Oral Argument Highlights Challenges of Wanting to Get Back to Work in Some Form While Getting Paid Disability Benefits
ERISA long-term disability attorney Ben Glass is the host of the ERISA Long-Term Disability Podcast, published on Apple and other platorms. Each episode we bring you interesting cases from around the country where you get to hear some of the best lawyers in the country argue on behalf of claimants and insurance companies. Listening to oral arguments is a fun and interesting way to learn more about this area of the law.
Reliance Standard Did Not Want to Pay the Entire Benefit
This episode in involves a claim against Reliance Standard, who claiming an offset to the disability benefits it was paying to a claimant who is alleged was making money after having gone back to work.
Other Income – How Will it Affect the Long-Term Disability Payment?
When someone is receiving long-term disability benefits, the concept of “other income” becomes important. “Other income” refers to any money that a person earns or receives from other sources while they are on disability. This can include wages from a job if the person is able to work in a limited capacity, profits from a business they own, or payments from other insurance policies like worker’s compensation or Social Security Disability Insurance.
Insurance companies often adjust the amount of disability benefits based on this other income. The reason for this is to prevent someone from earning more money while on disability than they would have if they were working their regular job. This is known as an “offset” policy, where the insurance company reduces the disability benefits by the amount of other income the person receives. This helps balance the financial support provided by the insurance so that it supplements other income without fully replacing it.
The rules about what counts as other income and how it affects disability benefits can vary depending on the terms of the disability insurance policy. It’s important for individuals receiving disability benefits to understand these rules so they can manage their finances effectively and comply with the terms of their insurance policy.
The case is about whether Mr. Caccavo went back to work after an accident that left him with serious injuries. Mr. Caccavo told his insurance company, Reliance, that he might start working a little bit again, and his doctor and his boss at Cushman (where he worked) also said he could come back with some limits on what he could do. Because of this, the insurance company thought he was working again and decided to change his benefits.
However, there was confusion because Mr. Caccavo, his wife, and some of his coworkers said he actually never went back to work. They mentioned that the company had made mistakes in their records, saying he was working when he wasn’t. The insurance company asked Mr. Caccavo for more proof that he wasn’t working, like contracts and pay records, but he didn’t give them the documents. This made it hard for the insurance company to figure out the truth.
In the end, the court had to decide if the insurance company was reasonable to think he was working based on the information they had. They weren’t trying to figure out if he was actually working or not, just if the insurance company had enough reason to believe he was. This case shows how tricky it can be to figure out work status in insurance situations, especially when the information is mixed up.