Under most Long Term Disability claims, claimants are required to apply for Social Security Disability benefits. The securing of Social Security disability benefits can be a long process.
Most claims are denied at the application phase and after an appeal, as well. However, once these benefits are secured, generally they are deducted from the amount of Long Term Disability benefits a claimant will receive.
The standards used by the Social Security Administration and an Insurance Company making a determination a claimant’s status as disabled are not the same and being awarded one kind of benefit does not guarantee that any given claimant will also be awarded the other. Many people have opinions about which standard is more difficult to overcome, but more and more the distinction seems to blur with other considerations that are taken into account by the different entities.
The time frame in which either or both awards are made is the critical takeaway for this discussion. If Social Security disability benefits are awarded first, the amount awarded is simply deducted from the amount of any future award of Long Term Disability benefits. If Long Term Disability benefits are awarded prior to Social Security benefits, the issue of an offset comes into play. Since Social Security Disability benefits are often awarded retroactively, claimants often receive a lump sum for that period to bring benefits current from the date of disability. Long Term Disability benefits can be wiped out by this amount for a period of time until the outstanding offset has been cleared. This happens because the insurance company has in essence paid for the portion that Social Security Disability benefits would have paid if they had been awarded in real time. The insurance company does not want you to be double dipping with their money. Sometimes this means many, many months go by in which no Long Term Disability benefits are paid or a monthly minimum, usually around $100, is paid.
More and more, we have seen insurance companies denying claims for Long Term Disability benefits because of what appears to be a claim where Social Security Disability benefits have not been awarded and do not seem likely to be awarded anytime in the near future. This is due to the fact that money their hands now is worth more to them than repayment of that money in the future. The decision to approve or deny has become a business decision more than ever, representing a conflict of interest that is the discussion of other blogs we have written.
Navigating these two types of claims can be very tricky. We are here to help. If you have any questions about your Short Term disability or Long Term disability claim, please give Herbert M. Hill, P.A. a call and we would be glad to answer any questions you may have. We are available at 407-839-0005 or, toll free, 844-454-59995, If you would like, after discussing your case, we can set a conference. In most circumstances, that conference would be free of charge but in no circumstance would you be under any 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. While the vast majority of cases handled are for disability insurance benefits, areas of practice include employee benefit claims of all sorts. The firm handles any claims arising under the Employee Retirement Income Security Act (“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.