Do I Have To Pay Ssdi Money Back?

As a Greater New Orleans disability attorney, I take had quite a few people approach me with the following scenario:

I applied for and was granted long-term inability benefits nether my employee benefit plan. I likewise applied for Social Security Disability. While I was waiting for a Social Security Inability decision, the LTD insurance paid me my full benefit corporeality. After a yr or so of waiting, I was finally awarded SSDI. At some betoken, when the LTD insurer discovered I was receiving SSDI, I received a letter stating "We overpaid you past $____________ as a result of your receipt of Social Security Disability Benefits. Delight send usa a check in this amount." What exercise I do?

The Disability Commencement Take hold of

If you have long-term disability insurance through your work, and you have received long-term disability benefits under that policy, you demand to exist enlightened of the inability offset provisions.

Most probable, your disability policy contains language that allows the long-term disability insurance visitor to deduct (or first) whatever amounts y'all receive from other sources for your disability.  These other sources could be social security inability, worker's compensation, an injury settlement, disability retirement through an employer, or another long-term inability policy.  The precise offsets will be in your policy.

The language of the policy normally allows the inability insurer a dollar-for-dollar deduction of those benefits.

More than significantly, the provision usually allows the insurer to recapture any "overpayment" when you are given a lump sum retroactive honour.

For this reason, it is important to read your long-term disability policy and get a business firm grasp on the total amount of coin you will be receiving from all sources.

Benefit Reduction for Long Term Disability Income Offsets

In almost all long-term disability insurance policies received through employment, the insurance visitor is allowed to offset (or deduct) amounts you receive through other ways for your disability. This deduction is dependent on the specific language of the policy but is ordinarily a dollar-for-dollar deduction of other benefits such as social security disability, worker's bounty payments, other long-term disability benefits, disability retirement payments, and a litany of other payments you lot may receive.

For example, if your gross income is $ii,500 per month and your long-term disability provides for sixty% of your gross if you become disabled, your LTD payment should be $1,500. However, if yous receive social security disability (SSDI) benefits in the amount of $850 per calendar month, your long-term disability payment will exist reduced to $650 per calendar month($1,500 minus $850). You will not receive $2,350 ($i,500 plus $850).

In some instances, the amount you receive for these other benefits (including SSDI) will reduce your long-term disability monthly payment significantly and may event in you receiving only the minimum payable under the policy (usually somewhere between $25 and $200 per month).

What Is A Long-Term Disability "Overpayment?"

In many cases, the offsetting income is not immediately applicable and therefore non initially deducted from your monthly benefits.

Let's have an example with these facts:

• You receive $2,500 per month for long-term inability benefits.
• Yous have been receiving these benefits for a period of 24 months;
• Yous were recently awarded social security disability benefits paid in the amount of $1,000 per month;
• The SSDI award found yous disabled equally of 18 months prior to the determination;
• Y'all will receive a lump-sum payment from social security of approximately $xviii,000 ($i,000 per month times xviii months).

According to the terms of the long-term disability insurance policy, y'all will have been overpaid past the insurance company by $18,000.

How is this?  Because the policy calculates the amount payable as your maximum do good minus any offsets.

Long Term Disability Overpayment Recovery

In this case, even though you did not receive any deductible commencement until 24 months after receiving the long-term disability benefits, you volition still be required to reimburse the insurer for their overpayment. The catch is that if y'all did non receive the benefits you lot would non have to repay them, but since you did receive them you will have to repay them.

This is troubling news for Houma disability claimants.

The state of affairs is often non defenseless immediately past the insurer and the claimant does not normally report it, just you are contractually obligated to reimburse the insurer this money.

What happens is that when the insurer finds out, you either have to pay it back in one lump sum or your monthly benefits are reduced.

The choice is usually upwardly to the insurance visitor nether the terms of the policy.

Does long-term disability have to exist paid dorsum?

Usually, the amount that the LTD insurance company is seeking to recover is substantial—$ten,000 or more.

This is a difficult prospect for a inability claimant who is already struggling to survive on 60% or so of their earnings and dealing with medical expenses.

To brand matters worse, disability claimants oftentimes become this letter in conjunction with a reduction in their disability benefit payment to the minimum due under their policy OR after the inability insurer has adamant they no longer qualify for benefits.

And so what are your options for repayment of inability benefits?

If you lot remain eligible for the long-term disability insurance benefits, you can ask that the insurer utilize your currently due amounts to the overpayment.

While information technology is not ideal because y'all are losing out on much-needed funds, you lot may frequently have coincident benefits dependent upon you remaining on long-term inability insurance—such as medical, pension, or waiver of premium insurance.

If the long-term disability insurance company is demanding repayment either considering you are no longer on benefits or considering they claim y'all demand to repay to stay on benefit, you may be able to say "Go out Me Alone" and mean information technology.

Repayment of Long-Term Disability Benefits

In the case of Cooperative Benefit Administrators, Inc. v. Ogden, 367 F.3d 323 (5th Cir. 2004), the United States Courtroom of Appeal for the Fifth Excursion held that long-term disability insurers were not legally able to sue a claimant for recovery of an overpayment.

The courtroom looked at the text of ERISA, the federal police that governs employee benefit plans, and found that the law did not provide insurers with a right to sue claimants for money. The court besides institute that at that place was no federal common police right of recovery in such a case.

This case effectively shields claimants from suits by long-term disability insurance companies to recover overpayments, which are often tied to Social Security Inability awards.

Information technology is important to make articulate that this case only applies to decisions in the 5th Excursion: Texas, Louisiana, and Mississippi. The legal rules in your surface area may differ and allow such recovery from an ERISA plan.

This holding does not preclude the long-term disability insurance visitor from request yous for the money and taking information technology if yous give information technology to them.

If you receive a letter demanding that you lot repay a substantial portion of money to the long-term disability insurance company because of an overpayment, you should seek legal counsel before sending off your check.

If you would like to asking a consultation to discuss the specifics of your case, contact disability attorney Loyd Conservative at 985-240-9773.

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Source: https://www.ljblegal.com/library/options-for-returning-overpayment-for-long-term-disability.cfm

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