Can I file for disability insurance benefits if I was fired before I stopped working?
- If I'm fired from my job can I still file for LTD insurance benefits?
The short answer to this question is, yes. However, whether the claim will be approved depends on a number of factors. The crux of the claim would hinge on whether you were disabled under the terms of your policy before you were fired.
Under most group disability policies the date of termination from employment would mark the end of the employee’s eligibility for coverage under his or her disability policy and a disability claim by that employee with a date of disability after the date of termination would certainly be denied.
To be successful in a claim filed after the date of termination a claimant would have to show that he was effectively disabled before he was fired. A Michigan Federal District Court recently decided a case dealing with this precise issue.
In Hipple v. Matrix Absence Management Mr. Hipple sought disability benefits from an ERISA governed plan. Mr. Hipple was terminated from his employment and subsequently filed a claim for disability benefits. Matrix denied Mr. Hipple’s claim asserting that his employment was terminated for cause and, therefore, he ceased to be eligible for coverage.
Specifically, Matrix assumed that because Mr. Hipple continued to show up to work until his termination on June 6, 2012, he was not disabled before that date. That assumption, according to The Court, is contrary to Sixth Circuit precedent.
The Court explained that an employee can be present at work and receiving a paycheck for his labor and, at the same time, be “disabled” under the terms of the employer’s benefit plan. Furthermore, “a denial… resting on an unverified assumption that the claimant could not have been disabled because he was present at work—[is] arbitrary and capricious.” See Hawkins v. First Union Corp.
In denying Mr. Hipple’s claim, Matrix did not evaluate the medical evidence to determine whether Mr. Hipple was in fact disabled before his termination—i.e., while he was still a participant in his employer’s long-term disability program. Matrix was therefore wrong for denying Mr. Hipple’s claim.
Under the terms of his employer’s long term disability program Mr. Hipple would be entitled to benefits if his disability arose while he was still a plan participant—even if he submitted his application after his termination.