Sun Life Reversed Decision to Terminate Accountant’s Residual Disability Benefits Based on Her Medical Records and Physician Opinions, but Denied Her Benefits After Determining that Her Income While Disabled Was Greater Than 80% of Her Pre-Disability Income

Most long-term disability policies require a claimant not only be unable to perform the material and substantial duties of his or her occupation due to sickness or injury, but they must also be earning less than 80% of their pre-disability income if they are working on a full-time or part-time basis while disabled. If a claimant has applied for disability benefits due to the inability to work in a full-time capacity, it is extremely important to make sure that the income he or she is earning does not rise above the requisite 80% of his or her pre-disability income or they will not qualify for disability benefits even if determined medically disabled under the policy. It is important that you communicate with your employer to ensure that your earnings are being reported accurately during the period where you are working while disabled and that you are not working more hours than recommended by your physician. For example, if you are being paid vacation pay or being compensated in ways that are excluded as income under the policy, make sure your W-2 or 1099 reflects this. If not, your claim for LTD benefits may be lost for good. If you work more hours than you are supposed to, your pay will reflect that and you will also not qualify as disabled under the policy.

In this particular claim with Sun Life, the claimant was clearly disabled due to RSD and per her physician’s orders could only work 20 hours a week. The claimant worked too many hours during tax season (which in turn exacerbated her illness) and was paid vacation pay bringing her salary over the 80% threshold. Sun Life agreed that she was disabled and would have qualified for Residual Disability benefits, but for the fact that she worked too many hours over a three month period and her employer incorrectly reported her income. Sun Life approved her claim for benefits for only one month, then turned around and denied her again for failing to meet the definition of disability. Dell & Schaefer is in the process of filing another appeal on her behalf and the claimant will possibly have to wait another three months for Sun Life to determine if she now qualifies under the terms of the policy.

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