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The United States Department of Education recently announced it would forgive the student debt of more than 300,000 disabled borrowers. Could this impact your long-term disability benefits?

The topic this pertains to is offsets (amounts that can be subtracted). Insurance carriers are allowed to take offsets from their claimants’ benefits. The “Other Income” provision of your group’s long-term disability policy sets forth the types of “income” a claimant might receive that the carrier would be allowed to offset – subtract – from the benefit it pays.

Typically, group Long Term Disability (“LTD”) policies list things like: Social Security Disability Income benefits, Dependent Social Security Disability Income benefits, Workers’ Compensation benefits, certain pension benefits, and income from third-party settlements, among others. The claimant must notify the carrier when he or she receives these benefits and the carrier will then calculate the amount it gets to offset, as well as whether it believes it has “overpaid” the claim.

For example:

  • If your date of disability was January 1, 2018, and the LTD carrier starts paying you benefits on July 1, 2018, and you then are awarded SSDI benefits dating back to January 1, 2018, the carrier will determine whether your claim has been overpaid since it could have been offsetting that SSDI benefits from the date the carrier started paying you.
  • You are then responsible for repaying the overpayment to the carrier. This area of LTD benefits can be complicated. If you think you might have income that your LTD carrier is entitled to offset, it is a good idea to speak to an experienced ERISA attorney.

If you have been told by your LTD carrier that there is an overpayment on your claim, or if you think you might have income that qualifies as an offset, we strongly recommend you seek legal advice from an attorney knowledgeable in ERISA-governed Long Term Disability policies before proceeding with your response. Please call Kantor & Kantor for a free consultation or use our online contact form.