Recipients of disability benefits should be forewarned that the variation among and between group and individual disability plans makes it difficult to offer any generalized information regarding the effect of return-to-work activities.  The following discussion, therefore, should not be viewed as a detailed road map, but as an overview of the sorts of issues that may arise as a result of such activities.

Whether benefits will continue under a particular plan or policy of disability insurance will largely depend on the definition of disability contained in the plan or policy.  Broadly, such definitions may be categorized as either “own occupation” (inability to perform the duties of one’s own particular occupation) or “any occupation” (inability to perform any occupation for which one is qualified by education, training, or experience).  Some plans may switch from one definition to the other after a period of time (typically from “own” to “any” occupation after 24 months of benefits).  Work activities that are distinctly different from the duties of one’s prior occupation might have no effect on “own occupation” benefits, but the same activities could lead to the termination of “any occupation” benefits.  Some disability definitions contain specific provisions prescribing the amount of earnings during disability below which benefits will not be affected.  In short, evaluating the risk posed by return-to-work activities requires a careful reading of plan provisions, in conjunction with a close analysis and comparison of those activities with prior occupational duties, experience, and earn­ings history.

Some plans contain “residual,” “partial,” or “rehabilitation” disability provisions.  These may authorize return-to-work activities, but typically also prescribe formulas for reducing the amount of benefit payable based upon the earnings from these activities.  These provisions may also require that the claim administrator be notified, and approve, all return-to-work activities.

If disability benefits are terminated because of a return to work, consequences vary.  Typically, an individual policy can be continued in force subject to the policyholder’s resumption of premium payments.  This is not a bad idea, since the purchase of a new insurance policy may be prohibitively expensive (or impossible) given the pre-existing history of disabling illness or injury.  In contrast, an employer-sponsored group plan typically terminates with the cessation of benefit payments, leaving the participant without coverage (except, in some plans, for a disability that arises from the same condition and which “recurs” within a specified period of time).  Individual coverage will be difficult to obtain, so the only reasonable possibility for replacement coverage will be through employment -- either with the participant’s former employer (in which case the participant will be re-enrolled in the group plan) or a new employer (consequently, it is important to verify that a new employer provides such coverage).  Employer-sponsored group coverage, unlike individual insurance, is commonly provided without proof of good health.  However, if the plan is provided by a new employer, it may restrict benefit payments for a pre-existing condition only to those disabilities that occur after a prescribed period of time.