Employees in Chicago and around the rest of Illinois frequently ask if they must first stop working before submitting a claim for long-term disability benefits. Most policies require you suffer a loss of income due to disability to be eligible to receive benefits and satisfy the elimination period. Most policies define “disabled” as including a loss of at least 20% of pre-disability earnings. But most policies do not require you stop working to merely initiate the claim. So the short answer to the question is, most often, you are not disabled until you stop working, but you can initiate the claim before you stop working. A recent case highlighted this nuance.
In Mucciacciaro v. Hartford Life & Accident Insurance Co., No. 2:22-cv-01503, 2023 WL 4014278 (D.N.J. June 15, 2023), Mucciacciaro worked as a dental hygienist and was covered under her employer’s long-term disability insurance plan, insured by Hartford. She began experiencing back pain in 2017, and in 2019 her doctor asked Mucciacciaro’s employer to allow her to work 30 hours per week, which the employer denied. On June 3, 2020, Mucciacciaro gave two-weeks notice she would resign and requested a copy of long-term disability claim forms. Her last day at work was June 17, 2020, and Mucciacciaro listed June 18, 2020 as her first day unable to work in the long-term disability claim. Hartford denied the claim, contending Mucciacciaro was no longer covered under the policy on June 18, 2020 due to ceasing employment. Mucciacciaro appealed, contending she was really disabled since 2019, but Harford upheld the denial on grounds of lost coverage and that Mucciacciaro could not be disabled while still working full-time. Mucciacciaro then sued under ERISA § 502(a).
The United States District Court for the District of New Jersey ruled in favor of Mucciacciaro. The Court explained Hartford’s position was arbitrary and capricious because nobody could ever qualify for long-term disability benefits under its approach. The employee would have to choose between continuing to work and not being disabled, or ceasing work and losing coverage. Surely the policy was not designed to have the effect of making nobody eligible for benefits.
If you have a claim for long-term disability benefits, contact a skilled ERISA long-term disability attorney today.