Short-term disability: How to get coverage if you’re off work from COVID-19

TORONTO -

You may be entitled to compensation if you’re off work due to do COVID-19. Insurance companies, however, are fighting this as COVID-19-related illness is keeping more people home from work.

Navigating a leave of absence – whether it’s COVID related or not – can be complicated. What you may be entitled to depends on the parameters of a legitimate claim, what a short-term disability insurance policy covers and your rights as an employee.

“The purpose of short-term disability is to provide income replacement for a period of time so that that income can cover a disability leave,” explains Maria Esmatyar, a partner at Toronto-based law firm Lecker and Associates who specializes in employment law and employment-related disability matters.

The amount an employee receives and the length for which they can receive it depends on the employer’s policy, she adds, but it can be anywhere from 55% to 100% of their salary for two to six months.

According to the 2021 Canadian Life and Health Insurance Factbook, because of COVID-19, in 2020 insurers paid an additional $150 million in disability claims beyond what was projected. Esmatyar notes that she’s seen a rise in short-term disability claims, most often due to long COVID, but sometimes due to mental health and workplace stress.

Ian Hurley, an employment lawyer who’s also a partner at Lecker and Associates, underlines the importance of having strong medical support and a physician who’s on board with any treatment you plan on applying for short-term disability.

It’s also helpful to talk to a lawyer who can help ensure you get the coverage you need from your place of work.

“It’s very important to see a lawyer that does both employment and disability-related work at the outset,” Esmatyar adds, “because one of the key factors people need to be aware of is short-term disability is actually paid by the employer, not the insurance company.”

If there’s a dispute, it’s actually the employer and not the insurance company that needs to be dealt with – and that can get sticky.

“It can create a lot of interesting legal issues, especially when there’s a denial of the claim and you’ve exhausted all your appeals,” Hurley explains. “You’re suddenly in the awkward position of having to consider suing your employer for breach of contract.”

One common fear employees have when applying for short-term disability is that the insurance company adjudicating the claim will share confidential medical records with their employer.

Hurley offers reassurance that this isn’t the case.

“Smart employers don’t want that type of information on file – it creates all sorts of liability issues for them,” he says. “That’s why they hire an insurance company to adjudicate the claim.”

The caveat to this, however, is COVID-19 vaccine mandates and exemptions. In certain circumstances, it may be reasonable for an employer to ask for more medical information, notes Esmatyar.

“If someone presents a doctor’s note to their employer that says this person is exempt from taking the vaccine, maybe that’s not enough. Maybe the employer has a right to know well, why not? Then they can decide whether they need to accommodate this individual or not.”

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