Every day in North America, disability claim adjudicators grapple with a crucial question: Can this person work? Making that determination is a complex process that involves gathering functional information from the claimant, their employer, treatment providers, in-house medical consultants, and others.

In the end, the decision is rarely clear cut, but one scenario that can make it easier to ascertain if a claimant can work is uncovering that they are, in fact, working. Making this determination can help reduce disability benefit fraud and help make this vital insurance product more affordable for all.

Whether the revelation that a claimant is working comes from an anonymous tip, surveillance finding, internet search indicating they have an online business, or a medical record reference, it can often have an immediate impact on the claim.

Another way to identify possible instances of a claimant working while on claim is by periodically requesting available tax information on the right claims at the right time. As an adjudicator, you will have excellent insight into whether there is a question about why the claimant has been unable to return to work. Examples could include subjective symptoms or limitations that do not seem well supported, red flags that the absence is potentially driven by a workplace dispute rather than medical reasons, or the medical condition is one that typically resolves but has greatly exceeded the normal recovery time.  

These forms can provide important details on income sources which can be compared to claim statements. 

As for what to request

• In Canada, consider starting with the Personal Tax Return (T1) and Notice of Assessment. The Personal Tax Return will provide important details on income sources, and the Notice of Assessment will provide you with assurance that what you see on the Personal Tax Return is what the claimant filed with the Canada Revenue Agency. If you become aware that the claimant has ownership in an incorporated business, the Corporate Income Tax Return (T2) with Notice of Assessment will complete the financial picture in combination with the T1.
• In the U.S., consider using the IRS Form 4506 Request for Copy of Tax Return to directly obtain Federal Tax Returns from the IRS (Personal Form 1040 or Business Forms 1120 or Form 1120S with K-1s). Be aware that state regulations may prohibit your ability to obtain tax returns. In those instances, insurers should determine what other options are available, such as business profit and loss statements or bank statements. Some of these risk factors are related. For example, long work shifts combined with high levels of paperwork and/or lower compensation often lead to lower job satisfaction. In addition, some factors can change over time (either favorably or unfavorably from the perspective of the medical professional) which can lead to a different pattern or level of morbidity.

These financial document requests are typically easy for claimants or their accountants to accommodate and cost-effective compared to other types of research or investigation. In our experience, when there are indicators suggesting claimants could be working, sometimes the claimants do not respond to the financial documents request and this scenario may lead to a claim closure due to non-response. It is important to set a deadline for receipt of the financial documents, as this helps ensure that claimants are aware of any potential impact on their upcoming benefit payments if they delay in responding to the request.

In the event a claimant challenges or refuses to provide the financial information requested, claimants can be referred to their policy provisions that require ongoing proof of disability. Most policies reference requirements to furnish periodic support for continued disability, which would include these financial requests and documentation confirming that no gainful work has resumed or been initiated while on claim.

Including this financial component of disability evidence in your claim and checking for unreported or hidden income through a quick online search for any goods or services being offered by the claimant, can give you confidence that the important non-medical aspects of the claim have been thoroughly reviewed. It is easy to see why even one claim being closed as a result of these financial requests can make the extra validation effort worthwhile. Failure to consider the possibility of a claimant earning a second or alternate income while on claim could have a negative financial impact for an insurer.

So, if you find yourself musing, “I would have expected this claimant to be back to work by now!” consider conducting a financial review to determine if they have resumed work