Social Security Disability Insurance and Long Term Disability: Offset ProvisionsPosted June 25, 2015 by Premier Disability Services, LLC® A significant amount of disabled workers have paid into a long-term disability (LTD) plan, either through a previous employer or through an independent insurance policy. This can be very beneficial to claimants filing for Social Security Disability benefits given the length of that process. During the period of time a Social Security Disability claim is pending, the long-term disability benefits are extremely valuable in keeping a claimant and their family afloat financially.
While LTD benefits can be very valuable to Social Security claimants, it is also important for them to keep in mind that LTD policies are contracts. They may impose obligations on the claimant in order for them to be deemed eligible to receive LTD benefits. For example, many LTD policies include a provision that requires the claimant to file for Social Security Disability benefits. In addition, many LTD policies include an offset provision where the insurance company is entitled to a reduction in the amount of benefit they must pay based on the amount of the claimant’s social security benefits. Most Social Security Disability claims can last up to a year or more. If awarded, the claimant may be entitled to a significant amount of back pay for the period of time they were awaiting benefits. Claimants will want to review their LTD policy to determine if their LTD carrier is entitled to any reimbursement from that back payment amount prior to using those funds for other reasons.
Finally, LTD companies may offer to provide a claimant with a representative for their Social Security Disability claim. While this is not always a bad thing, claimants should be aware that they are generally not required to hire this person. A claimant should hire an experienced Social Security representative they feel most comfortable working with for a prolonged period of time.
If you or someone you know is disabled and benefiting from an LTD policy, it is always a good idea to give the policy a close look to ensure that all obligations for eligibility are being met. If your policy requires that you file a claim for Social Security Disability benefits, it is wise to consider hiring an experienced representative to assist with your claim.
By: Thomas A. Klint of Premier Disability Services, LLC®