Can an Insurance company reduce long term disability benefits? This is a question which frequently comes up in long term disability benefits claims.
Although the problem is really not so simple, the starting point in answering the question is found in those documents commonly referred to as the “Plan Documents.” These are the documents governing the benefit entitlement. In cases in which the federal statute is known as ERISA (Employee Retirement Income Security Act), the statute itself does not determine whether the Insurance Company can reduce long term disability benefits. Similarly, state statutes which govern non-ERISA do not provide the answer to the question.
Although the problem is really not so simple, the starting point in answering the question is found in those documents commonly referred to as the “Plan Documents.” These are the documents governing the benefit entitlement. In cases in which the federal statute is known as ERISA (Employee Retirement Income Security Act), the statute itself does not determine whether the Insurance Company can take the offset. Similarly, state statutes which govern non-ERISA do not provide the answer to the question.
You must look to the “Plan Documents” which, in most instances, is the Insurance Policy. If there is language providing for an offset of Social Security Benefits, then the Insurance Company is allowed to take the offset. Typically, Social Security benefits are not the only monies you might receive which can be offset. Other offsets might include workers’ compensation, pension benefits, settlements of lawsuits relating to the disabling medical condition and the like can also be offset.
The specific amount which can be offset is something which needs to be carefully considered. The experience of this writer is that the Insurance Company will typically overstate the amount to which they are entitled. In fact, in most cases involving Social Security benefits, the Insurance Company will claim that they have overpaid benefits and seek recovery of all, part or even more than the initial lump sum paid by the Social Security Administration. This is an issue for which you should consider an attorney review. The specific details vary from plan to plan but the important income stream represented by your entitlement to Long Term Disability benefits is one that should be carefully protected.
Please keep in mind that the foregoing is not intended as legal advice applicable to any individual person’s unique legal situation. Its sole purpose is to give a general idea of the existing status of the law as it applies to the point of law addressed above. You cannot rely on the foregoing as legal advice. You cannot make legal decisions based on its contents. If you have questions arising out of this point of law, you should contact an attorney who routinely handles claims involving policies of disability insurance. The law offices of Herbert M. Hill, P.A. handles such cases and would welcome the opportunity to discuss your case with you, at no charge. You can contact me at 407-839-0005 or at hmh@herbertmhill.com.
If you would like, after discussing your case, we can set a conference. That conference would be free of charge and you would be under no obligation to hire me nor would you feel any pressure from me to do so.
Herbert M. Hill, P.A. is a law firm located in Orlando, Florida with a practice extending throughout the state of Florida and the southeastern part of the United States, including Georgia and Alabama. Areas of practice include disability and employee benefit claims of all sorts. The firm handles any claims arising under the Employee Retirement Income Security Act (known and referred to as “ERISA”) for disability benefits, medical benefits, retirement benefits of any sort, including pension, 401k, termination agreements or the like as well as claims arising under private disability policies.
The Law Offices of Charles H. Leo, P.A. is a law firm located in Orlando, Florida, whose practice focuses on Workers’ Compensation and Job-Related Injuries.
