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.
Please mark answers you appreciate with positive feedback!<p><a href="http://www.msm-law.com/nicholaspasse.html">Attorney Nicholas J. Passe</a><p><l>Disclaimer: Per the avvo.com community guidelines, no attorney/client relationship is created by the asking or answering of questions on this web site, nor do the answers constitute legal advice. Always hire an attorney before making any important legal decisions. Posting details of a case on avvo.com may be subject to discovery in criminal or civil litigation, so erring on the side of nondisclosure is wise.<p><a href="http://www.msm-law.com">Moen Sheehan Meyer, Ltd.</a>
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.