Terminated from Employment –  Do You Still have LTD Coverage?

Terminated from Employment – Do You Still have LTD Coverage?

Terminated from Employment - Do You Still have LTD Coverage?

When employment ends most people would assume the long-term disability insurance coverage also ends, but a recent Ontario Court of Appeal decision has confirmed, again, that LTD coverage may continue in certain circumstances. The circumstances of this case are rare, but this case does suggest that a close examination of the timeline should be made in determining whether there continues to be a viable claim.

The case of MacIvor v. Pitney Bowes, 2018 ONCA 381 which was released on April 19, 2018, decided that Mr. MacIvor did have coverage for his claim for LTD benefits under a policy with Manulife Financial, even though he quit his job at Pitney Bowes in 2008, and had taken up employment with Samsung. After not being able to continue the job with Samsung, he applied for LTD benefits on September 9, 2010.

Here is a list of the important dates in this case:

• April 16, 2005 – suffers traumatic brain injury and severe back injury;

• August 2005 – returns to work

• August 11, 2008 – he quit job at Pitney Bowes

• August, 2009 – fired from Job with Samsung

• September 9, 2010 – applied for LTD benefits

• November 1, 2010 – claim denied

• April 11, 2011 – lawsuit commenced

Manulife did not dispute that Mr. MacIvor was totally disabled and also acknowledged that they had received sufficient notice of the claim in April 2005. Because the policy said that there was no coverage for persons who were not employed by Pitney Bowes, the trial judge agreed with Manulife and dismissed the claim.

A key point in this case was the fact that Mr. MacIvor did not become aware of the permanent and disabling nature of his brain injury until after he had resigned his employment with Pitney Bowes. The Court found that there was sufficient ambiguity in the language of the Manulife policy to allow for coverage for undiscovered disabling medical conditions even after someone ceased to be an employee. The Court found that coverage should be extended subject to other policy requirements, the provision of timely proof of claim and that the lawsuit is commenced within the relevant limitation period.

On the issue of timely proof of claim, the Court allowed for imperfect compliance with a 90-day requirement to submit the proof of claim, but because both the employer and Manulife were aware that he had suffered a serious injury, relief from forfeiture was granted, in the circumstances of this case.

On the limitation period issue, the Court found that the 2-year limitation period began to run at the end of August 2009, when Mr. MacIvor became aware of total disability, so the lawsuit was commenced within the 2-year limitation period.

The take-away from this case is that you should not assume that just because your employment has been terminated that there is no chance of pursuing an LTD claim. While the circumstances of this case may be rare, there are other situations that may also give rise to a viable LTD claim after employment has ended. If you think your situation may be similar to this one, or u have become disabled as of the date your employment has terminated, or shortly thereafter, you should try to submit a claim for disability benefits. If denied, you should contact a disability insurance lawyer to see if you may have a case.

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