Depression Disability: Can the Disability Insurance Company Limit Payments to 24 months?
Most group disability insurance plans will not pay you if you are disabled due to an mental condition like depression or anxiety. Using a clause called that limits benefits for “mental & nervous disorders,” it is extremely common for Long Term Disability companies to stop disability payments after a set period of time. Most LTD insurance plans limit benefits for things like depression, anxiety, or PTSD to 2 years (24 months). These limits usually do not apply to organic mental conditions (alzheimers or dementia, for example), but
Is it legal for the disability insurance company to pay only limited benefits for mental disabilities? Unfortunately, yes. Most states do not have laws that prohibit these types of provisions, and courts have upheld these limitations, usually on the grounds that people can contract for anything legal that they wish. These limitations are most commonly found in employer group plans regulated by a federal law called, ERISA, through many private disability insurance policies have them too.
When your employer buys a group disability plan, the people negotiating with the insurance company for your employer likely had no idea they were buying limited coverage for employees’ mental disabilities. We have even represented a member of the benefits team of large employer who bought the company’s group disability insurance. She later became disabled due to anxiety, and told us that she had no idea that her LTD benefits would get cut off after two years.
Understanding your coverage and knowing how long it will pay is important to planning and dealing with your disability. Read your employer’s disability plan or private disability policy today to find out what limitations they may use to limit your disability payments.