The Blurred Lines of Accommodation: Insurance Meets Employment Law

November 4th, 2013 by

For insurance carriers and employers, managing disability claims during and after an employee’s employment presents many challenges. Issues may arise about the collection of medical information, accommodation of the disabled employee, coverage, set-offs for other disability benefits, and related claims.

One of the most problematic issues is who is responsible for determining when a disabled employee should be accommodated. Is an accommodation triggered when insurance benefits are denied? Is the employer off the hook for accommodating a disabled employee if the insurance carrier determines the employee is totally disabled?

More often than not, an employer contracts out all or part of its disability claims management to a third party. The disability insurance carrier determines if the employee is entitled to benefits under the employer’s benefit plan and sometimes weighs in on whether the employee can return to work.
The insurance carrier may deny benefits, but the employer is still required to accommodate employees if they are disabled. On the other hand, the insurance provider may find employees to be totally disabled from their own occupation (or current job) and the employer may still be required to accommodate them up to the point of undue hardship.

The line between the entitlement of benefits and the requirement to accommodate is often blurred. But what is clear from the case law is that an employer’s obligation to accommodate an employee is triggered the moment the employer is aware of the employee’s disability. Employers can be required to develop policies and procedures on accommodating disability in the workplace with their disability insurance carrier (See Puleio v. Moneris Solutions, 2011 HRTO 659).

Denying benefits or failing to accommodate could result in legal action by the employee against both the employer and the insurance carrier. At DSF, we have lawyers who are uniquely cross-trained in employment law and insurance defence to assist insurance carriers and employers with the challenges of managing disabled employees. For more information, contact Marty Rabinovitch.


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