Change of Definition at 24 Months: What it Means and How to Protect Your Benefits

As someone whose identity had been centered around career-building and physical fitness, you’ve found the past few years an exercise in “coming to grips” with one setback after another. Beginning two and a half years ago, unable to keep up with the demands of your hard-won position, you underwent an interminable series of medical and psychological tests before qualifying for Long-Term Disability benefits under the company’s LTD policy.

While the monthly benefit falls below the salary you’d been earning, you have been able to pay the basic living costs, even keeping up with the mortgage. (Your OHIP has covered your medical visits, while the LTD policy covered the prescription drugs).

For you, the worst part of it all has been the inability to be “busy”. True, you’ve needed to “busy” yourself with filling out endless forms and questionnaires, submitting to intrusive “visits” by investigators assessing your every social media post and shopping outing.

Just as you thought things could not possibly get any worse – they did. You received written notification that your disability benefits are going to be cut off at the two-year mark (meaning April 1 of this year).The letter states that there is a “change of definition” at 24 months.

The language in the letter is hard to understand — you’ve tried to follow all the steps and comply with all the requirements …Is there nothing you can do to protect your benefits?

What is the 24-month Change of Definition?

Every LTD policy has a definition of disability, meaning what conditions must exist for the insured to collect the benefit. In most Canadian LTD policies, that definition changes after the insured has collected benefits for two years.

1. OWN OCCUPATION definition of disability

During the first two years starting from the month benefits have begun you qualify to receive those benefits if it has been verified you have been unable to perform the duties of your own occupation.

2. ANY OCCUPATION definition of disability

Starting from the COD (change of definition date), you are entitled to benefits only if it is proven that you are unable to work at any occupation for which you qualify based on:

• your level of education
• your training
• your work experience 

At a Glance: What Changes at 24 Months?

Most Canadian LTD policies use two different definitions of disability:

• First 24 months – “Own Occupation”
• After 24 months – “Any Occupation”

At 24 months, the insurance company usually changes the standard they use to decide whether you are “disabled enough” to keep receiving benefits. If they decide you no longer meet the new definition, they may stop paying your LTD benefits – even if you still cannot realistically work full-time.

Understanding this change, and how to respond to it, is crucial to protecting your benefits.

What does this change in definition mean for me?

New terminology means new tests and interviews:

• FUNCTIONAL CAPACITY LIMITATIONS

When you first filed for LTD benefits, you needed to provide records from the doctors and therapists who diagnosed your condition and who provided treatment in order to establish a medical basis for your claim. Now, at the 24-month mark, the key is proving, not what your condition is, but to what extent that condition is preventing you for performing the duties of a job. In other words, the insurance company is concerned with the impact of your physical or mental condition, not the details of the condition itself.

• FCE (FUNCTIONAL CAPACITY EVALUATION)

In order to determine the extent to which you are (or are not) able to go back to work, the insurance company may require a wide range of tests, observing whether you are now able to lift, pull, push, and perform repetitive actions, or whether further rehabilitation is likely to improve your capacity. The testing is usually done by an occupational therapist or physiotherapist with specialized training in evaluating disability benefit claimants.

• IME (INDEPENDENT MEDICAL EXAMINATION)

Medical assessments will now be conducted by doctors and therapists chosen by the insurance company. The results will be used not only to evaluate your condition and to decide if the treatments recommended by your own doctors are necessary and appropriate. Your own efforts to recover and return to work will also be carefully observed (with an eye to claiming you are exaggerating your symptoms).

• TSA (TRANSFERABLE SKILLS ANALYSIS)

Unlike the IME, a transferable Skills Analysis represents an assessment, not of your physical or mental condition, but of your “history”, including the education and training you’ve received and your past work experience. The purpose of a TSA is to determine whether, even if you are unable to perform the duties of your latest occupation, you do possess the knowledge and skills that would allow you to qualify for other gainful employment.

• COMPETITIVE EMPLOYABILITY

The underlying purpose of all these evaluations, examinations, and assessments is determining whether you would be able to re-enter the job market as a candidate for available positions. This assessment is designed to judge what the odds are (considering not only your past work experience and training, but your now diminished physical and mental capacity) for employers to want to hire you for any job paying a reasonable wage.

Who pays the bill for all these tests and evaluations?

It is not unusual for the insurance company to require that you cover part or all of the costs of the evaluations.

“I’ve just received a 24-month termination of benefits from my LTD insurance company. My benefits will be cut off in two months. What steps do I need to take?”

Step 1. Review the termination letter:

• What reasons did the insurance company give for cutting off your benefits? Did they claim you’d missed any deadlines for submitting paperwork?  Did they say your social media content suggests you’re not as disabled as you’d claimed? 
• Were any new functional capacity tests or interviews (such as IME or TSA) recommended?
• What steps were noted in the letter for appealing the decision? 
• What deadline was given for an appeal (this is typically 180 days).

Step 2. Understand your rights:

Unpleasant truth –

While the insurance company is required to offer you the right to appeal their decision to stop paying LTD benefits, those vocational experts, medical doctors, therapists, and investigators they hire are far  more likely to side with them than with you.. Insurance companies are in business to make money, and often deny claims in order to save on costs.

To take legal action against your Ontario Long-term disability insurance company, you can:

1. file an internal appeal (after compiling new evidence of disability and submitting to functional capacity tests and reviews)
2. file a lawsuit (if the court rules in your favor, your insurance company would be forced to resume benefits or agree to a settlement) .
   
   

Step 3.  Consult an Ontario LTD lawyer:

An experienced disability lawyer can:

• understand the complexities of “any occupation” arguments
• confront the insurance company’s change-of-definition termination
• build the medical functional proof for your claim
• challenge the surveillance reports and arguments
• represent you in court
• help you make the critical decision of choosing the appeal process or proceeding directly to a lawsuit