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Will Your Long-Term Disability Benefits Be Canceled If You Are Fired?

by John Eshan

If you have been receiving long-term disability settlements through your employer’s insurance program, you may wonder if your benefits would keep coming in if you were fired and if your disability could end at any moment.

If you lose your job and are covered by LTD coverage via your employer plan, the law requires that the business maintain your LTD coverage for at least one week for each year of employment and a maximum of eight weeks. Although some employer-provided plans define a longer time for disability coverage when a worker is terminated, this is the required minimum for LTD compensation. Therefore, before seeking compensation, you should look for conditions that qualify for LTD.

What should you do if your long-term disability benefits are terminated if you are fired?

Employers must provide workplace accommodations so LTD employees can return to their jobs.  In the same way, the injured person has to make reasonable and maximum effort, regardless of their present capabilities and health, to perform their work in their reduced capacity. 

Even if they cannot fulfill the revised duties they were assigned, those receiving LTD payments cannot be fired “for cause.” However, suppose an employer has made a suitable and reasonable effort to make accommodations for the employee to return to work gradually, but the employee is still unable to do any work for which they are legitimately suited and is unlikely to be able to get back to the job in the reasonable future. In that case, the employer can mark the contract of hire with the person receiving disability payments as “frustrated” and terminate the employee. Employers must ensure that all possible efforts are made to accommodate the impaired employee before deciding to terminate an employee due to disability.

After being fired from your employment, would your LTD benefits be lost?

If you are getting disability benefits and were terminated from your work, as long as you are “totally disabled,” your benefits cannot be halted before the end date for LTD coverage established in the disability plan. This means that losing your job should not impact your ability to get or continue to receive disability compensation.

Depending on the conditions in your LTD scheme, you can be eligible for disability payments up to age 65 or for a specific amount of time (often 2, 5, or 10 years). To prove that you are still “totally disabled” and cannot do any work for which you are qualified in any occupation, your LTD insurance company can ask you to do so after a minimum of two years since you initially got disabled.