Disability insurance plans offered through an employer can provide critical disability benefits. However, there is another important fact about group coverage every employee should realize:
Most group disability plans have provisions that offset (reduce) LTD insurance benefits, if that employee has other sources of income.
The video above explains how an award of Social Security Disability Insurance can offset your LTD monthly benefit amount. As a rule, this stipulation affects long term disability benefits and only in rare situations affects short term benefits.
But SSDI is not the only source of income that can reduce your LTD award. What are those other sources of income?
Common Disability Payment Offsets for LTD Claims:
Your LTD insurance policy will tell you what other types of income count as an offset and what types do not. This information usually appears in the policy under a section entitled Other Income Benefits, Other Forms of Income, or Deductible Sources of Income, or similar.
- The most common offset is the Social Security disability offset for any disability benefits paid or payable under Social Security Disability Insurance (SSDI). Your group LTD insurance benefit will be offset dollar for dollar by the SSDI benefit amount.
- Under Workers Compensation, compensation for an occupational injury or sickness. Most often Worker’s Comp will offset the LTD benefits. It is feasible in certain cases to receive both LTD insurance and Worker’s Compensation. In some cases, both the Workers Compensation provider and the LTD insurance carrier will try taking the credit on the disability claim. An experienced disability lawyer can step in to ensure your rights are protected until a court determines which provider gets to take the offset credit.
- Specific state disability benefit laws may govern what offsets insurance companies may deduct;
- Retirement or Pension distributions you may be receiving while on claim;
- Third party recoveries from personal injury settlements or lawsuits;
- Other group insurance plans or individual insurance policies;
- Sick Pay / Salary Continuation by the employer;
- VA Disability Benefits: if your policy lists Veterans Compensation as other income, and your VA disability payments are for the same condition as the LTD benefits, the LTD carrier may have the right to offset the VA benefits.
Add to all of the above: SSDI benefits may be reduced by the award of worker’s compensation or state disability benefits.
For a free legal consultation, call 800-562-9830
Contact Us about Possible Disability Payment Offsets
With so much at stake, it is important to understand what your LTD policy considers as deductible sources of income, and the interplay of offsets. There are old policies which may not include all of these common offsets. Not all policies are drafted with the correct provisions to give the insurer the right to recover. Other defenses may be available in your specific case that may prevent your having to reimburse your insurance carrier.
Our attorneys represent disabled clients every day in all aspects of Social Security Disability law and disability insurance law. We are well acquainted with the Social Security disability process and the entire disability insurance industry.
If you would like to know what sources of income may produce disability payment offsets, or simply need clarity regarding the terms of your policy, please reach out to us today for a free consultation. Call us at 800-562-9830.
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