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Not every ERISA long term disability claim involves, as the central question, whether or not the claimant is disabled. Many issues arise regarding determining the proper amount of the monthly benefit to be paid. Attorneys answering a caller’s questions may face issues involving whether or not an insurance company can offset (reduce) what it is paying in monthly benefits by “other income” such as: 

  • Social security benefits paid to the claimant’s spouse or dependent children 

  • Lump-sum settlement recovered for permanent disability claims in worker’s compensation plans 

  • Military disability benefits 

  • Lump sum settlement for auto accidents or other personal injury cases 

Oftentimes the answer lies in whether or not the “other income” benefits were being paid before the claimed date of disability for the long-term disability claim. This is almost never a black/white/simple analysis. One must always read the policy and make sure they have the correct benefit information from the insurance company. Never rely only on what the insurance company says! 

Recently we got asked to get involved in an interesting case in the Southern District of Ohio. The referral came from an Ohio attorney that had attended our $8,000 2-day ERISA benefits seminar. In this case the claimant was being paid long-term disability benefits, but he was entitled to benefits under a state disability retirement plan program. As is often the case, the disability insurance company said, “we can take care of this for you.” They do that through a third-party vendor. In this case, the third-party vendor did not get the paperwork in on time and the state disability claim was denied. 

That did not stop the insurance company from attempting to offset what it was paying the claimant by the amount he would have been eligible for if the insurance company’s vendor had not been negligent. 

You’d think no one would be stupid enough to take that position, but every day, we make money on the dumb decisions that insurance companies make. It keeps our work interesting, for sure! 

Ben Glass
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Ben Glass is a nationally recognized ERISA disability & life insurance attorney in Fairfax, VA.
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