A recurring concern in every group Long Term Disability benefits claim is the way Long Term Disability and Social Security offsets interact. Two problems commonly arise in this context.
The first issue involves situations where an individual receives Social Security benefits, leading to an overpayment of benefits. It is often during this time that claimants become aware of the insurance company’s right to offset the payments. This matter generates numerous phone calls to our office. Whether there are complicating factors or it’s simply an accounting matter, we are here to assist you in navigating through the problem at hand.
How Do Long Term Disability Payments Impact Social Security Benefits?
The other problem is when Social Security benefits are not awarded. These Long Term Disability insurance companies never intended to pay the “Gross Monthly Benefit” which is the amount generated by taking your “pre-disability earnings” and applying the agreed-upon percentage, typically 60%. So, if you earn $50,000.00 and have a 60% policy, this means you have a “Gross Monthly Benefit” of $2,500.00.
The “Net Monthly Benefit” is calculated by subtracting the Social Security and any other entitled offsets from the total amount. As time progresses and the potential offset from yet-to-be-awarded Social Security benefits increases, insurance companies start feeling uneasy as they want to secure their reimbursement. While insurance companies are required to provide a medical or vocational justification for denying benefits, it is the author’s belief that a significant number of Long Term Disability benefit denials we handle are actually based on the potential Social Security offset.
If your Long Term Disability benefits claim is progressing smoothly while your Social Security claim is experiencing delays, it is crucial to pay attention to the aforementioned issues. Nevertheless, it is highly important to file and actively pursue your claim for Social Security benefits. Failure to do so gives the insurance company the option to estimate your Social Security benefits and consequently reduce your Long Term Disability benefits, even if you haven’t actually received the Social Security benefits yet. This situation can be highly unfair and should be avoided.
Allow me to mention that the claimed offset, according to every group Long Term Disability policy I have reviewed, is for not only disability benefits you receive but also they are entitled to deduct any related dependent benefits (whether you receive them or not). Also, if the entitlement is to Social Security Retirement benefits, those would be offset, as well.
Do You Need Help With Your Long Term Disability Claim?
If you have questions about Long Term Disability and Social Security offsets or any other questions about your Long Term Disability benefits claim, give us a call. At Herbert M. Hill, P.A., Short Term Disability and Long Term Disability benefits claims are all we do and we would be pleased to answer your inquiries. We are available at 407-839-0005 or, toll-free, 844-454-5995.
