An employee who becomes disabled while covered by an employer-sponsored disability plan may qualify for short-term disability (STD) benefits and then long-term disability (LTD) benefits, based on the length of the disability and the terms of the plan. However, some LTD policies require that the employee not only apply for STD, but “exhaust” it, meaning receive the maximum amount of benefits allowed under the policy, before they may pursue LTD. If an employee received all but one day of the full STD benefit, they may still have to go through the appeals process or risk eligibility for the more valuable LTD benefit.
Kantor & Kantor was recently retained by a client, who we will refer to as John Smith for anonymity. Mr. Smith was employed by a large corporation as a Material Handler who was responsible for all supplies and materials needed to manufacture medical devices. Unfortunately, he became disabled by degenerative disc disease and painful spondylosis of his lumbar spine. In addition, he suffered from sciatic nerve pain in his back. His painful conditions necessitated medications which also caused side effects and impacted his functioning.
Mr. Smith’s company’s disability plan claim involved the situation described above, except that his STD claim was terminated just a few weeks before he received the maximum duration of benefits. He unsuccessfully appealed his STD denial on his own before hiring the law firm. In evaluating his STD claim and his potential LTD claim, the attorneys identified the following language in his LTD policy: