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Carrier position on COVID-19 related Short Term Disability claims

Author Kellee Lemcke

Canadian insurance carriers are moving towards a more uniform position for administering insured Short-Term Disability (STD) claims related to COVID-19. Adjudication for all disability claims will proceed in the normal manner. Most carriers have now confirmed that disability benefits will be paid only when a claimant has received a positive test for COVID-19 or is medically disabled. Benefits will not be paid during a preventative quarantine.
 
Short Term Disability (STD) Administration
Given the policy provisions of group insurance and the availability of EI benefits, effective March 17, 2020, most insurance carriers in Canada will administer claims in the following manner:

  • STD claims from plan members who have COVID-19 symptoms, but have not received a positive COVID-19 test result will be adjudicated as usual for disability claims and the waiting period will apply.
  • STD claims from plan members who have received a positive COVID-19 diagnostic test will be approved as “disabled” for at least 14 days and the waiting period will be waived.

Nuances in practice persist among carriers. It is critical to review the most current documentation provided by your carrier and be aware of existing contract clauses that define disability in order to understand the administrative practices that will be applied to your members.
 
Employment Insurance
Employment Insurance (EI) sickness benefits provide up to 15 weeks of income replacement and are available to eligible claimants who are unable to work because of illness, injury or quarantine. Regular EI benefits may be payable in case of layoff or employment termination. Service Canada is currently waiving the one-week waiting period for EI sickness benefits related to COVID-19 along with the requirement to provide a medical certificate. Employment insurance benefits may be available to plan members who are not eligible for STD benefits.
 
Speak to Your Advisor
The situation is fluid and insurance carrier practices are subject to change at any time. Reach out to your Aon advisor to discuss the administrative issues outlined above and other risk issues that may be of concern, such as out-of-county medical or group trip cancellation coverage.