Employees in Chicago with long-term disability insurance often wonder whether they can still claim disability benefits after their employment terminates. In some circumstances you can, and in others you cannot. Here are a few things to consider if you make a claim under the employer’s long-term disability insurance group policy after your employment terminates.
Why Did Your Employment Terminate?
Often individuals stop work because they are disabled, and did not know there was a group policy insuring this event. Other times, the employer terminated you for performance issues or absence caused by your disability. Other times the disability disqualifies you from doing the job, or renders you unable to do so safely. These are good bases to still make a claim under the long-term disability policy.
Can You Demonstrate Disability Before Your Employment Terminated?
Group long-term disability insurance policies enforced under ERISA § 502(a) all have clauses requiring you be actively at work at the time of becoming disabled, and that you suffer an income loss. Those two events do not always have to be simultaneous, though. For example, you might be disabled from performing your occupation before your employment terminates, it terminates as a result, and you then suffer the income loss. You must be able to prove up, with credible medical documentation, that you had the impairments to a significant enough degree to cause disability before your employment terminates.
This was the issue in Bernard v. Kansas City Life Insurance Co., No. 20-1593, 2021 WL 1244403 (8th Cir. Apr. 5, 2021). Bernard claimed disability due to addiction to fentanyl. When his employer learned of the use, it terminated him because he could not safely work as a nurse anesthetist while using fentanyl. The insurance company denied him claim, arguing he successfully performed the job until his termination and was not disabled until after. The Eighth Circuit disagreed, finding the insurer’s argument that Bernard would be disabled for the same reason after his employment terminated irreconcilable with its argument he was not disabled before, while having the same problem that caused him to lose his job.
How Long Has It Been Since You Left the Employer?
If you wait too long after your employment ends to make the claim, you might lose your rights. All policies have clauses requiring by when you provide the insurer notice and proof of claim. They vary, but can be pretty short. Best practice is to give immediate notice.
If your employment ended because of disability and you need to make a claim, contact an experienced ERISA long-term disability lawyer for help.