Pitfalls with Retirement

Our firm sees many cases in which disabled employees find themselves in difficult circumstances. One example is when an employee is no longer able to perform all of the material duties of his or her own job. Often the employee will be close to early retirement age, and so rather than pursuing the long term disability policy and coverage, the employee considers taking early retirement. Then, after the employee resigns, and is on early retirement benefits, he or she realizes that a long term disability benefit was in place. Now going back and trying to undo the situation is very challenging and difficult.

For example, the insurer may well take the position that the employee merely retired and so, no long term disability benefit is payable notwithstanding the fact that there is proof that there is a disabling condition. An insurer may also take the position that the employee did not become disabled until after leaving employment and so there was no longer coverage at that point in time.

Before making any move as to your employment, it is therefore important to look at the facts of your situation and then look at the employee benefits that are provided. Try to answer the following questions:

1.      Why am I disabled from doing my occupation?

2.      Did the injury disabling me occur while I was on the job? (If so, there could be a worker’s       

         compensation claim as well as a long term disability claim)

3.      Am I disabled from performing just my own occupation, or am I disabled from performing any 

         type of full-time work? (Many policies have a change in the disability definition from

         disability from your own occupation to disability from any occupation.)

4.      Does my pension plan have a disability benefit?

There are many other questions that should be answered at this time as well. Many employers will try to help the employee by accommodating the employee to the extent that the employee is no longer able to do the material duties of the job. This may be an accommodation well above what the law may require. When the employer grows weary of this accommodation, the employer may start looking for reasons to terminate the employee. It’s important to have an honest conversation with your employer when you suffer from a disabling condition on such matters. If your employer does not believe that you can perform your job anymore due to your disabled condition, then the employer should tell you this, rather than look for reasons to terminate you. Otherwise, the long term disability insurer may take the position again that really the person is not disabled but rather just poorly performed and was terminated for the poor performance.

Obviously with all of these different issues that can occur, there are a number of traps that can develop which are readily used by insurers and plan administrators to deny benefits. Before you end up in one of these pitfalls, consult with an experienced ERISA attorney so that you can protect your benefits and thus also protect your own ability to continue to provide support for yourself and your family.