Long Term Disability Claim and Getting the Best Outcome for the Client

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Here at The Law Offices of Terrence A. Low and Anthony J. Canata, we strive to reach the timeliest and best possible outcomes for our clients. This means being aware of the details that affect the cases we handle so that we can take the right steps at the appropriate time.

One of our practice areas is long term disability, where we provide assistance to Massachusetts and Connecticut residents claiming benefits under this kind of insurance plan. Most people who have long term disability coverage obtain it from their employers, who provide it to them as a benefit in the same way that they provide health insurance and pension plans.  The law that governs employee benefits, including long term disability benefit plans, is the Employee Retirement Income Security Act (ERISA), a federal law created for the protection of employee benefits.

What we want to highlight in this update is the relationship between these kinds of group disability insurance plans and social security disability, or SSDI.  Group disability plans invariably require anyone receiving benefits to apply for SSDI.  If a person who is receiving group disability benefits is awarded SSDI as well, the person is not allowed to “double-dip.”  Instead, his payments from the group disability plan are reduced by the amount paid by SSDI.  So a person who is receiving $5000 a month in group insurance disability who is awarded SSDI benefits of $2,000 a month would see his group insurance payment reduced to $3,000 and would continue to receive a total of $5000 per month.  Moreover, the plans often allow the insurers to estimate what the monthly SSDI benefit will be and begin deductions from the LTD benefit even before any award of SSDI benefits.

Take this claim for long term disability in Massachusetts for example:

In a recent case that we handled, the client was denied group long term disability coverage and we appealed that denial.  When we heard from the insurer about the appeal, the adjuster suggested that we negotiate a settlement of the claim.  Our client had applied for SSDI benefits but was still awaiting a decision.  When we received the settlement offer, we saw that the insurer assumed that our client would be awarded social security benefits, and accordingly presented a low offer, an offer that would only make sense if our client ultimately was awarded SSDI benefits.

On our advice, the client settled the group disability claim, betting that he would be awarded social security benefits. The gamble paid off: in that same week, we also prevailed in obtaining an award of social security benefits for the client. We could have played it safe by refusing the settlement offer and delaying the matter until social security made its decision.  But that would have delayed the global resolution for several months and could have resulted in a less favorable resolution for our client.

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