How Does SS Work With LTD Video
Mason Waring: Hello, my name is Mason Waring. I’m an attorney and partner at Chisholm Chisholm and Kilpatrick. I’m joined here today with my colleague CCK Attorney Leah Small. We devote much of our practice to handling long-term disability claims in appeals and court litigation for disabled workers. These are individuals who receive long-term disability insurance through their employer or purchased long-term disability policies directly from the insurance company.
Today, we’re going to talk about how long-term disability insurance works with Social Security Disability Insurance, also commonly referred to as SSDI. We’re going to talk about how LTD policies may have specific requirements for how their claimants should apply for SSDI. How SSDI payments can offset LTD payments? How SSDI can cause you to have to pay money back to the LTD insurance company? How SSDI can help or hurt your LTD claim and how your insurance company may offer outside vendors to help you with your SSDI claim?
Let’s get started. So first, we’re going to talk generally about how long-term disability works with SSDI. And both LTD and SSDI are insurances that cover a claimant who develops a disability which keeps them from being able to work. Leah, can you explain the differences between LTD and SSDI and how SSDI works with the LTD benefits?
Leah Small: So there are a few differences between LTD and SSDI. The first is the funding mechanism. So LTD is normally a group or private insurance policy. While SSDI, is from the government and it’s what you’ve paid into over the years as you’ve worked.
Another big difference between the two of them is the definitions of disability. For LTD benefits, you typically must first be unable to perform the duties of your occupation, which is the occupation you’re performing at the time you became disabled. And then after a period of time, normally 24 to 48 months, you must be unable to perform the duties of any occupation. For SSDI, you must be unable to engage in any substantial gainful activity and the disability must be expected to last at least 12 months or result in death.
There are also a lot of different rules that apply. So for LTD, your claim is going to be governed largely by the terms of your specific policy, but SSDI has a wide variety of rules that determine whether someone is entitled to benefits that take into account, your medical condition, your age, your education level your work history in addition to other things. Now, even though there are several differences between them, LTD insurance companies will often require you to apply for SSDI because if approved they can reduce the amount that they have to pay you each month. So for example, if you are receiving $1500 per month in long-term disability benefits, but are then approved for SSDI in the amount of $500 per month, your LTD insurance company is likely to start paying you $1000 per month because you’re now receiving the other 500 from Social Security. And we often refer to this as an offset, that your LTD insurance is going to offset your SSDI benefit from your LTD benefit.
Mason: And Leah you got to look at the terms of the policy closely because some policies have it, some don’t. Most group policies do. But even when they do, they can have different rules associated with it.
Leah: Right. So correct. Read your policy always. And another important reason to read your policy is because if your SSDI claim is denied at the initial level, many policies will require you to go through all available levels of appeal for that SSDI claim. And so it’s important to read your policy to understand how far you need to take your SSDI claim if it is denied initially.
If you don’t follow your LTD policy’s application requirement for Social Security, the insurance kind of may offset your future LTD benefits based on your estimated Social Security. That is what the insurance company estimates you would have received from Social Security disability if you had been approved.
One last thing to keep in mind is that your LTD insurance company will often request the documents and medical records that were part of your SSDI claim. So it’s important that you keep your SSDI claim and you’re LTD claim consistent with each other.
Mason: Let’s move now toward talking about overpayments. So Leah, say, you’re approved for SSDI, how can that affect your LTD benefit payment aside from the offset you just discussed?
Leah: So, if your SSDI claim is approved, oftentimes the claimant will receive past-due SSDI benefits. That’s benefits for a retroactive period prior to their approval. And if you receive past due SSDI benefits for a period during which you had also received LTD benefits your LTD insurance company may tell you that your LTD have been overpaid and therefore you owe money back to them. That’s because the insurance company paid you your full LTD benefit without an offset during a period of time when now, they’ve been approved for Social Security, they should have been offsetting your SSDI and thus paying you less.
So we often advise our clients that if they’re approved for SSDI and receive a retroactive lump sum payment, they should hold unto that money until they’ve confirmed with their LTD insurance company, whether there is no payment and if so how much it is.
Mason: What if a claimant was wrongly denied long-term disability benefits? So they file a claim for long-term disability benefits, that claim’s denied and they start down the appeal process. At the same time, they apply for Social Security, that’s approved. So they start getting Social Security benefits, but they’re not getting the long-term disability benefits. And they’re using the Social Security benefits to live off of. So, they’re not holding them aside. And then eventually they start receiving long-term disability benefits. What should they do if they’re not able to pay an overpayment back to an insurance company?
Leah: So, the most important thing is don’t ignore it, don’t close your eyes to it because that can often cause more problems down the road. Talk to the insurance company to see if they offer alternative payment methods, rather than just paying back the whole lump sum at once. You might be able to reduce your monthly long-term disability benefit until the overpayment is repaid. But it is again, read your policy carefully because some policies will explain exactly what options there are when there’s been an overpayment on a claim. And some policies allow the insurance company to reduce your monthly benefit to the minimum benefit until the overpayment is repaid, which is typically only $100 or 10% of your gross LTD benefit. And some policies even let the insurance company withhold your entire monthly benefit until that overpayment is repaid. So it’s really important to read your policy, but then reach out to the insurance company to see what options they might be able to offer you.
Mason: Right. These situations can vary greatly depending on the factors in your case. So this can be a really good thing to get advice from an attorney, to understand what your options are.
Great. So let’s move on to talk about how SSDI claims can impact the LTD benefits. We’ve discussed offsets and overpayments and how SSDI works with the LTD benefits, but how can your Social Security Disability Insurance application substantively impact your long-term disability claim?
Leah: Given the big differences that there are between LTD and SSDI, approval for one does not guarantee approval for the other. But your long-term disability claim can still be influenced by the records and decisions that were part of your SSDI claim. As we mentioned earlier, oftentimes your LTD insurance company will request the documents related to your SSDI claim. So make sure that your reports and claim forms for SSDI are consistent with those that you made for LTD. And if you’re approved for SSDI, that could strengthen your LTD claim. Especially if that SSDI definition of disability is more difficult to meet than your long-term disability definition of disability. On the flip side, if that SSDI claim is denied that could hurt your LTD claim because the insurance company may try to argue that you’re no longer entitled to LTD benefits if your SSDI claim is denied because Social Security Administration has now said that your medical conditions are not disabling.
However, even if the Social Security denial was correct so to speak, depending on the terms of your LTD policy, you can be denied SSDI, but still, be entitled to LTD benefits. So, if you’re concerned that your SSDI denial will negatively impact your LCD claim, you can consider contacting an attorney and try and talk through your concerns with them. They can review your policy and advise you on the potential impacts and how you can potentially try and prevent that SSDI denial from negatively impacting your LTD claim.
Mason: Thanks, Leah. Let’s move on to talk about the outside vendors that an insurance company may offer to help you make your SSDI claim. And so let’s assume you file an LTD claim and that’s approved, and that the policy requires the claimant to apply for Social Security. They might offer a vendor like Allsup, that they’ll engage to make your claim for you to the Social Security. Could you explain more about how that works, Leah?
Leah: So these vendors will help you fill out the initial forms for Social Security, gather, submit records, and all those things. But it’s important to keep in mind that these vendors will likely not be considering the full effects that an SSDI claim can have on your LTD claim because these vendors are contracted by the insurance companies, they may not be primarily or entirely motivated by the claimant’s interest. So if you’re offered assistance by one of these vendor companies, it can be a good idea to consult an attorney, to discuss your claim, and what impacts the use of the vendor might have before deciding to use them.
Mason: And so one illustrative example might be if you were disabled from chronic back pain, but you also have depression, it might be easier to make a social security claim based on the depression to meet the Social Security’s listing for depression. But the back pain could be really important to the LTD claim. And so you want to make sure that both the LTD claim and the SSDI claim are based on your full medical picture. All the evidence is submitted so that both are fully considered in the record, and that’s your responsibility to make sure it happens. And so you really should consult with an attorney before going down the road of working with one of these vendors or going yourself and just seeing what your options are. And see what factors might be at play with your claim.
You want to make sure that you’re getting the right representation and that the claims are being made the way it is best to provide an accurate picture, full medical picture of what’s happening with you.
And so Leah, I guess I just covered that. Answer the question, what should you do if the insurance company offers one of these? Consult with a lawyer. It’s a good idea to check in with an experienced long-term disability attorney to see if there’s things that you should be thinking about with your claim. And it’s one thing that we do for our clients is we really try to collect all the meds. And so if it’s depression and back pain, we’re going to gather the meds for both of them. We’re going to want to include them both and make sure that your full medical picture is considered. So getting that perspective, someone’s looking out for your interests and sole your interests can be of value with your claim.
So Leah, what are the key takeaways for our viewers?
Leah: So number one, it’s really important that you read your long-term disability policy so you’re aware of how SSDI will interact with your LTD claim. And it’s also important to be aware that your long-term disability benefits can be influenced by the outcome of your SSDI application. So, it’s important to make sure that you’re telling the full picture to both and that you’re being consistent with both claims. If you are approved for SSDI, you may owe an overpayment back to your LTD insurance company, and the insurance company will likely start offsetting your monthly LTD benefit by your monthly SSDI benefit.
As we just discussed the insurance company may offer you help with your SSDI claim from an outside vendor. So if that’s the case consulting with a long-term disability attorney is usually a good idea, just so you can talk through your claim and any issues that there might be so you can make the best choice for yourself and your claim.
The attorneys at CCK, have experience assisting individuals through their LTD claims that coincide with an SSDI claim. So if you’re struggling to obtain your LTD benefits because of SSDI, or for another reason, wherever you are in that process, it costs nothing to speak with us and see if we’re able to help you.
Mason: Right. You can reach us at, 401-331-6300, or online at www.cck-law.com. Leah thanks very much for this important information. And thank you all for joining us here today.
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