For people applying for disability insurance benefits, there is no easy answer to this question. As a general rule, employer-disability insurance benefits (those governed by the Employee Retirement Income Security Act of 1974, or Federal “ERISA” statute) usually provide for what are called “Other Income Offsets”. This means most such long-term disability insurance policies give the insurance company credit for any income the insured receives from some other source for being disabled from the same condition, for retiring, and so forth. The most common source of other income offset is the Federal Social Security Disability program.
Say, for example, that you have a long-term disability insurance policy through work which provides 60% of your prior Basic Monthly Earnings of Four Thousand Dollars.
($4,000.00) per month, or Two Thousand Four Hundred Dollars ($2,400.00) per month.
Social Security might pay around One Thousand Two Hundred Fifty Dollars ($1,250.00) per month assuming you have no dependents entitled to receive social security disability benefits on your account (many long-term disability insurance policies give the insurer credit for both primary & dependent SSD benefits).
The insurer’s net monthly LTD benefit after SSD offset is $2,400.00 – $1,250 or $1,150.00.
The policy may be very explicit about the insurer’s right to recover same, and right to estimate any amounts the insurer expects the insured could recover by applying, which is where this gets very serious. If your disability insurance policy says the insurer can estimate a potential source of other income offset against you, that means the insurer can send you $1,150 month even if you haven’t been awarded SSD benefits — or even applied.
Whether a reviewing court will ultimately agree with the insurer’s interpretation of the policy is an open question, but one subject to the usual rules of ERISA litigation which can make ERISA litigation challenging for the plaintiff (you). So while you don’t actually have to apply for SSD under such a policy, the policy is designed to make it difficult not to — which raises another question.
Why would or wouldn’t an ERISA plaintiff want to file for SSD? There are several good reasons to file for SSD early in your case if you are going to be disabled for a long period.
In the first place, the legal rules governing SSD are generally more favorable for the claimant than the legal rules governing ERISA litigation. An example is what are called age grids. SSD becomes easier to get at age 50, easier again at age 55, and easier again at age 60. Disability insurance policies generally do not have such favorable rules.
Another example is a rule called the treating physician rule. In SSD litigation, treating physicians are weighed more heavily than non-treating physicians. This rule does not apply to ERISA litigation of disability insurance policies. Many people who become disabled lose their health insurance in the process. Those who obtain SSD become eligible for Medicare A & B after 30 months from their last day worked, replacing the lost health insurance coverage.
These are some reasons to consider applying for SSD when applying for LTD. For more particularized advice, contact an ERISA attorney who practices disability insurance litigation in your state, a Social Security Disability Attorney who practices in your state, or both. Coffman Law practices Disability Insurance Litigation throughout the State of Florida. Call (866) 507-7030 today for a free strategy session.
Attending Physician Statements
ERISA Disability Insurance Applications generally come in three parts: Employee Statements, Employer Statements, and Attending Physician Statements. The Employee (you) completes the Employee Statement. Your employer completes the Employer Statement. Your treating physician completes the Attending Physician Statement. But there is a simple, non-obvious way to improve your disability insurance claim.
Before having your doctor complete the Attending Physician Statement, make copies of the blank attending physician statement, and have as many of your doctors as will complete the Attending Physician Statement complete one for you. As a general rule, more doctors certifying your inability to work will create a stronger claim.