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What Happens to Long-Term Disability (LTD) Benefits If I Lose My Job?

Leah Small

March 6, 2023

Updated: February 27, 2024

What Happens to Long-Term Disability (LTD) Benefits If I Lose My Job?

Long-term disability (LTD) benefits are important for those who have a medical condition that prevents them from working.  These benefits protect a percentage of a person’s income, usually between 60 and 80 percent of their pre-disability earnings.  Yet what happens if they lose their job while receiving benefits?

Generally, when you lose your job, it will not affect your ability to continue receiving long-term disability benefits.  However, it is always good practice to thoroughly read your policy to ensure that this is indeed the case.

Nevertheless, there are other factors to consider when thinking about your LTD benefits and employment status.

Can Your Employer Terminate You While on LTD Benefits?

Unfortunately, long-term disability benefits do not come with job protection.  However, if you are receiving “Family and Medical Leave” (FMLA) benefits, you do have job protection for the period in which you receive such benefits, typically up to 12 weeks.  When you are only receiving LTD — or short-term disability (STD) — benefits, your employer could terminate your employment.

Going from Short-Term Disability to Long-Term Disability

Since long-term disability benefits can last for an extended period, sometimes up to retirement age, claimants must be cognizant that their employer could terminate them while they are receiving benefits.  Employers usually cite a need to refill the role the claimant is leaving vacant as the reason for letting them go.

Conversely, short-term disability benefits usually last between three and six months.  Many employees who receive STD benefits may transition to LTD benefits.  Some employers may terminate employees while they are on short-term disability before this transition occurs.

What Happens to Long-Term Disability Benefits If Your Employment is Terminated?

When you develop a debilitating medical condition that prevents you from working, long-term disability benefits may be your best option.  These benefits protect a portion of your income when you cannot work due to a disability.  Your employer may offer LTD insurance.  Such policies given by employers are known as “group policies.”

Will Long-Term Disability Benefits Continue After Job Termination?

However, what happens if, after going through the entire claim process and receiving an approval of benefits, you lose your job?  For some, this is a possibility.  You may begin to worry that since you lost your job and no longer have your job’s benefits package, that your LTD benefits will also cease.

Luckily for most, these benefits do not cease when you lose your job.  Usually, the most important aspect is when your disability began.  If your disability began while you were still employed — and therefore still covered by your employer’s long-term disability policy — then your benefits will likely continue.  In other words, it is not the date on which you file for your benefits that matters, it is when your disability itself began.

Additionally, it is also possible to file for such benefits after being terminated, assuming your disability began while you were still employed and covered by your company’s LTD policy.

Maintaining Medical Treatment for Your Condition

When you lose your job, you will lose the health insurance that your employer provides.  This health insurance is vital because it becomes difficult to continue seeing your doctor without it.  Why is this important?  Many insurance companies require you to maintain medical treatment for your condition to continue receiving benefits.

Continuing Health Insurance with LTD After Job Termination

The insurance company often requires updates on your condition when you are on claim.  If you do not submit these updates, it could result in a termination of benefits.  Thus, if you stop visiting your doctor because you do not have health insurance any longer, it could put your LTD benefits in jeopardy.

It is important that, if financially possible, you continue visiting your doctor.  Maintaining medical treatment for your condition is crucial to retaining your benefits.  Moreover, you can also apply for the Continuation Omnibus Budget Reconciliation Act (COBRA).  COBRA helps individuals who lose their healthcare to continue a group health plan for a limited time — though they (i.e., the claimants) are responsible for the premiums.

Therefore, your LTD benefits will not cease upon losing your job, but this does not guarantee that the insurance company will not terminate them at a later point for some other reason.

Proving Your Disability

You must prove your disability prevents you from working to receive benefits.  Before you file any claim, it is best to request a copy of your LTD policy.  This policy has a lot of information concerning your claim such as offsets, the waiting period, exclusions, and more.  Among the information in your policy is the definition of disability, which is vital for your claim.  To receive benefits, you must prove your disability meets this definition.

Long-Term Disability (LTD) 101

To prove your disability, you must provide your insurance company with evidence.  Evidence may include:

  • Medical records: These records are often your primary source of evidence.  Some claimants may only need medical records to receive an approval, yet others may need to submit supplemental evidence to reinforce their claim.
  • Vocational evaluations: A vocational expert can provide valuable evaluations that strengthen a claim.  These vocational evaluations can illustrate how your disability affects you at your specific job or any job.
  • Witness statements: Other people see how your condition affects you every day.  Obtaining official witness statements from them can show how far-reaching your condition is.  For example, a witness statement from your friends or family can show how your condition affects you at home, while a statement from a co-worker can show how your condition affects you at work.
  • Additional medical evaluations: It can be a good idea to get additional, professional opinions on your condition.  While your medical records contain a lot of valuable information, additional medical evaluations can corroborate the material within those records, as well as add additional insight.
  • Detailed reports from your doctor: A detailed report from your doctor can focus on some aspects of your condition that ordinary medical records do not.  These reports can show the impact of your condition over time; they can also show how impairing your condition is since they will include a lot of information pertaining to your specific situation.

Maintaining an open dialogue with your doctor is important.  Over time, they can make notes, with specific dates, as to the nature of your condition, which can help provide a timeline for when your disability began.

Call CCK Today for a Free Case Evaluation

It is beneficial to consult an attorney who has the experience to help guide you through the long-term disability process.  Chisholm Chisholm & Kilpatrick has over 30 years of collective experience dealing with insurance companies and is ready to help you.

At CCK, we believe you should focus on managing your health rather than worrying about obtaining your benefits.  We can lessen the burden of receiving long-term disability benefits.  Call us today at (800) 544-9144 for a free case evaluation.  We will review your case and see if we can help.

About the Author

Bio photo of Leah Small

Leah joined CCK in September of 2016 an Associate Attorney in the firm’s litigation practice and now serves as a Supervising Attorney. Leah’s practice focuses on representing individuals in the application, appeal, and litigation of life, health, short-term disability and long-term disability insurance benefits under the Employee Retirement Income Security Act (ERISA) and under private insurance contracts. Leah’s practice also includes litigation of personal injury, business, and contract disputes in both state and federal court.

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