For those fortunate enough to have a Long Term Disability (LTD) plan and, thus a corresponding entitlement to a benefit payment through their employer in the event they become long term disabled from working, it will be necessary to look into a potential application for Social Security disability (SSD) benefits. Understanding the interplay between the two programs, how they are similar and yet differ, and how an attorney can serve you in both of these processes with the cost being taken care of by your insurance carrier, is quite important.
Group LTD insurance through one’s employment typically pays benefits for those who have remained out of work for what has been a period of 3 to 5 months, depending on one’s insurance policy. One of the first suggestions we make for those who contact us and are faced with initiating a group LTD claim is to obtain a copy of their insurance plan through their employer: in this way, one can read through the policy and determine not only the amount of the waiting period before such benefits are payable, but also such information as the amount of benefits that are payable, for how long such benefits are payable and the standard that is used for determining if one is deemed “disabled” as that term is defined under the policy. Ordinarily, the standard is whether one remains, as a result of a medically diagnosed condition, incapable of performing the “usual and customary duties of their ordinary occupation.” And so, with respect to the vast majority of group LTD policies, the standard for what constitutes entitlement to a “disability benefit” differs from that of the Social Security Act standard insofar as it only requires one to show that they remain incapable of returning, in essence, to their former employment. It is likewise important to review the LTD policy, as the vast majority of them have what’s called a “coordination of benefits” provision that calls for the amount of one’s benefits to be reduced by “other benefits,” which is ordinarily defined as including the receipt of SSD benefits (and in many cases, not just the benefits received by the claimant, but also any benefits that may be received on behalf of one’s minor children).
Given the insurance carrier’s right to reduce the amount that they will pay an individual under the terms of the policy, and this would apply to policies out of Maine, Massachusetts and New Hampshire, the vast majority of these policies will require the individual to apply for SSD benefits. It is important to understand that because SSD benefits are not payable for the first five full months one remains disabled, and one needs to show they are likely to remain so disabled for a year or longer, it is ordinarily not wise to file for such benefits too early. An application undertaken too early can and does frequently result in an unnecessary denial. This in turn will lead to a lengthy and burdensome appeals process. As one of the major reasons for applying for Social Security disability benefits is to ensure there is compliance with the terms of the policy, so that that the LTD carrier will be paid back under the coordination of benefits provision of the policy, it does not make a lot of sense to apply within 4-5 months of going out of work. With this in mind, we will typically intercede on behalf of our clients to convince the LTD carrier to be patient and to allow for an application for when it makes sense.
Likewise, because the retroactive SSD benefits ultimately received are going back to the LTD carrier given the coordination of benefits provision, it’s important to understand that the LTD carrier will reduce the amount that they are asking back by the amount withheld to pay the attorney’s fees (which is 25% of the past due benefits awarded). Thus, in this way, the LTD carrier is eating the cost of the attorney’s fees. and in essence, ordinarily, the claimant is receiving very little in the way of an additional monetary benefit by pursuing the SSD claim. Simply, the LTD carrier is getting reimbursed for what they have paid out, less the attorney’s fees incurred. And going forward, the LTD carrier is getting to reduce the amount they pay each month, by the amount received in SSD benefits.
There are, however, three very important benefits to receiving Social Security disability benefits in addition to the LTD benefits: 1) the LTD carrier is much less likely to fight the payment of their month disability benefit payment given it has been greatly reduced with the receipt of an ongoing SSD payment (moreover, because they see that the claimant has met the much stricter definition of disability under Social Security’s rules, they’re much less likely to try and argue that you don’t remain disabled from simply performing your past employment, which is an easier standard to meet), 2) should the LTD carrier attempt to deny a claim for disability benefits, one will have the backup income afforded by the monthly SSD check and 3) an approval for SSD benefits will ultimately carry with it the benefits of receiving entitlement to Medicare coverage after one has met the 24 month waiting period.
Given these considerations, and the fact that the LTD carrier will in essence be covering the costs associated with one’s attorney’s fees, it is always a good idea to hire one’s own attorney to assist them with the handling of the SSD claim. Likewise, with the LTD carrier seeing an attorney on board, they will be much more cautious before attempting to cut off one’s LTD benefits. Call the Law Offices of Russell J. Goldsmith at 1-800-773-8622 and to see how we an assist you further with your or a loved one’s disability claims.