Short-term disability (STD) insurance provides financial support to individuals who cannot work due to a medical condition. However, claim denials are common, and insurers often cite insufficient documentation, pre-existing conditions, or policy exclusions.

Under Ontario’s Insurance Act, insurers must provide a valid reason for denial and act in good faith. Claimants have the right to appeal and, if necessary, take legal action to challenge an unfair decision.

This article outlines the most common reasons for short-term disability denials and how to respond effectively.

Common Reasons for Short-Term Disability Denials

Insufficient Medical Evidence

Insurance companies require objective medical proof that a claimant cannot perform their job duties due to a disability. If medical records lack sufficient detail, insurers may reject the claim.

Examples of insufficient evidence include a doctor’s note that does not specify work restrictions, a lack of diagnostic tests or specialist reports, and medical records that do not align with the insurer’s definition of disability.

To respond to this type of denial, claimants should request detailed reports from their doctor outlining functional limitations, provide test results and treatment records, and ensure the documentation directly addresses the insurer’s criteria for disability.

Pre-Existing Conditions

Many disability insurance policies include pre-existing condition exclusions. If a claimant was diagnosed or treated for the same condition before coverage began, the insurer may deny the claim.

To respond to this type of denial, claimants should review their benefits booklet to understand pre-existing condition clauses, obtain medical records showing the condition worsened after coverage began, and seek a medical opinion from a specialist to support the claim.

Employment-Related Issues

Some short-term disability policies require claimants to be actively employed when they become disabled, complete a waiting period (elimination period) before receiving benefits, or work a minimum number of hours before qualifying.

To respond to this type of denial, claimants should verify that they meet their employer’s eligibility criteria, ensure the claim was filed within the correct timeframe, and provide proof of employment status if necessary.

Lack of Coverage for Certain Conditions

Some policies exclude specific medical conditions or require a certain severity level before approving benefits.

To respond to this type of denial, claimants should review the insurance policy to confirm coverage for their condition, request clarification from the insurer if the denial is vague, and seek legal advice if the exclusion is being applied unfairly.

Steps to Take After a Short-Term Disability Denial

Review the Denial Letter

The insurer must provide a written explanation for the denial, including the specific reason for the denial, any missing or insufficient medical documentation, and the deadline for filing an appeal.

Claimants should compare the denial reason to their benefits booklet to determine if the insurer is misinterpreting policy terms.

Gather Additional Medical Evidence

If the denial is based on insufficient medical proof, claimants should strengthen their claim with additional documentation.

Steps to strengthen the claim include requesting a detailed physician report outlining how the condition affects work, obtaining specialist evaluations or diagnostic tests, and submitting records showing ongoing treatment and compliance with medical advice.

File an Internal Appeal

Most insurers require claimants to complete the internal appeal process before taking further action.

Steps for a successful appeal include identifying and addressing the insurer’s concerns from the denial letter, submitting new medical evidence that strengthens the claim, and providing a formal appeal letter explaining why the denial should be overturned.

Legal Options for Denied Short-Term Disability Claims

If appeals fail, legal action may be necessary.

Seeking Legal Advice

A lawyer can review policy terms and determine if the denial was improper. If the insurer violated Ontario’s Insurance Act, legal action may be warranted.

Filing a Lawsuit Against the Insurer

Legal action may be necessary if the insurer ignored medical evidence, the denial was based on an unfair policy interpretation, or the insurer delayed processing the claim without justification.

Claimants can also file a complaint with the Financial Services Regulatory Authority of Ontario (FSRA) if they believe their insurer acted in bad faith.

How Achkar Law Can Help

Achkar Law assists individuals with filing short-term disability appeals, negotiating with insurers to overturn unfair denials, and taking legal action against insurers when necessary.

For legal guidance on a denied short-term disability claim, contact Achkar Law today.

Call toll-free: 1-800-771-7882 | Email: [email protected]