LTD Recalculation Request

I would like some advice regarding the following:

I became disabled in Oct 2015 after several years of working only 4 days a week. When I stopped working, I received a letter from my employer that my disability benefits are 70% of the reported insured annual salary, i.e., 70% of my full annual salary. But when Sunlife approved my claim, they calculated it as 70% of my earnings for 4 days per week, which is much less than what the employer indicated. I contacted my Compensation Advisor to clarify and she confirmed to both me and Sunlife that I should be getting 70% of the full unreduced salary and that I was always an “Indeterminate – Full-Time employee”. I then asked Sunlife in April 2017 to recalculate my benefit as 70% of the full unreduced annual salary, but they refused, claiming that their ‘current practice is to consider the salary earned for the amount of hours a week actually worked during the 12 months prior to your date of disability…’. I checked the Policy and it had the following:
“…the Monthly Benefit shall be 70% of Insured (emphasis mine) Earnings, as at the date of completion of the Elimination Period, divided by 12, less all Other Income earned in or attributable to a particular month”
My Compensation Advisor also confirmed that my DI deductions were not prorated, i.e., they were always made at the unreduced, full-time salary rate (so my “insured earnings” were my full-time salary rate). Because the Policy referred to ‘Insured earnings’ and the Compensation Advisor assured me that I should be getting 70% of the unreduced salary, I requested Sunlife again to recalculate the benefit as 70% of my full salary (as opposed to 70% of 80%). I then followed up with my Case Manager at Sunlife and his reply, from Sept 13, 2017, was that:

“… I have referred this request to a manager, as well as our Senior disability program consultant. This request had then to be addressed by the Treasury Board of Canada, and is now being handled by our Director. My apologies for the delays, but this is not a request which I can handle “ASAP”. The only thing I can do is inform you if I have heard back from our Director, and at this point in time, I have not. I will inform you as soon as I am able to provide you with an update on this matter.”

My questions are as follows:

It seems unreasonable that this is taking so long to resolve. I started receiving benefits in Jan 2016, asked for the recalculation in April 2017, it is already Sept 2017, and soon it will be 2 years since I stopped working in Oct 2015. It’s a substantial amount of money that I am not receiving. Should the Compensation Advisor/HR not resolve this on my behalf? Is there anything I can do to ‘push’ Sunlife to resolve this more quickly?

Thank you very much

Yes, it shouldn’t take 2 years.
Do you know the name of the Director?
Can you get your employer to bug sunlife?
I would probably get a lawyer to bug sunlife.
You’ll get the back payments.
There is a way to get the CRA to consider the back payments in the years they should have been in.
70% is really good. :slight_smile:

Two year statute of limitations is coming up quickly—how much. Personally I would file a claim in small claims if the amount meets the guideline.

Of course it is 2 years for each month due…(most likely) but the cost of a small claim action may be worthwhile.

Give them a date-then file a claim

Unfortunately, I am not surprised that this is taking so long. I recommend you contact us (or another experienced disability claim law firm) for a confidential consultation ASAP.

Generally speaking, situations like this are very nuanced. As a general rule, before anyone does a voluntary reduction in hours at work, you should apply for LTD benefits at that time. Once a person starts working reduced hours, and then later apply for LTD, you will be in a situation where your LTD will be calculated as a % of the now lower salary.

I can’t speak to the specifics of the above situation, but generally employers have an obligation to annually report to the insurer any changes in employee salaries. The fine print in the master policy usually states that employers have this obligation. So while the policies do refer to “insured salary” or something to that effect, this does not get around fact that employers have to provide updates annually in some cases. It is actually quite common for the employer to forget to send in the updated salary information and this can have disastrous consequences for employees.

We have seen many situations like this and there are many possible ways this plays out but one common way is that the employer ends up getting sued as well for negligence in failing to report the salary change. That may not apply to the person above, but it is one possibility. It is also possible the employers duty to report increases is not so clear. This will get more complicated if it involves a collective agreement.

Bottom line, if you are dealing with a situation like above get confidential legal advice ASAP. Don’t just listen to what people at work are telling you, or the insurance company, because they both looking after their own interests and will point the finger of blame at each other or at you.

David Brannen

Disability Lawyer with Resolute Legal

The response posted above is based on the limited factual information made available and is not intended as a full and complete response to the question. The only reliabile manner to obtain complete and adequate legal advice is to consult with a lawyer, fully explain your situation, and allow the lawyer enough time to research the applicable law and facts required to give an adequate opinion. The basic information provided above is intended as a public service only, a full one-on-one discussion with a lawyer should be done before taking any any action. The information posted on this forum is available to the viewing public and is not intended to create a lawyer client relationship with any person. If you want one-on-one advice, please click here to request a free consultation or call toll free 1-877-282-5188 to speak with a member with our disability claim support team.

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Thank you very much. How would I go about getting the confidential legal advice from you? I think I have most of the facts/documents.

Hi Margaret,
See the bottom of David’s post.