Employment changes can be a stressful time whether it’s your choice or due to termination. Either way, you’ll have to navigate changes in your benefits such as health insurance coverage, retirement savings, and potentially disability insurance benefits.
Illinois does not have a law requiring that employers continue sponsored life insurance, long-term or short-term disability insurance when an employee resigns, is terminated, or is furloughed. However, this doesn’t mean that you won’t be able to continue your coverage.
Our Chicago disability insurance attorneys can answer your questions regarding employer-sponsored disability insurance upon termination of employment.
What are the Possible Outcomes for My Long- or Short-term Disability Plan When Employment Changes?
Typically, if you’re covered by an employer-sponsored disability plan when your employment status changes, one of three things will happen to your disability insurance:
- Your coverage is terminated. As with many employer benefits, if your coverage ends with your employment, when it ends will depend on the company policy. Some companies extend benefits for a period after the employee leaves while others end it immediately upon termination or resignation.
- Your policy can be converted from a group to an individual policy. Many employer-sponsored insurance policies are purchased as group policies. When an employee leaves the company, some insurance providers allow the employee to convert their same policy to an individual plan. There may be a change in premium costs with this option and you as the individual policyholder would be responsible for future premium payments.
What happens to your employer-sponsored life insurance, short- or long-term disability plan will depend on your company’s policy and the insurance provider. Your human resources representative can help you make sense of your plan and understand any next steps.
RELATED: What to Do if Your Long-Term Disability Benefits Are Terminated
What Happens If You Have an Active Disability Claim When Your Employment Changes?
If you are actively receiving disability payments under your employer’s disability policy or waiver of premium benefits under your employer’s life insurance policy when your employment ends, what happens to your policy may be more complicated.
If you are in the middle of receiving payments for a short-term disability claim at the time of your employment change, those payments may continue for the maximum benefit period under the plan if all other eligibility requirements continue to be met.
For example, if your short-term disability maximum benefit period is for 90 days, and your employment is terminated 30 days into your claim, you may still receive payment for the remaining 60 days. If you are eligible to continue these payments, it will be stated in your policy. Your employer-sponsored disability insurance policy will usually have a provision such as “continuation after separation” or “extension of benefits.”
If your employment ends when you are in the midst of an active long-term disability claim, whether your benefits continue again depends on your specific policy. Most insured long-term disability benefits will continue to be governed by the terms of the long-term disability plan or policy regardless of employment status.
How to Keep Your Coverage When Your Employment Changes
If your employment status has changed, there are some steps you can take to try to maintain your coverage.
First, talk to your company’s human resources representative as soon as possible. Your HR representative is there to help you with questions and concerns just like this, as well as to help you make sense of your benefits.
Your HR representative should be well-versed in your company’s policies regarding benefits. It’s possible that your company neither continues benefits nor offers the option to convert group coverage to an individual policy. They should also be able to tell you whether you have a grace period before your benefits end or if those benefits end on the last day of your employment.
If your company’s insurance provider does offer a continuation of your employer-sponsored short- or long-term disability benefits, your HR representative should be able to help you find out how to make sure these benefits continue. They may put you in touch with someone from the insurance provider or notify the provider themselves to maintain coverage.
RELATED: Going From Short-Term Disability to Long-Term Disability
What Happens if You Have an Active Disability Claim When Your Employment Changes?
If you have an active disability claim through your employer-sponsored disability insurance when your employment changes, there are a few steps you can take to make sure that you aren’t caught off guard:
- Get a copy of your disability plan documentation. You may be able to find this through your employer’s benefits access portal. Otherwise, you can request a copy from your company’s human resources representative.
- Carefully read your policy, especially the section that discusses continuation and termination. This section should tell you what will happen to your policy and claim depending on various scenarios of termination.
If the information in the policy documentation is unclear, don’t be afraid to ask for clarification, either from your human resources representative or from an agent at the insurance company.
RELATED: How Do You Prove You Are Disabled Under a Disability Insurance Policy?
Bryant Legal Group: Chicago’s Trusted Disability Insurance Firm
Situations involving an employment change and a disability claim can be complex. This is especially true if you feel that you’ve been wrongfully terminated or are experiencing discrimination. We always strongly recommend that a client speak with an attorney before pursing both a disability claim and any type of employment law claim. Pursuing different types of claims at the same time can put a plaintiff in a position where statements in one claim matter may hurt a claim in another.
A skilled disability insurance lawyer can help you keep your claims in order and aggressively advocate for your rights.
Bryant Legal Group has helped people across Chicago and Illinois get the short- and long-term disability insurance benefits they deserve. We take a practical, client-centered approach, helping our clients make smart decisions about their disability claims and appeals.
If you are ready to speak to an experienced Chicago insurance attorney about your claims, call us today at 312-561-3010 or complete our online form to request a consultation.
The content provided here is for informational purposes only and should not be construed as legal advice on any subject.