If you are unable to work due to a medical or mental health condition, you may be entitled to benefits under a long-term disability insurance policy. But what if you want to do some kind of work while you are on disability? Would doing so lead to your benefits being terminated?
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What Happens if I am Caught Working While on Short-Term Disability?
There is a possibility that working in a different occupation while you are receiving disability benefits will lead to the termination of your benefits. The likelihood of this occurring depends on the specific terms of your policy, including whether you have an “own occupation” or “any occupation” policy. Read on to learn more about your ability to work while on disability, and reach out to a New Jersey disability benefits lawyer if you have additional questions.
The Difference Between Own Occupation and Any Occupation Policies
Long-term disability (LTD) insurance policies offer a way to protect yourself from financial instability in the event that you are unable to work due to a disability. If approved, these policies provide payments of between 50 and 60% of your salary while you cannot work. You can apply for benefits after a waiting period (usually 6 months) and may receive them for anywhere from 2 years to retirement age.
Eligibility for LTD Benefits
To be eligible for LTD benefits, you must prove that you have a covered disability and that you are unable to work as a result of this disability. Covered disabilities may include both physical and mental health conditions, depending on the terms of your policy.
Own Occupation vs. Any Occupation
The question of whether you are unable to work is answered, in part, by whether your policy is for your “own occupation” or “any occupation.” “Own occupation” policies define “unable to work” by reference to whether you can perform the duties of your own job. These policies are often purchased for individuals in high-income occupations and certain professionals like doctors and lawyers.
In contrast, “any occupation” policies base coverage on whether you can work in any occupation — even if it isn’t your current or prior job. Importantly, “any occupation” does not mean that you can perform any job in the world. Instead, policies typically define “any occupation” to mean employment at a job for which you are reasonably suited, according to your education, skills, employment history, and other factors.
Some insurance policies begin with an “own occupation” provision that converts to “any occupation” after a specified period of time. If you have questions about what type of policy you have and how it may impact your disability claim, a New Jersey disability benefits lawyer can review your claim and provide advice.
Working While Receiving Long-Term Disability Benefits
Generally, “own occupation” LTD policies are more favorable to insureds than “any occupation” policies. This includes, in some cases, the ability to work while you are out on disability and receiving benefits. Your ability to work at a different occupation may be affected by the specific provisions of your policy.
Limitations and Return-to-Work Incentives
There are some situations where it is entirely possible for an individual who is unable to perform the duties of their own profession to perform different work. For example, a surgeon who suffers a serious hand injury may not be able to perform the specific functions of their job for an extended period of time, because doing surgery requires the full use of both hands. If the surgeon is receiving LTD benefits while they cannot work, they may be able to work in a different job, such as consulting and providing expert testimony in personal injury cases.
Unsurprisingly, many insurance companies attempt to limit the ability of their insureds to work in a different job while on disability benefits. This may include determining that a person is no longer disabled if they achieve a certain income threshold from other types of work. A policy may contain a clause that an individual who earns at least 80% of their pre-disability salary in a different job is no longer considered disabled for the purposes of receiving benefits.
Other policies may contain return-to-work incentives, where a person’s benefits will be reduced in specific situations. A common example is a provision that states that if the combination of a person’s benefits and other income exceeds 100% of their pre-disability earnings, their benefits will be reduced until their total compensation equals their pre-disability earnings.
For professionals who must have a license to perform their job, an insurance company may insert a clause that states that “own occupation” is defined as broadly as the scope of their license. In the surgeon example above, this type of limitation may prevent the doctor from doing any work that is within the scope of their license — which may include consulting and providing expert witness opinions. If your insurance policy contains this type of provision, a Cherry Hill disability benefits lawyer can help you determine exactly what kind of work you may be able to do.
Federal courts have considered the question of what it means to work in your “own occupation” for purposes of long-term disability policies. Courts have found that “own occupation” means the usual work that you are actually performing right before you became disabled. This should be defined by your actual job duties, not on how the job is performed in the national economy.
For individuals with “any occupation” policies, the ability to work in a different occupation while on benefits is more limited. Depending on the terms of your policy, you may be able to do other types of work while receiving disability. However, your LTD benefits may be reduced if you earn over a specified amount.
In some cases, if you are permitted to work at another job while receiving disability benefits, your benefits could be terminated if you earn over a certain percentage of your pre-disability earnings. The potential for your benefits to be terminated if you earn too much makes it all the more important to consult with an attorney before beginning other work while receiving LTD disability benefits.
Filing for Disability Benefits? We Can Help.
The process of applying for disability benefits can be complicated. If you cannot work due to a disability, having a skilled New Jersey disability benefits lawyer can make filing for disability benefits that much easier. In addition, your attorney can counsel you on your obligations and rights under the terms of your policy — including whether you can work at a different job or can you work and get still get disability at all.
Bross & Frankel represents individuals throughout New Jersey and Pennsylvania who are seeking disability benefits. We will stand by your side throughout the process, giving you top-notch legal advice and assistance. To schedule a free disability claim review, contact us today at 856-795-8880 or reach out online.
Rich Frankel is the managing partner of Bross & Frankel. He is a member of the New Jersey and Pennsylvania bars. He has focused exclusively on disability and social security benefits since 2005.
Mr. Frankel joined what is now Bross & Frankel after having watched his father struggle with disability, fighting a lengthy illness. Mr. Frankel founded the firm’s veteran’s law practice and substantially grew the social security disability practice, focusing Bross & Frankel’s ability to fight for all of the disability benefits available to his clients.
Mr. Frankel additionally fights for clients in court, obtaining frequent victories in Social Security appeals and against insurance companies in Federal court.