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Can an insurance company reduce payment for long term disability payment because of how much you receive from Social Security.

Green Bay, WI |

When my wife started work she sign for short term/long term disability. She has been out of work now for several years and is receiving Social Security. Each year her insurance sends a statement request information on how much Social Security is and decreases payment each year. She started out getting almost $300 a week and now only get's get's $87. Her social security has not increase by the amount that the insurance has decrease. Plus they say if we don't provide the information, her benefits will be terminated. is this legal or should we be seeking legal help.

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Attorney answers 3


Typically, yes. This is called an offset and is commonplace in group policies. However, even if the benefit is being reduced, it usually is not reduced further when there is a cost of living (COLA) adjustment to the Social Security benefit.

Regardless, you should check the policy or group certificate to make sure they are entitled to take this offset. Also, check the insurer's math an make sure their calculations are correct. Sometimes they will use the wrong numbers to calculate the offset.


Most of the time there is language in the insurance policy which states the insurer will pay the difference between certain other benefits you receive and a certain benefit level amount, meaning that as your other benefits rise, the amount they pay decreases.

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First-responder counsel are correct. This is a common, perhaps universal, requirement of long-term disability contracts. The offset is based on the gross Social Security benefit, not the net after Medicare premium cost.

Best wishes for an outcome you can accept, and please remember to designate a best answer.

This answer is offered as a public service for general information only and may not be relied upon as legal advice.