have paid sick leave, it is usually expected that you would exhaust your paid sick leave before moving on to other sources of income, such as Short-Term Disability Insurance, if it is available.

Protected Leave or Unpaid Leave

There are laws in Canada that allow you to have time off work without pay, under certain circumstances, without putting your job in jeopardy. Read the Forum’s Fact Sheet on Unpaid Sick Leave for more information.

Short Term Disability Insurance (STD)

Not all employers offer Disability Insurance, and there are no legal requirements that mandate it being offered. Disability Insurance is a type of private insurance that provides coverage, in the form of a percentage of an employee’s income, for employees who are unable to work as a result of either an injury or illness. This is usually provided as part of an employee benefit package, although some employers choose not to offer it. To find out if you have access to any type of disability insurance ask your human resources department or your union representative.

There are two basic types of disability insurance: Short Term Disability Insurance and Long-Term Disability Insurance. Only Short-Term Disability Insurance is described in this fact sheet.
Short Term Disability Insurance (STD) provides a percentage of a person’s income in the event that they are temporarily disabled. Most STD plans pay between 9 weeks and 52 weeks of coverage, with many paying for about six months. Coverage may be between 55% – 70% of a person’s existing salary.

Qualifying for Short Term Disability Insurance

If an employer does offer STD, there may be a waiting, or “qualifying period” or it might start right away. STD often takes over after paid sick leave runs out. Medical documentation is usually required from your doctor in order to qualify for STD. The necessary forms will probably ask your doctor to provide a diagnosis and indicate what your prognosis may be and when you might be expected to return to work. Make note of what is required by your doctor. Most companies ask that a form be filled in by the doctor and will not necessarily accept a short note in place of the forms. Some doctors may charge a fee for completing these forms and it is the employee’s responsibility to pay any fees charged by the doctor. After the insurance company receives your claim, they may ask for additional information from you, your employer and/or your doctor. They may even ask to interview you, your employer, or your doctor over the phone, and ask some additional questions. The insurance company will take a period of time to determine if you do indeed qualify for short-term disability insurance. Once they have reached a decision, they will inform both you and your employer.

Once on Short Term Disability Insurance:

Benefits will be paid either by cheque or by direct deposit if the appropriate arrangements have been made. The insurance company expects to communicate with the employee and related healthcare providers regarding their recovery and their expected return to work date. The insurance company also expects that the employee will undertake the appropriate medical treatment for their condition and will be willing to undergo independent medical exams if requested by the insurance provider. As well, anyone receiving benefits is expected to participate in insurance company provided vocational rehabilitation programs.

Restrictions on Benefits:

When receiving STD benefits there may be restrictions on the kinds of activities you can undertake, particularly related to earning any other kind of income. Depending on your plan, you may not be allowed to:

• leave the country, unless you have sought permission from the insurance provider
• receive money for any work unless it has been approved by the insurance company
• receive money from other income support sources without reporting it. Other sources of income, like CCP, Employment Insurance or provincial income support programs will usually be deducted dollar for dollar from your STD benefits, and/or
• receive benefits while you are incarcerated.

There may be other restrictions as well, so it is important to check the details of your specific STD plan.

Returning to Work:

Employees are usually assigned a case manager who will communicate with the employee and the health care providers about when and how to return to work. A ‘Return to Work Plan’ will probably be developed that may include modified work duties and/or a gradual return to work, starting with a few hours and progressing over time to regular hours. There may be other strategies put into place to help ease the transition back to work. Return to work plans are highly individualized so your plan might not be the same as someone else’s plan. If you are not able to return to work within the time period covered by STD benefits, you will have to examine other alternatives for income supports. These may include long term disability benefits if they are offered by your employer.

A Note about Privacy:

Details regarding your diagnosis, medical history or medical conditions are not to be shared with your employer unless you have expressly consented to this being shared, usually through signing a form that says so. Read the forms given to you by the insurance provider carefully so that you know who, and under what circumstances, your medical information might be shared.

PLEASE NOTE: This fact sheet was developed as an information resource only. All benefits and insurance plans are different so for the details of your plan, please check with your Human Resource department or your union representative. If you require advice regarding your specific circumstances, seek legal assistance.

Download a pdf version of this fact sheet.

Sick Leave: An Important Support for Employees with Episodic Disabilities

By Wendy Porch, M. Ed.

Living with an episodic disability can mean having to take time off work. Determining how much time you are entitled to, however, can be a tricky business. This article will outline the basics in terms of sick leave in Canada. How much you are entitled to is dependent upon on a number of factors, such as whether or not you are entitled to unpaid and/or paid sick leave. There are other kinds of leave available as well, such as bereavement and compassionate care leave but this article only focusses on sick leave.

What is Sick Leave?

In simple terms, sick leave is time off work so that you can recover from illness. In Canada, the amount of time you are entitled to varies from province to province. There are two types of sick leave: unpaid leave – which everyone in your province or territory is entitled to as long as they meet the qualification requirements outlined below – and paid sick leave which varies from employer to employer.

Unpaid Sick Leave

Unpaid sick leave is generally outlined under provincial and territorial employment standards legislation. This legislation sets out the amount of unpaid sick leave that employees in those provinces are eligible to take, without penalty from their employer. The table below outlines the basics in Canada regarding unpaid sick leave. In many cases, there is a qualification period. This means that the employee must have worked for the same employer for a consecutive set period of time before they are eligible for unpaid sick leave. In most cases, unpaid sick leave entitlement cannot be carried over into another year. In many cases employers may be allowed to ask for documentation about the need for the leave if it starts to become more than a few days. These requirements are not outlined in the table below, so check the legislation itself for this information. The legislation is linked for each area below.

Paid Sick Leave

In addition to unpaid sick leave, some employees may have access to paid sick leave. This means that they can take time off and still be paid. Paid sick leave is normally set out in either a collective agreement (for unionized workplaces), your employment contract or in workplace policies. If you aren’t sure what kind of paid sick leave you are entitled to, ask your union steward, human resources representative or manager for details.

Additional Types of Leave

Under provincial and territorial legislation, employees are also eligible for a range of other unpaid leave types. These include bereavement leave, which is usually granted to an employee who has recently lost a close family member, and compassionate care leave, which allows employees to take time off work to care for a seriously ill family member. These types of leave are not covered in this article, but should you require more information it is recommended that you consult the employment standards legislation in your location, and/or with a local human resource professional.

Extended Sick Leave Combined with Income Supports

Other types of leave that combine extended time off with income supports include short-term disability (STD) and long term-disability (LTD) coverage and Employment Insurance Sickness Benefits. STD and LTD coverage vary from person to person according to an individual’s benefits package. Not everyone is eligible. EI Sickness Benefits are offered through Employment Insurance in Canada to people who have worked and paid into the program and who meet the eligibility requirements.

Resources:

• “Paid sick leave has its advantages” – article by HR InfoDesk:
  (To access this article, you will need to create a temporary login with HR InfoDesk – free trial)
• “Leaves of Absence from Work” – article by WorkersHelp.ca
• “Employment Insurance Sickness Benefits” – overview by the Government of Canada

Province/Territory/ Jurisdiction	Relevant Sick Leave Legislation	How Much Unpaid Sick Leave am I Entitled to?
Federal – includes Canadian Government and Crown Corporations	Canada Labour Code	After 3 months of consecutive employment, entitlement is up to 12 weeks of leave due to illness or injury
Alberta	Alberta Employment Standards Code (PDF)	5 unpaid days of leave in a calendar year for sick leave, or for family care responsibilities after 90 days of employment with the same employer.
British Columbia	British Columbia Employment Standards	5 unpaid days of leave relating to the care or health of a child in the employee’s care or another member of the employee’s immediate family.
Manitoba	Manitoba Employment Standards Code	After 30 days of consecutive employment, entitlement is 3 days per year to attend to personal illness or a family matter
New Brunswick	New Brunswick Employment Standards	After 90 days of consecutive employment, entitlement is 5 days of unpaid sick leave each year
Newfoundland and Labrador	Newfoundland and Labrador Labour Standards Act	After 30 days of consecutive employment, entitlement is 7 days per year to attend to illness or family responsibilities. (if the leave lasts longer than 3 days, employers can request documentation from a medical practitioner about the need for the leave)
Nova Scotia	Nova Scotia Labour Standards Code	Entitlement is 3 days per year to attend to illness or care for a sick child. There is no qualification requirement.
Ontario	Ontario Employment Standards Act	Entitlement is 10 days in a calendar year of personal emergency leave for anyone who works for an employer with at least 50 employees. This leave can be used to attend to: urgent family matters, illness, medical emergency or death of a close relative. There is no qualification requirement.
Prince Edward Island	Prince Edward Island Employment Standards Act	After a period of 6 months of consecutive employment, entitlement is 3 unpaid sick days and 3 days of family leave to attend to family issues.
North West Territories	Not legislated	n/a
Nunavut	Not legislated	n/a
Quebec	An Act Respecting Labour Standards	After 3 months of consecutive employment, entitlement is up to 26 weeks in a 12 month period if sick or recovering from an accident.
Saskatchewan	Saskatchewan Employment Act	After a period of 13 weeks of consecutive employment, entitlement is 12 weeks in a period of 52 weeks if the illness or injury is serious. If the illness or injury is not considered serious, leave entitlement cannot exceed 12 days in any 52-week period.
Yukon	Yukon Employment Standards Act	Entitlement 1 day per month of employment per calendar year (1 day per month, up to 12 days per calendar year). There is no qualification requirement.