Are LTD Claims Impacted if Employment is Terminated?

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Peter, a teacher, is currently out on an approved long-term disability (LTD) claim. Due to his disability, it is unlikely that he’ll be able to return to work. Peter’s employer needs to fill his position, but they aren’t sure if terminating his employment would affect his existing disability claim.

Employers can terminate a disabled employee’s employment without impacting their claim. Their decision to terminate does not have any bearing on whether a benefit will be payable. Claim payments would continue to be made by the long-term disability insurance carrier. Claims are determined by:

1. If the employee was an active employee of the employer upon their date of disability. If an employee was terminated prior to their disability date, their claim would be denied.
2. If the employee continues to meet the definition of disability as stated in the certificate of insurance.
3. Premiums are being paid through the elimination period as stated in the certificate of insurance.*

If Peter elects to start collecting other sources of income from social security or retirement, his current benefit amount may be reduced.

Contact your NIS Representative if you have any questions.

*May be applicable to life insurance as well.