The Edge Series: What Does “When Coverage Ends” Mean?
The lawyers in our firm are focused on helping people with disability policies and ERISA claims. We want to give you the edge in understanding your policy. Today, we want to help you understand what the term “when coverage ends” means in your disability policy.
“When coverage ends” is usually defined in the policy. It can be a reason to deny your claim, even if premiums were paid.
We all understand that coverage would end on a disability policy when you die or reach normal retirement age, or for a set time when that lapses, if it is in the policy. We also understand that if you fail to pay premiums, your coverage ends.
However, if you stop meeting the definition of actively at work (which we discussed in a prior video), coverage may end.
The definition typically requires full-time work. Full-time work may mean 30 hours or more each week, so if your hours are reduced to 28 hours per week on a regular basis, your coverage may have ended, even if premiums were withheld from your paycheck. It would be terrible to learn this after filing a claim and learning that your employer may not have informed you. The insurance company is looking for a reason to deny your claim, and that will suffice.
A change in other work circumstances can also end coverage.
If your job requires you to travel out of the country for a while or if your employer is sold to a foreign company and you are no longer working in the United States, your coverage may end. Also, if your employer is struggling financially, be wary, as some employers have continued to take deductions for insurance premiums from employee paychecks, but then fail to remit those to the insurance company. That would be a problem for your employer if you lost your coverage, but you would be the one that would have to take legal action.
When your work circumstances change, it is time to review your policy.
Remember our ERISA attorneys and long-term disability lawyers are here to help if you run into problems. Contact us at the first sign of trouble with your disability claim.