In a long term disability (LTD) claim, the elimination period is the number of consecutive days over which a claimant must be disabled in order to begin receiving monthly benefits. Its usual timeframe is either 90 or 180 days. In some policies the elimination period is called the waiting period. Some employer-provided disability plans also offer short term disability (STD) benefits. If this is true of your benefit plan, then the duration of the elimination period is equal to the amount of time that you’ll receive your STD benefits.
The elimination period serves two functions. First, it should come as no surprise to learn that the insurance industry initially created it as a cost-saving measure. Its secondary purpose though is to allow for a time period sufficient enough to determine the likelihood that a claimant’s medical condition will improve.
The Second Circuit Court of Appeals has revied the question of whether a claimant had satisfied the elimination period that would trigger his benefit eligibility. In Sobhani v. Reliance Std. Life Ins. Co., 2015 U.S. App. LEXIS 22041, the circuit court ruled that it was reasonable for Reliance Standard to require the plaintiff to show he had “completed the Elimination Period”. In fact, evidence within the administrative record revealed that for several weeks during that timeframe Sobhani had worked 30-35 hours per week.
Many LTD claimants are not fully aware of what an elimination period is. Unfortunately, due to this unawareness some claimants take actions that harm their claims, such as working part-time or doing some work-like activities on a contractual basis. Of course, it’s certainly understandable that some persons aren’t mentally or financially prepared to go without any salary over a considerable length of time. However, partaking in policy-excluded activities to offset lost wages can put a claimant’s entire disability benefits package at risk.
Legal issues associated with completion of the elimination period show why it is extremely important for claimants to carefully read their LTD policies and talk consult with a disability lawyer, prior to filing a benefit application. These steps can prevent a claimant from making costly mistakes during the initial application process.