What is a pre-existing condition clause?

By: Joanne Martelli

A pre-existing condition clause states that a plan member will not receive Long Term Disability benefits if they are disabled due to an illness they received treatment for during a specified period of time before and after becoming eligible for group benefits. The length of this exclusion period varies from contract to contract.

This clause is a standard—but often overlooked—provision in group benefits contracts. Insurers include it for new hires because medical evidence of insurability is not required for new plan members. This is an advantage to the newly hired employee.

However, the insurer does not want to risk a costly LTD claim for an illness the new employee already has, since it has no medical information for guidance. So they include the pre-existing condition clause.

Plan administrators often fail to review this clause with new hires, and new employees may mistakenly believe they automatically have this benefit. (They would, however, be eligible if they were to be diagnosed with a new illness or disease.) This oversight can lead to unnecessary confusion and emotional stress for an employee.

You may have heard about the case of an Ottawa woman who was recently denied LTD benefits. Before joining her new employer she had seen a doctor regarding a lump in her breast. At the time her medical team determined it was benign.

A few months after joining her workplace benefits plan, she was diagnosed with breast cancer, went off work and began treatment. She was shocked that she was not eligible for LTD benefits because her insurer deemed the illness a pre-existing condition. Her story made CBC’s The National.

This case illustrates why it is important for plan administrators to review the pre-existing condition clause with all new employees. Doing so can save your employees the additional stress of finding out they are not eligible for LTD for a pre-existing condition until the exclusion period passes.

Joanne Martelli is a Support Services Representative at BHH Benefits in Stoney Creek. She can be reached at 1-800-514-4944, ext 233, or at j.martelli@bhhbenefits.com