Blogs

If your long-term disability benefits have been denied, delayed or cut off in Alberta, the insurer’s decision is not necessarily the final word.

An insurance company’s denial letter represents its position on your claim. It is not a court judgment, and it does not necessarily mean you have failed to satisfy the legal requirements for benefits. Denials can often be challenged with stronger medical evidence, vocational evidence and a careful review of the insurance policy.

However, strict deadlines may apply. Waiting too long while attempting to handle the claim yourself could affect your right to sue.

What Is a Long-Term Disability Claim in Alberta?

Long-term disability benefits are most commonly provided through an employer’s group insurance plan. Some people also purchase individual disability insurance directly from an insurer.

LTD insurance is intended to replace a portion of your income when an illness or injury prevents you from working for an extended period. Depending on the policy, benefits may begin after an elimination or qualifying period, often after short-term disability benefits or employer-paid sick leave have ended.

Many policies pay approximately 60 to 70 percent of the claimant’s pre-disability earnings, subject to the policy’s benefit formula, maximum monthly benefit and provisions dealing with other income.

Your entitlement depends primarily on:

• The wording of your insurance policy;
• The policy’s definition of disability;
• Your medical condition and resulting functional limitations;
• The duties and demands of your occupation;
• Your education, training and work experience;
• Whether any exclusions or limitations apply; and
• Whether you have complied with the policy’s notice and proof-of-claim requirements.

Alberta claimants commonly deal with national insurers such as Manulife, Sun Life, Canada Life, Desjardins and RBC Insurance. Each insurer has its own claims procedures, medical review practices and internal appeal process.

Common Reasons Alberta LTD Claims Are Denied

Insurance companies deny or terminate long-term disability claims for many stated reasons.

The insurer says the medical evidence is insufficient

An insurer may conclude that the medical records do not establish that you meet the policy’s definition of disability.

This does not necessarily mean your condition is not serious or that your doctor has done anything wrong. Medical records prepared for treatment purposes may not clearly describe your functional restrictions, the demands of your occupation or why you cannot reliably perform those duties.

A successful challenge may require more detailed evidence from your treating doctors, specialists or other healthcare providers.

The insurer’s medical consultants disagree with your doctors

Insurers frequently arrange internal medical reviews or obtain opinions from physicians and other consultants they retain.

Those consultants may interpret the records differently from your treating providers. They may also conclude that you can return to work, even without examining you directly.

Their opinions are evidence, but they are not automatically decisive. They can be challenged through treating-provider evidence, independent assessments and the other medical and occupational evidence in the case.

The definition changes from “own occupation” to “any occupation”

Many group LTD policies initially provide benefits when you cannot perform the essential duties of your own occupation.

After a defined period—commonly 24 months—the test may change. You may then have to establish that you cannot perform another occupation for which you are reasonably suited by education, training or experience.

This change is one of the most common points at which LTD benefits are terminated.

The insurer relies on a pre-existing condition exclusion

Some policies exclude or limit claims connected to a medical condition for which the claimant received treatment, medication, consultation or investigation during a specified period before the insurance coverage took effect.

The precise wording matters. Whether an exclusion applies may depend on the timing and nature of the earlier treatment, the cause of the later disability and the connection between the prior condition and the current claim.

The insurer describes the condition as “subjective”

Claims involving chronic pain, fibromyalgia, chronic fatigue syndrome, migraine disorders, depression, anxiety, PTSD and other conditions are sometimes challenged because there may be no single laboratory test or diagnostic image that measures the severity of the disability.

A condition does not have to be visible on an X-ray or blood test to be disabling.

These claims are commonly proven through a combination of medical history, clinical findings, treatment records, medication history, specialist evidence, reported symptoms, functional restrictions and evidence about the claimant’s ability to function consistently over time.

The insurer relies on surveillance or social media

An insurer may conduct physical surveillance or review publicly available social media activity.

It may then argue that a brief activity shown in a photograph or video is inconsistent with the claimant’s reported limitations.

The legal issue is not simply whether a person can perform an isolated activity. The more important question is often whether the person can perform the material duties of an occupation reliably, safely, repeatedly and according to a regular work schedule.

The insurer says a deadline was missed

Insurance policies may contain deadlines for giving notice, submitting proof of claim, appealing a decision or commencing legal proceedings.

The consequences of a missed deadline depend on the policy, the applicable legislation and the particular facts. Because some deadlines may have serious consequences, legal advice should be obtained promptly.

None of these reasons is automatically fatal to a claim. Each is a position that should be assessed against the policy wording, the medical evidence and the applicable law.

The “Own Occupation” to “Any Occupation” Trap

The change from the own-occupation test to the any-occupation test is a critical stage in many Alberta LTD claims.

During the own-occupation period, the issue is generally whether your illness or injury prevents you from performing the essential duties of the occupation you held when you became disabled.

When the test changes, the insurer may argue that you can perform a different occupation, even though you remain unable to return to your former job.

The phrase “any occupation” does not ordinarily mean literally any job at all. The policy will usually require consideration of occupations for which you are reasonably suited by factors such as your:

• Education;
• Training;
• Work experience;
• Transferable skills;
• Physical and cognitive abilities; and
• Functional limitations.

The precise policy wording must always be reviewed.

Insurers may obtain a transferable-skills analysis or vocational assessment identifying alternative occupations they believe the claimant can perform. These reports should not be accepted uncritically.

Important questions include:

• Do the proposed occupations genuinely match the claimant’s education and experience?
• Can the claimant perform the work on a predictable and sustained basis?
• Are the physical, cognitive and psychological demands compatible with the medical restrictions?
• Does the proposed work offer a realistic level of compensation?
• Are the occupations genuine and reasonably available, rather than merely theoretical job titles?

Claimants approaching the change-of-definition date should expect closer scrutiny, requests for updated medical information and, in some cases, surveillance, functional testing or a medical examination arranged by the insurer.

Mental Health Disability Claims in Alberta

Depression, anxiety disorders, PTSD, bipolar disorder and other psychiatric conditions can prevent a person from maintaining the concentration, stamina, judgment, emotional regulation and reliability required for employment.

The absence of a visible physical injury does not make a mental health disability less real.

Insurers may nevertheless question these claims where treatment has been limited, the clinical notes contain brief descriptions, or the claimant is still capable of some household, family or social activity.

A mental health LTD claim may be supported by evidence addressing:

• The diagnosis and history of the condition;
• The frequency and severity of symptoms;
• Concentration, memory and decision-making difficulties;
• Motivation, pace and persistence;
• Sleep disruption and fatigue;
• Panic attacks or trauma-related symptoms;
• Medication effects;
• The ability to interact with coworkers, clients or supervisors;
• Attempts to return to work;
• The course of treatment; and
• Whether the claimant could function predictably throughout a normal workweek.

The focus should be on functional capacity, not simply the diagnostic label.

Alberta’s Two-Year Limitation Period

A claimant whose LTD benefits have been denied or terminated must be alert to Alberta’s limitation laws.

Under Alberta’s Limitations Act, a claimant will generally have two years from the date they first knew, or in the circumstances ought to have known:

1. That the injury or loss had occurred;
2. That it was attributable to the insurer’s conduct; and
3. That the circumstances warranted commencing a legal proceeding.

The precise date on which the limitation period begins can be legally complex and fact-specific. It should not be assumed that the deadline necessarily runs from the date of illness, the date the application was submitted or any other date without reviewing the denial correspondence, the policy and the history of the claim.

What Halter v. Standard Life Means for Alberta LTD Claims

In Halter v. Standard Life Assurance Co. of Canada, 2014 ABCA 57, the insurer advised the claimant that his LTD benefits would terminate. The claimant continued to provide information in support of his claim but did not commence his lawsuit until several years later.

The Alberta Court of Appeal upheld the dismissal of the action as statute-barred.

The Court also rejected the argument that every missed monthly disability payment created a new or “rolling” limitation period. The fact that LTD benefits would have been payable monthly did not allow the claimant to recover later monthly payments after the underlying denial had become statute-barred.

The practical lesson is important: a claimant should not assume that continued correspondence, further medical submissions or an internal appeal will preserve the right to sue.

An Internal Appeal Does Not Automatically Stop the Clock

An insurer’s internal appeal process is not a court proceeding and is not an independent adjudication. The same insurance company that denied the claim is being asked to reconsider its decision.

However, pursuing an internal appeal does not automatically suspend or extend the limitation period.

There is also generally no universal requirement that every internal appeal be completed before a lawsuit can be commenced. Whether to appeal, commence litigation or take both steps strategically should be assessed with a lawyer.

Insurer Limitation Notices May Also Matter

Alberta insurance regulations impose requirements concerning written notice of applicable limitation periods.

Whether an insurer complied with those obligations, and the legal effect of any non-compliance, can become relevant to the limitation analysis. However, a claimant should never assume that a missing, unclear or incorrect notice has automatically extended the deadline.

The safest course is to obtain legal advice immediately after benefits are denied or terminated.

Surveillance and Social Media: What to Expect

LTD insurers may retain private investigators to observe claimants in public places. They may also examine publicly available social media posts.

Surveillance can include footage of a claimant:

• Driving;
• Shopping;
• Attending appointments;
• Performing yard work;
• Exercising;
• Participating in family activities; or
• Attending social or community events.

Surveillance does not necessarily mean that the insurer suspects fraud. It is one of the tools insurers use to compare a claimant’s observed activity with the limitations reported in the claim file.

A short video rarely tells the whole story. It may not show:

• Pain experienced during or after the activity;
• The need for breaks;
• The amount of assistance required;
• Reduced speed or endurance;
• Symptoms that arise later;
• The difference between a brief personal activity and sustained employment; or
• Whether the activity can be repeated reliably over a full workday and workweek.

Claimants should be accurate and consistent when describing their abilities. They should not exaggerate their restrictions, but they should also avoid minimizing the effect of their symptoms.

Independent Medical Examinations

An LTD insurer may ask a claimant to attend a medical, psychological, psychiatric, functional or occupational assessment.

Although these assessments are often called independent medical examinations, the assessor is generally selected and paid by the insurer.

That does not mean the resulting opinion is automatically biased or incorrect. It does mean that the report should be evaluated carefully, particularly where it conflicts with the opinions of treating healthcare providers.

Before attending an insurer-arranged examination, a claimant should understand:

• What type of assessment is being requested;
• Who will conduct it;
• What records have been provided to the assessor;
• Whether the policy authorizes the examination;
• What information or testing will be involved; and
• How the insurer may use the resulting report.

A claimant should cooperate with reasonable policy requirements, but legal advice may be appropriate where the request is unusual, overly broad or repeated.

What To Do If Your Alberta LTD Claim Is Denied

1. Obtain the denial letter

Request a written decision clearly explaining:

• Why the claim was denied or terminated;
• The policy provisions relied upon;
• The medical or vocational evidence considered;
• The internal appeal deadline; and
• Any stated limitation period.

2. Request the claim file

Ask for a copy of the insurer’s claim file, including relevant medical reviews, vocational reports, surveillance material and other documents relied upon in making the decision.

The insurer may not immediately provide every internal or privileged document, but the request can help identify the evidence and reasoning behind the denial.

3. Record every potential deadline

Keep a written record of:

• The date of the denial or termination letter;
• The date benefits stopped;
• The internal appeal deadline;
• Any deadline stated in the policy; and
• The potential deadline for commencing a lawsuit.

Do not assume the internal appeal deadline and the legal limitation period are the same.

4. Continue appropriate medical treatment

Continue medically recommended treatment where reasonably available and appropriate.

Gaps in treatment can be relied upon by insurers, although the significance of a gap will depend on the circumstances. There may be legitimate explanations, including cost, side effects, lack of access, treatment fatigue or a medical opinion that further treatment is unlikely to help.

5. Ask your healthcare providers to address function

A diagnosis alone may not establish disability.

Medical evidence is more useful when it explains how the condition affects activities such as:

• Sitting, standing or walking;
• Lifting and carrying;
• Concentration and memory;
• Pace and persistence;
• Stress tolerance;
• Attendance and reliability;
• Interaction with others; and
• The ability to sustain activity throughout a workday and workweek.

6. Be careful before returning to work

A genuine and medically supported return-to-work attempt may provide valuable evidence. However, an unsuitable or premature return can worsen the claimant’s condition and create additional disputes.

Before agreeing to a return-to-work plan, consider whether:

• The treating providers support it;
• The proposed duties are clearly defined;
• Appropriate accommodations are in place;
• The hours and workload are realistic; and
• The plan explains what will happen if the attempt is unsuccessful.

7. Do not sign a release without legal advice

An insurer may offer a lump-sum settlement in exchange for a full and final release.

Once signed, a release will ordinarily end the claimant’s right to seek further benefits under the policy. The value of the future benefit stream, offsets, taxes, legal risks, medical prognosis and other terms should be considered before accepting an offer.

8. Speak with an Alberta long-term disability lawyer promptly

Early legal advice can help determine:

• The applicable limitation deadline;
• Whether an internal appeal is worthwhile;
• Whether additional medical evidence is needed;
• Whether vocational evidence should be obtained;
• Whether litigation should be commenced; and
• Whether the insurer’s position is supported by the policy and the evidence.

Frequently Asked Questions

Can I sue the insurer instead of appealing?

In most cases, a claimant should commence a lawsuit without completing the insurer’s internal appeal process.

Whether that is the best course depends on the denial reason, the available evidence, the limitation deadline and the terms of the policy.

Does an LTD appeal stop Alberta’s two-year limitation period?

Not automatically.

Continuing to send information to the insurer or asking it to reconsider does not suspend the limitation period. Obtain legal advice rather than assuming the deadline has been extended.

Can an insurer follow me?

An insurer may conduct surveillance of activities visible from public places and may review publicly available social media content.

However, the surveillance must still be interpreted fairly and in context. A brief activity does not necessarily establish the capacity to maintain regular employment.

Can I receive CPP Disability and LTD benefits at the same time?

Possibly.

Many LTD policies permit the insurer to deduct CPP Disability benefits from the amount it pays. The claimant may therefore receive benefits from both sources, but the LTD payment may be reduced according to the policy.

Some insurers also require eligible claimants to apply for CPP Disability benefits.

What happens when the LTD definition changes after 24 months?

The insurer may reassess whether you remain disabled under the policy’s any-occupation definition.

This may involve updated medical reviews, vocational assessments, surveillance or an insurer-arranged examination. Preparing updated medical and functional evidence before the change-of-definition date can be important.

How much does it cost to hire an LTD lawyer?

Kotak Law may accept appropriate LTD cases on a contingency fee basis. This means that legal fees are payable from the recovery rather than being charged in advance.

The applicable fee arrangement, expenses and taxes should be explained in a written retainer agreement.

How Kotak Law Can Help

Kotak Law represents clients throughout Alberta, including Calgary and Edmonton, in disputes involving denied, delayed and terminated long-term disability benefits.

Our lawyers can:

• Review the denial letter and insurance policy;
• Identify potential limitation deadlines;
• Obtain and assess the insurer’s claim file;
• Gather medical and vocational evidence;
• Advise whether an internal appeal is appropriate;
• Challenge unsupported medical or vocational conclusions;
• Negotiate with the insurance company; and
• Commence litigation where appropriate.

We handle appropriate cases on a contingency fee basis, meaning there is no legal fee unless we obtain a recovery for you.

If your long-term disability benefits have been denied, delayed or terminated, contact Kotak Law for a free and confidential consultation before any deadline passes.

 

This article provides general legal information and is not legal advice. Limitation periods and insurance-policy requirements are fact-specific. Speak with a lawyer about your particular circumstances.