Reducing work hours may imperil disability coverage.

Many people who are struggling to work due to an acute unexpected medical condition do not have the opportunity to prepare or plan for filing a short and or long term disability claim.  My experience is that most people who eventually file disability claims have chronic medical conditions which have been ongoing for months and even years.

During this difficult period disabled people often find themselves engaged in an heroic effort to continue working.  People engage in this long battle for many reasons, one is often financial, and the other is simply their own credibility – they like working and work makes them feel productive.  For so many of us, giving up a job or a career is the last thing we want to do.

Unfortunately, people do not understand that the amount worked during a workweek determines whether you are actually eligible or covered for disability insurance through your employer.

As the months turn into years, and the medical conditions become more debilitating, people often reduce their hours at work and go part time (i.e. 10-30 hours per week) without giving any thought to how it may impact their disability claim.  Unfortunately, most people do not understand that the amount worked during a workweek determines whether you are actually eligible or covered for disability insurance through your employer.  Reducing one’s work hours to part time in an effort to continue working is a huge trap and can be a very costly mistake because the employee may inadvertently lose disability insurance coverage at the very time it is most needed.

This trap for the unexpected worker is best placed under the category of, “no good deed goes unpunished.”

It is critical to understand that almost every employer provided disability policy requires that an employee be working a certain number of “minimum hours” per week in order to be eligible for and covered by disability insurance.  Simply being an “employee” is likely not enough – disability coverage is about hours worked per workweek.There is no typical number of minimum hours, it depends entirely on the company’s disability policy; however, anywhere from 25-32 hours of work per week is required in order to stay eligible and covered for disability benefits.

It is critical to understand that almost every employer provided disability policy requires that an employee be working a certain number of “minimum hours” per week in order to be eligible for and covered by disability insurance. Simply being an “employee” is likely not enough – disability coverage is about hours worked per workweek.

Therefore, if an employee is contemplating reducing work hours due to a medical condition and may need to file a disability claim, it is critical for to go to the employer’s Human Resources department to obtain a copy of the short and/or long term disability policy and look at the section of the policy which is usually titled “Active At Work” requirements.  This section will list the minimum number of hours per week that the employee needs to work to remain covered.

Armed with the details of the  “Active at Work” requirement, an employee will be able to make an informed decision about how best to reduce work hours so as to continue to work, and be certain to not lose the disability insurance coverage.

If the employer will not allow the employee to work reduced hours to meet the “Active at Work” requirement then the employee is likely better off filing a disability claim while still working full time so there is no question about whether coverage was in place on the day the employee became disabled.

If you have an insurance claim which has been terminated or denied, contact Jan Fishman, a former in-house Manulife lawyer, and put his experience to work for you.