Discover the critical differences between employer medical boarding processes and disability insurance criteria as highlighted by the National Financial Ombud Scheme of South Africa. Learn how these distinctions can impact your disability claims.
Image: Motshwari Mofokeng/Independent Newspapers
A medical report does not automatically qualify an employee for disability insurance, according to the National Financial Ombud Scheme of South Africa (NFO).
It said, while medical reports serve as key evidence, the employer’s medical boarding policy may differ significantly from the criteria used by insurers to determine eligibility for disability benefits.
The (NFO) describes itself as a single, one-stop, dispute resolution service made up of four former longstanding industry ombud schemes: the Ombudsman for Short-Term Insurance, the Ombudsman for Long-term Insurance; the Credit Ombud and Ombudsman for Banking Services. Services are provided free of charge.
According to the NFO, medical evidence forms part of a broader application process that assesses the nature and extent of the disability, as well as the individual’s ability to perform their duties, whether in their current occupation or an alternative role.
The NFO says it regularly receives complaints from employees who have been dismissed due to incapacity or medically boarded by their employer, but later find their disability claims denied.
“The employee and the employer operate under the assumption that if the employer’s doctor has declared the employee disabled for work, the insurer would pay his disability benefit. This is not correct. “The employer’s boarding or incapacity process and an application for disability benefits from an insurer in terms of the policy contract are two distinct processes,” says Denise Gabriels, lead ombud of the Life Insurance Division at the NFO.
Gabriels highlighted two cases where employees were medically boarded but had their disability claims declined. In one instance, a Code 14 truck driver suffered vision loss in his right eye, undergoing multiple medical procedures. When he applied for income disability benefits through the group scheme’s insurer, his claim was declined as it did not meet the policy’s medical criteria.
One year later, while still receiving specialist treatment, his employment was terminated due to ill health. His employer did not assist him with the claim process, instead advising him to appeal the insurer’s decision.
Under the policy terms, the driver needed to be classified as disabled under the Own Occupation clause, which meant he had to be unable to perform duties specific to his job. However, given his profession, the policy automatically referenced Any Occupation, meaning he had to prove that he was unable to perform any other role in the open labour market.
Although the insurer acknowledged his inability to drive a heavy-duty truck, they deemed him capable of performing other tasks, including driving a light motor vehicle. His appeal was denied because he could still undertake alternative employment. Meanwhile, his employer terminated his services before the claim was finalised, without considering redeployment to a different role. The NFO stepped in, questioning whether it was reasonable to expect a 57-year-old truck driver with impaired vision to re-enter the labour market.
Following further discussions, the insurer reconsidered and approved his claim. “The NFO asked the insurer to reconsider its decision based on fairness and equity. Following further consideration, the insurer agreed to pay the claim. “In deciding on disability claims, insurers have a responsibility to be fair and unbiased. The insurer should consider the individual's specific circumstances and attributes when assessing the risk,” Gabriels says.
In another case, an underground load driver was medically declared unfit for his job due to a respiratory condition by an Occupational Medical Practitioner (OMP). When his claim for disability benefits was denied, he lodged a complaint with the NFO.
His employer had found him unfit for underground work, could not offer an alternative position, and terminated his employment. However, the insurer noted that his respiratory pathology was mild, and while he was deemed unfit for underground tasks, no medical restrictions prevented him from operating the load driver vehicle.
Following treatment, his condition improved, and he was no longer on chronic medication. His claim was declined as he did not meet the policy’s strict criteria requiring a continuous, permanent, and total inability to work in his own occupation or a suitable alternative. The insurer considered a follow-up assessment that showed his medical condition was stable, his respiratory examination was normal, and his daily function was unaffected. Despite this, the OMP still declared him permanently incapacitated from underground work. His employer, unable to offer surface work, terminated his employment.
The NFO ultimately ruled in favour of the insurer, concluding that while he was medically boarded, his medical evidence did not support total disability in terms of the policy. “The availability of work within the mine and or in the open labour market is not a relevant factor in determining whether a person is disabled in terms of the policy. In this instance, the medical evidence did not support that the complainant was permanently unfit to work as a Load Driver or take up a suitable alternative occupation.
“The NFO could not assist this complainant, and the complaint was therefore dismissed,” Gabriels explained. These cases underscore the critical distinction between employer medical boarding processes and insurance policy criteria. Employees must understand that being medically boarded does not guarantee disability benefits under an insurance policy, she says.
Gabriels says insurers assess claims based on contract definitions, which may differ from medical assessments. Alternative employment opportunities may influence claim decisions, even if the individual is unable to perform their current job.
Employees should carefully review their policy terms and seek guidance if their claim is denied. With growing concerns over disability claims, the role of ombud schemes like the NFO remains vital in ensuring fairness and accountability in the insurance sector, she says.
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