Today's correspondence states that there is a clause in my LTD disability agreement and the terms in the "Certificate of Insurance Booklet" will reduce my payment by the amount I "should" or "could" get from Social Security. The Hartford will immediately go after overpayment funds whether Social Security Disability approves me or not. I don't have the mental ability after 4 strokes, the latest in 12/13, whether this is accurate or not. What should I do with this? I thought that I had to apply for Social Security, and didn't realize that I could lose my payments if SSD denies me. I'm scared to death. The State of CA wants to take my license, I can't get work.... Yikes!
If the LTD carrier has approved you, and is currently paying you, this correspondence is likely just meant to encourage you to apply for Social Security, which you should be doing anyway. Yes, in most cases the LTD carrier will offset any amount you receive from Social Security, and will probably take most of your back pay if you are approved (calling it an "overpayment" of your LTD claim). It's not exactly fair, but it's usually legal.
If they're asking you to sign something, it may be a "reimbursement agreement." What these usually say is that while you're applying for Social Security and going through that process (which can take a while), the LTD carrier will continue paying you your full LTD amount, instead of "estimating" what your Social Security payment should be, and paying you less each month. In exchange for them doing that, you're agreeing that you will pay them back the "overpaid" LTD if you win Social Security.
You could speak to an ERISA attorney in your area about this to be sure, but I doubt it's necessary. Usually, people are better off signing these agreements. They don't really say anything more than what the insurance policy already says, so you're not really giving up anything, you're just getting a higher LTD benefit in the meantime, in exchange for giving up most of your Social Security back pay if you win.
If you get a Social Security denial, or worse yet an LTD denial, that's a different matter. Speak to an attorney immediately, and if you can find one in your area who does both, fantastic. If you can't find an ERISA attorney you like in your area, you can feel free to talk to one from anywhere, but I recommend people stick with a local for Social Security cases. Personally, I handle ERISA cases all over the place, but I don't like to leave my region on Social Security cases. It helps to know your local judges personally.
An attorney cannot answer your question directly without looking at the policy. However, LTD policies often have provisions allowing the insurer to offset "other benefits" such as social security disability. If you are not receiving social security benefits the insurer often requires you to 1) apply for social security benefits through the appeals process and 2) agree to reimburse the insurer any retroactive benefits you receive from social security. If you do not sign such an agreement they will often deduct the estimated amount you will receive from social security from your LTD benefits.
Your statement that the insurer will go after overpayment funds whether social security approves you or not makes no sense, since there would be no overpayment if you do not receive social security.
I am not sure if this answers your question but if you are confused you should show the documents to an attorney who can then advise you more specific advice relevant to your policy.
It is usually the case that your long term disability insurance company has a clause that involves disability. Generally you are required to apply for Social Security as a Long term disability . You should talk to an attorney that specializes with a law called ERISA. ERISA is a federal law governing these policies. I understand you have some anxiety. Over this but it sounds like you are disabled. Get a social security attorney that specializes in ERISA also and I think you will feel much better. Good luck.
The vast majority of ERISA goverened policies I have reviewed allow for the offset of your benefit by any amount you receive from Social Security, or what is deemed "Other Income" as defined in the policy. Some carriers will give you the choice of having your SSDI entitlement estimated and reduced from your monthly benefit, or as is most often the case, will pay you your full benefit and then seek repayment of any funds received as a result of SSDI (less any applicable attorney fee). Of more importance based on your concern is the fact you must realize that there is no such thing as a guaranteed long term disability benefit, and that Hartford can deny your claim at any point if it determines that based upon available information you no longer meet the definition of disability. My sole area of practice is representing people with individual or ERISA based group disability policies, and I have represented people suffering from Parkinson's and MS who have had their benefits denied. Please also note that receipt of SSDI benefits is not, in and of itself, a guarantee that the insurance carrier will continue to pay future benefits. From the information provided regarding your medical condition, it would seem you should have a strong claim for benefits, but if you are concerned about your benefit you should contact a lawyer who specializes in ERISA disability claims.
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