Offsets Explained

Before we get in to offsets, let’s talk about your disability benefits that you applied for.  You finally made it! You gathered all medical evidence and doctor support to show you are disabled and the insurance company agreed and has decided to pay. When the day finally arrives, you walk to your mailbox, and there it is. The envelope with the insurance company’s name on the outside, which holds your big check on the inside. Now, when you combine this check with your [social security, pension, worker’s compensation], you will actually be able to get ahead. However, when you open the envelope, the check is nowhere near what you expected. The reason is the “other income offset” built in to the insurance policy. Most employer-provided disability insurance policies give the insurance company credit for any income you receive from another source for being disabled or retired (Social Security Disability and Social Security Retirement being the most common, with Worker’s Compensation close behind). Not every source is an Other Income Offset. Many policies (although not all) exclude Veteran’s Benefits, for example. Don’t let this be a big surprise. Review your policy for the other income offset clause and expect that your benefits may be reduced if you have multiple sources of income.  Most policies can be obtained through your human resources department at the company you work for.