Generally speaking, claim liability, whether through an employment group policy or an individual policy, mandates that a claimant suffer a total disability. Contrary to what most HR departments often think, total disability in the context of disability insurance does not mean that an employee must be completely helpless and incapable of any activity. Rather, total disability has been established by our Courts to mean that an insured is incapable of engaging in all or at least some of the important duties of his or her job.
Most long-term disability insurance policies issued through work provide two definitions of “total disability”. Within the first two years of benefit payments, total disability is established when an employee is incapable of doing the important duties of his or her job, even though that employee could perform another occupation.
After 24 months of disability, there is typically what you call a “change in definition”. Most, if not all policy definitions change from an employees “own occupation” to “any occupation.” The change of definition typically means that an insured person is disabled if he or she is unable to engage in any occupation or perform any type of work for compensation or profit – or – unable to perform the activities of any occupation for which he or she is reasonably suited by reason of education training and experience. If the employee can only take on minor, trivial or inconsequential work, for which he or she is overqualified, than that employee will more likely than not still be deemed totally disabled.
Salary of potential alternative occupations are normally to be comparable to the pre-disability salary of the insured. It is a factor to be considered by our Courts. There is however a duty for an insured person to mitigate his or her damages. The claimant must follow medical advice and medical care, and try his or her best to get better, if possible.
Lastly, a claimant who is suing a disability carrier for insurance proceeds has the onus of proving that he or she is totally disabled. It is the insured who bears the onus of proof and the burden of proving inability to perform any occupation.
Disability claims and psychiatric conditions
Chronic mental illness claims can be very difficult and challenging to navigate for both employers and disability carriers. Often times, mental illness disability claims are subjective – meaning that symptoms are present only to the individual affected and not observable by others.
Psychiatric or psychotic disorders are, conversely, of a different nature. Psychiatric or psychotic disorders are normally classified as severe mental disorders such as schizophrenia, schizoaffective disorder, schizofreniform disorder and general psychotic disorders. Symptoms and warning signs can be paranoia, delusional thinking, suspiciousness, uneasiness with others, social isolation, hallucinations, declining self-care, confusion and trouble communicating, auditory hallucinations and overall, a loss of contact with reality. Individual perceptions and thoughts become disturbed and he or she often has difficulty understanding what is real and what is not. Person experience anxiety, depression, sleep problems, lack of motivation and decrease in overall functioning.
A perfect example can be taken from one of my recent filed cases, Kral vs Sunlife. The plaintiff was a 38-year-old man who had a history of bipolar disorder but was in remission. He graduated from McMaster University in engineering with honours. He had not had a bipolar episode in several years prior to his graduation. When he was approximately 35 years old he began to suffer delusional paranoia and several other issues such as disorganized thinking, social isolation and impairment in occupational function. He started to believe that cell phones and video cameras were recording and planning against him. He was eventually diagnosed at the age of 36 with a psychiatric condition called schizoaffective disorder, bipolar type. This disorder combines the symptoms of both schizophrenia and a bipolar mood disorder.
It was argued that the plaintiff would, more likely than not, continue with psychiatric symptoms for the remainder of his life. The symptoms needed to be controlled by medication. The symptoms made him suffer memory problems, periods of depression, irritability, attention problems, sleeping problems and paranoid ideas or thoughts. The medication that the plaintiff had to take for life were two-fold. Several medications were to control the schizoaffective behaviour, and another to control his bipolar symptoms. Overall, he was never going to be able to work a regular job in a “people environment” ever again.
Cases like this are not uncommon. Objective psychiatric conditions often manifest themselves during young adult hood when a person is fully and gainfully employed. Although mental and psychiatric disorders usually begin or occur in childhood or adolescence, conditions can often be left untreated until a number of years later. Timely intervention however, might help reduce the onset or persistence of the disorders later in life. Many anxiety disorders and impulse control disorders are also normally experienced early in life. The onset of mood disorders often shall prevail once in early teens through to early middle age.
Psychiatric or psychotic disorders however, often occur before the age of 14. Schizophrenia, which accounts for approximately two thirds of all psychotic conditions, usually starts within ages of 16 to 35. Chronic bipolar disorder, conversely, has a potential onset through all ages of life – even up to and after the age of 50.
For employers, the experience of dealing with an employee suffering from the onset of a psychiatric condition is not easy. The employee departs on short-term disability, most likely never to return – how do you deal with this? How long is the employer to keep the job open for? How do you find out more about their condition while at the same time being sensitive to their medical privacy? How long are benefits payable for? If there is no real probability of the employee returning, can the employer terminate the employee? If so, when?
It is not uncommon for insurance carriers adjusting psychiatric type disabilities to be clinically uneducated. Often times, adjusters wrongly rely upon global assessment of functioning scores (GAF) to measure an insured’s condition, administered at an independent medical evaluation, to terminate benefits. This is never a good idea. The problem with the GAF score is that it’s simply a snapshot in time of the insured’s functional tolerances – when the reality is most mental illness and psychiatric symptoms are dependent on a myriad of factors. Symptoms come and go – but are mostly permanent. Claimants will no doubt have good days and bad days. GAF scores ought not to be a determining factor in assessing a claim for benefit approval or termination – but nevertheless are still used today doctors retained by insurance companies.
Employers should also look for an offset benefits. For example there is no doubt that CPP is now fully deductible for most long-term disability plans. Disability carriers can reduce its monthly benefits by CPP disability that the insured is entitled to apply for and receive from CPP.
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