what happens when an employee goes on long-term disability

When an individual becomes diagnosed with long-term injuries and debilitating illnesses that prevent them from returning to work for months or even years, they will be able to claim long-term disability benefits.

The terms and conditions of these plans and benefits can be complicated, making it crucial to know what happens when an employee goes on long-term benefits. Long-term disability is a form of insurance that offers an employee a portion of their earnings, usually 50% to 75%, during a recovery period from an illness or accident that isn’t work-related.

Frequent reasons for receiving long-term disability benefits include different forms of cancer, mental health issues, heart diseases, among others. If, for example, an employee is diagnosed with a brain injury that puts them at a partial permanent disability, they may qualify for long-term disability benefits.

In this case, because the individual is only partially disabled, they can still go to work, but this disability prevents the employee from doing their job properly. In this scenario, the employer might decide to fire the employee, making it important for the employee to know his/her legal rights and expectations when it comes to long-term disability.

What Happens to a Long-term Disability When Terminated?

If an insurance company pays for the employee’s disability benefits, their employment status most likely won’t impact their long-term disability benefits.

In comparison to this, if one’s employer pays for these benefits, then the employee’s disability payments may stop. Disability benefits that are paid by the employer will continue after termination depending on the terms of the disability plan.

The disability benefit administrators must be sure to look at the claimant’s medical status at the time their employer lets them go even if they were fired. By law, an administrator can’t deny a disability claim where the employer terminated the claimant’s employment. This situation would only be justifiable if the disability plan includes explicit terms that say otherwise.

It is important to note that there are also other instances when the insurance company can legally stop an employee’s disability benefits. When this happens, it’s mainly because the employee does not meet the criteria of “disabled” any longer. The insurance company can also cancel these benefits if the employee doesn’t cooperate with their requests for necessary information.

Does Disability Insurance Protect You from Losing a Job?

Receiving disability benefits doesn’t protect an employee’s job. Many employers terminate the employment of an employee who goes on long-term disability after they receive benefits for a long period. This is done if, for example, they decide that it’s unlikely the disabled employee will come back to work in the future. 

In the case of an employer wanting to fire an employee who intends to apply for long-term disability benefits, these circumstances are much different.

Section 510 of the Employee Retirement Income Security Act of 1974 (ERISA) permits an employee to sue their employer, in the case that they terminated the employee purposefully to interfere with the employee’s right to benefits.

Do Disability Benefits Continue After Termination

The possibility of future termination is also an important point to factor into what happens when you go on long-term disability. Most times a long-term disability policy does not openly state that employees aren’t eligible for disability payments if the employer terminated their employment for good reason.

Whether or not an employee’s disability policy contains this information will dictate if a for-cause termination causes the employee to stop getting long-term disability benefits.

Important to note is that if an employee were to be terminated, this would also impact their health insurance coverage. Employer-sponsored healthcare benefits usually stop on the last day of the month on which the employee was let go.

Employees need continued proof of their disability to keep receiving their disability benefits. If financially possible, one should keep getting medical treatment even if they don’t have employer-sponsored healthcare benefits any longer.

Laws Protecting Disabled Employees 

Familiarizing yourself with the following laws can help to understand one’s legal rights and what happens when an employee goes on long-term disability.

Americans with Disabilities Act

Within the ADA, all employers with at least 15 employees must be able to successfully provide their disabled employees with reasonable accommodations to ensure they can do their jobs.

Reasonable accommodations are changes or adjustments in the work environment that make it possible for the employee to perform their duties as well as they could before suffering a disability. These changes, however, must not cause the company extreme hardship.

To accommodate employees with such disabilities, employers can make sure to do the following:

  • Install ramps or update the layout of the workplace.
  • Provide technologies that better assist disabled employees, such as screen readers and videophones.
  • Offer a more flexible schedule to the employee or update their job requirements.
  • If an employer provides reasonable accommodations and the employee still can’t do their job as their employer expects them to, the employer can legally dismiss them. The dismissal of an employee is also allowed if no reasonable accommodations exist that can assist with the employee’s disability.

Family and Medical Leave Act

The FMLA is presented to help employees balance their relationship between their work and personal life. It is under this law that certain employees are allowed up to 12 weeks of unpaid, job-protected leave.

Job-protected leave means that an employee can take leave from work for up to 12 weeks and their employer is not allowed to terminate them. If the employee’s leave continues for longer than 12 weeks, the employee is no longer protected by law, meaning that they can be legally dismissed.

This act applies to employees in the following areas:

  • Public agencies.
  • Elementary and secondary schools, including private and public.
  • Companies with 50 or more employees.
  • Employees who have worked for their current employer for at least up to 1,250 compensable hours over the past 12 months are entitled to an FMLA leave. Compensable hours will be determined according to the principles of the Fair Labor Standards Act (FLSA).

Contact Aaron Engle Law for All Your Long-Term Disability Needs!

When dealing with what happens when an employee goes on long-term disability, it can be a complicated matter. The benefits and the policies that govern these types of insurance coverage can be difficult to understand, which is why one needs legal assistance.

At Aaron Engle Law, we are well experienced in knowing what is needed to successfully develop, deliver, and win your case.

Call us today at Aaron Engle Law or contact us via our convenient online platform, where our team is ready to remind you about your rights and what you are entitled to.