What should I do? My LTD insurer sent me some confusing forms to sign in regards to CPP Disability

Dear David,

Thank you for your generous help to people with disabilities. I am sharing your wonderful website with everyone who is in need of legal advice.

I am currently on LTD and recently received a package from my insurer requesting to apply for CPP disability benefits.

There were some forms enclosed:

  1. Consent for Service Canada to Obtain Personal Information.
  2. Consent for Service Canada and Insurer to Communicate Disability Benefit Information.
  3. Irrevocable Consent to Deduct and Pay Insurer.
  4. Agreement Regarding CPP Disability and LTD Benefits.

Agreement Regarding CPP Disability and LTD Benefits

Please continue to pay normal benefits to me under this LTD plan while my application for disability benefits under the CPP is being adjudicated by the appropriate Government authority._

I recognize that (insurer’s name) has the right to estimate the amount of CPP benefits, which may be awarded to me, and to deduct such amount from the LTD benefits payable to me under this group insurance plan. I understand that (insurer’s name) reserves the right to resume estimating my CPP entitlement at any time and the right to resume payment of the lesser amount at any time.

In consideration of (insurer’s name) agreement to continue the payment of LTD benefits without reduction of estimated CPP benefits, I hereby agree:

  1. to forward a copy of the decision rendered by CPP with respect to my application for disability benefits
  2. to appeal if requested by (insurer’s name) and forward a copy of appeal
  3. to reimburse (insurer’s name) if I’m awarded CPP disability benefits
  4. should I fail to reimburse (insurer’s name) may exercise any legal right to collect the overpayments
  5. that a copy of signed agreement may be provided to my employer by (insurer’s name).
  1. Should I sign any of these forms? If not, how should I justify my refusal to sign? Will I get into trouble if I refuse to sign?
  2. What is the purpose of Agreement Regarding CPP Disability and LTD Benefits form? Why should I sign it?
  3. They already sent a copy of the letter where they are requesting me to apply for CPP disability benefits to my employer. Do they have the right to inform my employer of these specific details?

Thank you so much for your response in advance!

I am not a lawyer-but big wow to that agreement. I would think it is a privacy violation to notify your employer that they have requested that you apply for CPP-D.
You would need to review a copy of the Master Policy and see if the Insurer has the right to estimate and deduct CPP-D.
I take issue that CPP-D is awarded to you. Either you are entitled or you are not.
You are not awarded your disability benefits each month-you are entitled.

Likely have the clause below

The clause in my husband’s policy is ; The income used in the offset and coordination provisions is the income payable for the same period as the income benefit under this policy.

Except for retirement benefits, all income is considered payable when a person is entitled to it, whether or not it has been awarded or received. If it has not been awarded, Great-West Life will have the right to estimate it according to the terms of any plans or legislation involved. Retirement benefits are considered payable when they are actually received.

Since Service Canada and that process determines entitlement he has refused to sign the forms as it is not required under his policy.

If you don’t sign it I suspect they will reduce your benefit. My husband has been told they will reduce his benefit and I advised he would file a claim-but he has many other issues.

Hi Elaine, I very much appreciate your kind words!

I will answer you questions in order:

Answer to Question 1 - I typically recommend people sign forms 1, 2 and 3. Form 4 is another matter and I will discuss below. If you want to avoid any disruption in your LTD payments (while your CPP claim is outstanding), then you need to sign these forms (including form 4). If you are ok with them reducing your LTD payments (while the CPP claim is outstanding), then you don’t need to sign these forms. So, if you are ok with them reducing your LTD payment by $900-$1200 per month, then you don’t have to given any justification, just say you don’t want to sign the forms. If you don’t want to deal with the reduction in LTD payments, then you have no choice but to sign these forms. I expect they have the right to do this reduction under the Policy – if for some reason they didn’t have the right to estimate and deduct CPP-D, then you could refuse to sign, and legally they shouldn’t do the deduction. Sounds like in your case they probably do have the right to estimate and deduct.

Answer to Question 2 - The purpose of Form 4 is that the insurance company is offering NOT to enforce its right to estimate and deduct, if you agree to the conditions listed on the form. Now, the way your form 4 is worded, I don’t actually have any problem with it, as long as you make sure you are diligent in doing appeals of the CPP disability claim if denied. This Form 4 has very different wording from insurance company to insurance company and what you have posted above is not bad, in my opinion.

Answer to question 3 - This is a grey area. The insurance policy gives them certain rights to communicate some of your personal information to your employer, but I am not sure if this was proper for them to do. What are your concerns about it?

Thank you! Good luck to you and your husband!

Hi David,

Thank you so much for your response.

I was thinking to call my insurance and ask them to clarify the details on the forms. Then I will most probably respectfully decline their request to sign forms 3 and 4 if they don’t mind me doing so.

The only thing, for instance, I refuse to sign the forms and my insurer decides to deduct estimated CPP payments from my LTD benefits. It usually takes CPP adjudicators 4 month to complete the process. And I may receive up to a maximum of 12 months of retroactive payments from the date my application was received.

Will they pay me CPP benefits for the four month that I’ll be waiting for them to finish the adjudication and come to a decision?

Is this a loophole in the above agreement that even if Elaine signs-they could still go and estimate at any time?

You could ask the Insurer to provide you the provision in the policy that states they have the right to estimate and deduct. I would do so in writing. They will mind you not signing the form.

The only form my husband sent back, as reasonable was form 1606 Consent for Service Canada and Insurer to Communicate Disability Benefit Information." Authorization to Communicate Information, CPP" He chose option 2 on the form and only option A B C and D. He said no to E

But Elaine if you are not having issues with your Insurer then by not signing you will most likely have your benefits reduced.
Whether they are allowed or not is in the Master Policy.

In my husbands claim he signed a form whereas if they asked him to apply and if needed appeal then they would advance him full benefits -he had to agree to pay any overpayment within 30 days.

That is why we are putting up a strong issue on not signing.

If all is going reasonably well with your Insurer I would likely sign, unless you can afford not too.

Yes that is a loophole of sorts. They are not giving up right to estimate and deduct, only agreeing to not start deducting as long as you follow the agreement.

They are not going to make exceptions to allow you not to sign all 4 forms. All 4 are necessary for the legal effect they want.

I don’t see why you wouldn’t just sign these forms unless you feel an LTD termination of benefits is imminent. You will avoid lots of potential headaches and overpayment issues.

I’ll just call them this week to clarify the details on the forms. I don’t really mind if they reduce my payments for the time being. I’ll keep you updated.

And I find it much easier to receive the payments if I am entitled to and forward the overpayment amount to my insurer myself rather than dealing with all these forms.

Good for you Elaine! I don’t like these forms at all! If you are still in your own occupation of disability I am not sure how they get away with estimating and deducting. If there is a clause in your policy it better be crystal clear or your Insurer is not on solid ground.
I know my husbands Insurer say they believe he is entitled to CPP-D and point out that his doctor supports the application-but only Service Canada and that federal system has the exclusive right to determine entitlement.
He falls under the adjudication guidelines of a complex claim-so he has a high chance of a denial the first try.

He also has a very poisoned relationship with his Insurer due to their admitted mishandling and negligence during medical rehabilitation scheme.

I agree with you that it is quite easy to write a cheque or get a bank draft and send to the Insurer. It will be hard for us to have his benefits reduced but we will manage. We will also go forward with filing a claim if they do-but on all issues, not just the reduction.

Elaine I did an edit to a previous post. The only form my spouse sent back was Authorization to Communicate Information, CPP Form 1606. I don’t think your Insurer requested this form.
There is a requirement that my husband sign necessary authorizations-so to be safe we sent back only that form.

if you don’t mind benefits being reduced in the meantime, then I agree there is no reason for you to sign the forms.

My cpp application has been delivered today to Service Canada. Also I made a call to my insurer regarding the forms. I tried to opt out from signing the forms but she was really insisting that I signed the agreement. When I asked her why it was so important she noted that it was my duty to sign it as it was included in the policy. Of course, I asked her to provide me with a copy of the policy and she conveniently referred me to my employer stating that my insurer was not allowed to disclose it to me.

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My husbands also was signed for -same day as yours. Let the waiting begin

Hi David,

My insurer asked me to send them a letter outlining the reasons why I wouldn’t want to sign the agreement. She said that it would help them to decide if they needed to reduce the payments.

What should I do in this case? Should I really send a letter? Isn’t it a little too much?

Wait for Davids response, but I would send a basic one liner that it is not required by the policy and you feel uncomfortable that the consent form is irrevocable. Then next sentence I would ask why they want me to sign it.
Be humble and respectful-always.

I really don’t have anything else to add. My view is you should sign these forms and avoid any future overpayment or deduction headaches.

I disagree. I don’t think anyone should sign an irrevocable consent form,except for those who may have any large deposit seized for outstanding judgement or other garnishments. You can sign the forms and your Insurer can cut you off the following week. Then the retro-pay will still go to your Insurer,
My husband agreed to sign it if his Insurer would agree to sign an irrevocable agreement to continue full benefits up to and including all appeals for CPP-D. They don’t want to do that. Go figure.

That said Elaine, your Insurer will not like that you will not sign the forms and may look at your claim more closer than you would want.

If you feel that your claim maybe denied in the near future-don’t sign the forms.

Thank you, David.

She said they don’t mind if I skip the first three forms but they cannot let go of the fourth one. She said it’s all in the policy and they just trying to make sure they would’t lose my CPP money.

This makes me question why it is so important that I sign this form. If the policy already takes into account all these measures then why do we need to “renew our vows” again? Why not just simply reduce the ltd payments and not keep insisting on signing the fourth form or requesting a written explanation?

If you are ok with an estimated deduction then you are right-they should not need any written explanation