Many long term disability recipients remain “employed” with their employer, perhaps listed as an “inactive employee”. But let’s say there has not been a formal separation – either by resignation or termination. Can one “quit” the job while receiving long term disability (LTD) benefits?
Yes, you can quit your job while on LTD benefits, but it’s important to understand the potential consequences before you do. Whether it’s a wise decision depends on your specific situation and the terms of your disability policy.
Factors to Consider Before You Quit
Here are some key things to consider:
1. Your Eligibility for Ongoing LTD Benefits
In most cases, quitting your job doesn’t automatically stop your LTD benefits. If you’re already approved and receiving benefits, they usually continue as long as you still meet the policy’s definition of “disabled.” However, some policies require that you maintain an employment relationship with your employer, so it’s important to check your plan documents or speak with an attorney before you quit.
2. Impact on Health Insurance and Other Benefits
If your employer provides your health insurance and you quit, you may lose that coverage. You may be eligible for COBRA, or you may need to find private insurance. This can be an important consideration if you’re dealing with ongoing medical issues.
3. Future Employment and Vocational Rehabilitation
Some LTD policies include rehabilitation or return-to-work programs. Quitting your job could affect your participation in these programs or how the insurer views your potential for future employment. If the insurer believes you’re not cooperating with return-to-work efforts, it may use this as a reason to review or even terminate your benefits.
4. Is There a Separation Agreement or Severance Agreement?
Many employers require a separation agreement or severance agreement as a condition of separation. If there is a separation/severance agreement, one should carefully review the terms and conditions of such agreement to ensure that the claimant is not giving up their LTD claim as a condition for receiving the severance funds.
5. Employer-Sponsored LTD vs. Private LTD
If your coverage is through your employer (group LTD), leaving your job generally won’t affect existing benefits if you’re already receiving them. But if you haven’t been approved or are in the appeals process, quitting could complicate your claim. Private LTD policies, on the other hand, usually aren’t affected by your employment status once you’re approved.
RELATED POST: Differences Between Group and Individual Disability Insurance
The bottom line is that you can quit your job while receiving long-term disability benefits, but it’s not a decision to be made lightly. Depending on your specific LTD policy, your termination could affect your benefits, health care coverage, or your insurer’s assessment of your continued eligibility. Always take the time to review the terms of your plan and consider seeking legal advice if you’re unsure.
For detailed guidance on how to approach resignation due to disability, including how to communicate with your employer, read our article on resigning due to a disability.
Schedule a Free Case Evaluation Today
At the Ortiz Law Firm, we understand how overwhelming it can be to navigate a long-term disability claim—especially when you’re also trying to make major life decisions like whether to leave your job. Led by attorney Nick Ortiz, our firm focuses exclusively on disability law, helping people across the country secure the benefits they’re entitled to.
We’ve handled thousands of appeals and lawsuits involving group (ERISA) and individual disability insurance. If you’re dealing with a denied claim, we offer free case evaluations, and there’s no obligation to move forward unless it’s the right fit for you. If you need help appealing a denial, contact the Ortiz Law Firm today to speak with someone who understands what you’re going through and knows how to help.
