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Can a disability company sue me to recover an SSDI overpayment?

This case shows how a long-term disability insurance company can claim an overpayment once a claimant is approved for social security disability income benefits.

The following is a real life example of a claimant with a Unum disability policy who decided he did not want to pay back his SSDI overpayment.

Daniel N., while employed by ICI Americas Inc., participated in his company’s long-term disability (“LTD”) plan governed by ERISA. Unum Life insurance Company of America is the claims administrator and named fiduciary of this plan.

Like most group long-term disability policies, Daniel’s policy with Unum contained a provision allowing Unum to recover any overpayments due to… [Claimant's] receipt of deductible sourcesof income.” The policy further defines deductible sources of income to include any Social Security disability income (“SSDI”) benefits and provides that Unum will subtract any SSDI benefits from the “gross disability payment.”

Daniel signs Reimbursement Agreement to repay Unum any overpayments

Daniel’s claim for LTD benefits was approved on May 16, 2005, effective May 1. Upon approval, Daniel received a letter from Unum informing him that any SSDI benefits would be subtracted from his monthly LTD benefits. On July 15, 2005, Daniel signed the Reimbursement Agreement stating his intention to accept the full amount of LTD benefits and later repay any overpayments. By selecting that option, Daniel agreed to “reimburse [Unum] any such overpayment within thirty (30) days of his receipt of such funds.”

In March 2009, Unum received notice that Daniel was approved for SSDI benefits, retroactive to October 2005. Unum then determined that Daniel’s receipt of SSDI benefits resulted in an overpayment of LTD in the amount of $77,900 and after advising Daniel of this overpayment and pursuant to the Reimbursement Agreement, Unum began holding a portion of his monthly LTD benefit to recoup the overpayment.

Unum sues to recover overpayment

When Daniel reached the maximum benefits period under the policy, Unum could no longer deduct monthly benefits to recover the overpayment, the balance of which was then $65, 848.40, and Unum sued Daniel in the Georgia Federal Court to recover the amount in addition to attorney fees and the costs of litigation. The court entered a judgment in favor of Unum requiring Daniel to pay the nearly $66,000 plus the costs of the litigation.

There are 92 opinions so far. Add your comment now.

Ann J.:

Can MetLife drop me if SSDI denies my claim?

Attorney Greg Dell:

Ann,

MetLife can drop you for any reason. If your MetLife definition of disability is similar to the SSDI definition of disability, then MetLife will likely make a decision consistent with SSDI. If you have an own occupation definition of disability, then an SSDI denial is not as critical. You should appeal an SSDI denial.

Lee:

Hi, I’ve been awarded SSDI and I understand I have to reimburse my LTD company the over-payment. However, my bills were extremely backed up and so I want to make payment arrangements with the LTD company. My arrangements will take me a little under 5 years to pay back $18,000. Is it realistic for the company to maybe consider an arrangement? I’m not refusing to pay them back, I just need some time. Thank you for your help.

Attorney Greg Dell:

Lee,

Five years sounds like a long repayment plan, but there is no harm in you asking for it. The carrier is not obligated to offer you a repayment plan.

Ann:

How can I find out if I have “an own occupation definition of disability?” I have been on LTD since Sept. of ’09. I went for the ALJ Hearing and felt confident they will approve my claim, but never really feel confident of anything. I am covered by my MetLife LTD ’till I’m 65. So far, my doctors have satisfied their inquiries, but if SSDI denies my claim, I was wondering if that would affect my coverage by MetLife? Thank you for your help!

Attorney Greg Dell:

Ann,

You need to read the definition of disability in your disability policy in order to determine which definition of disability you have. Your definition of disability may change after the first 12 to 24 months. If SSDI denies you claim, then MetLife will likely use the SSDI information to challenge your claim. Your definition of disability may be different than the SSDI any gainful occupation definition of disability.

Paul:

I’m having the opposite problem. I was on LTD then they stopped paying because the testing I was having took 3 months to complete. SSDI has ruled in my favor, however I want and need my LTD benifits. I have appealed their decision with several Doctors stating I cannot return to work. They have had the information for 3 weeks and have not called me back. How long can an appeal take in Michigan (CIGNA is the LTD company)? Do you see CIGNA not reinstating my LTD?

Attorney Greg Dell:

Paul,

Pursuant to ERISA regulation, the disability carrier has 45 days to make a decision and then they can request two 30 days extensions if they have a reasonable basis for the extension. We have no information about your claim so we cannot provide any opinion about whether your appeal with be successful. If you do not win your appeal, please contact us immediately and we will let you know if we can assist you.

Mike:

I’ve been treated for chronic pain and chronic fatigue. I have been off work three different times and denied benefits. The pain started in my feet 8 years ago and worked its way up my legs. I am under the care of pain management and have been for 3 years. I have history to support pain treatment, I just can’t find the cause. Doctors can not find cause, only diagnose me with chronic pain and fatigue. They believe it’s neurological, but no test confirms. They don’t want me to work. Been denied STD and LTD. I am in so much pain and weak. I can’t work.

Is there anything I can do?

Attorney Greg Dell:

Mike,

If your STD and LTD benefits have been denied, then you need to file a timely appeal. If you have already filed all of the required appeals, then you have the right to file a lawsuit. If you contact us, then we can determine if we would be able to assist you.

CJ:

What if I am paying extra premiums for the LTD; I still have to pay them back for SSDI, can I deduct the premiums paid to the company? They provide basic coverage at the employer’s expense which is tax deductible. The portion I receive is not.

Attorney Greg Dell:

CJ,

If the policy has SSDI repayment language then you still need to repay regardless of who paid the premiums. You cannot deduct the premiums you paid, but if you did not deduct the premiums you paid, then the portion of the benefit you paid for may be tax free. Please read Are Disability Insurance Benefits Taxable?

Concern:

MetLife is the worst insurance company in the world. I received 6 months STD, then was approved for 6 months LTD. They then denied me. I had no income for over a year, became homeless and they didn’t take any of my medical issues seriously. They convinced me to allow Allsup to represent me. Allsup also suck. Once I was awarded benefits I agreed on record to pay Allsup 20 percent. Now they are telling me they also need to collect MetLife overpayment as well.

Question: can Allsup sue me on MetLife’s behalf?

Clark:

Allsup sent us a letter no longer representing him on Prudential behalf. We signed the letter with Allsup for repayment in the event of overpayment. Since they fired us as a client, then the contract we signed is non and void. Reading the contract, its says its only good for 24 months. Its has been longer than 24 months since it was signed.

My husband was awarded his SSDI for heart failure due to an MI in 2009. We hired our own attorney for $6000. We have been sent a letter for demand for overpayment that is not accurate. We have sent this information to Prudential without any word back.

Can they collect the overpayment? What about the tax liability?

Attorney Greg Dell:

Clark,

It is likely they can collect the overpayment, but you are entitled to a credit for the $6,000 attorney fee you paid.

Kelly:

Why on earth would Social Security give you a check only for it to go away? My lawer was through Advocator Group and I understood I would pay him thats not the problem. I would NEVER have gone through Liberty Life if I knew I would be handing over my winnings which I thought would helpe me with my medical. They said I owe them 12 grand. My check was less than that and 3 grand goes to my lawyer… what on earth can I do and I refuse to pay Liberty Life? Please help, I need some guidance. I feel punished for being disabled and this has been a horrific experience and wouldn’t wish this on my worst enemy!

Attorney Greg Dell:

Kelly,

Unfortunately, your policy may have a provision that allows Liberty to recover any payments your received from SSDI for either you or your children as a result of your disability. Essentially, the Liberty Policy may be worthless once your start to receive SSDI.

Diana:

I was diagnosed with Microscopic Polyangitis (rare form of vasculitis) in November 2011. I applied in April 2012 and was just recently approved for SSDI benefits in July 2012. Social Security backdated my payments to November of 2011 and I received a backpay amount for around $6400. I will be receiving a monthly payment, as well as payment for my two dependent children (they are not disabled, but receiving a supplemental payment because they are my children, is all).

I just applied for the individual LTD policy on 07/24/2012. Is there a way that MetLife could sue me for SSDI overpayments if I get approved for LTD? Can they offset my SSDI payments?

MetLife talks about 60-90 day “elimination periods” – is that the same as Social Security? Meaning if they approve me for LTD, are they able to backdate 60-90 days and pay me a lump sum? Or, is that a 60-90 day waiting period from the date of the application and then benefits start?

Also, the application mentioned “pre existing conditions exclusions”… can you provide a general explanation of what that means? I am applying for the policy after I have already been diagnosed and was truthful in disclosing all information regarding my illness. They talk about a “6-24 month waiting period” before benefits can start for certain pre-existing conditions.

Any general information would be really helpful. Thanks so much! :-)

Attorney Greg Dell:

Diana,

MetLife can reduce what they owe each month by the amount you receive from SSDI for you and your children. They will not sue you as you not have been paid by them as of yet. The pre-existing condition is an issue if you have had your LTD policy for less than one year. If it has been more than 12 months since your first had your disability policy and then apply for benefits with a date of disability after the initial 12 months, then you should be eligible. Feel free to contact us to discuss the application process.

Beth:

I got hurt at work (rear-ended) and was covered by worker’s compensation for 7 months. I informed MetLife, after elimination period I received 3 months of disability payment. Will I be charged of overpayment in this case? I’m still not able to work at this time on 10# restriction by my orthopeadic doctor but IME released me to full work without restriction. On the other hand, MetLife stopped my payment and scheduled me for field interview. I’m on 8th month off work, unemployed, no WC or disability income. Can you please tell me my options.

Attorney Greg Dell:

Beth,

In some policies, worker compensation payments are considered an offset. You need to read the deductible source of income section of your policy to find the answer.

Steven:

Hello, I’m now 38 years old, hurt my back off and on the job. I didn’t go workers comp due to my back had been hurting bad before I went to work! Had an MRI after being laid up in bed for a few weeks. On August 3rd 2010 I had a tlif on l4-s1, with rods, 6 screws, kevlar disc, and laminectomies. Unum had my STD that became LTD in the end of October 2010, LTD ended on October 2012, filed for plan B ’till I’m 65 years old. Got approved other decision from SSDI at Mon. Oct. 19th 2012 at my hearing – before hearing happened -. Waiting on paperwork to get through payment center! Unum called about plan until age 65. They said don’t spend the backpay, it’s their! Talking about my condition and what vocational training do I want! I told the guy slurring my words from being woke up on my pain meds I can’t go back to school I can’t concentrate from pain and sitting, lifting, standing problems! If I give them this backpay coming the guy said they wouldn’t make a decision on plan B ’till they get my SSD file and the backpay! Can I get a buyout that would include the backpay due to their itching to drop me so they won’t have to pay around $600.00 / mo. For 27 years if I pay the backpay I’m screwed and have no leverage with them!

Attorney Greg Dell:

Steven,

A Unum buyout may certainly be an option, but it depends on your policy language and your medical condition. This is a matter that you should call us to discuss.

Jeff F.:

My wife was just approved for SSDI and we got a check for back payments of about $12,000 with $1230 monthly benefits to start soon. During the time she was fighting for social security, she was receiving LTD through Reliance Standard ($1600/month).

Two questions:

1. Will Reliance Standard just reduce/offset their monthly benefit by the amount of SSDI so my wife still gets about $1600?

2. We know we owe overpayment, but can Reliance Standard ask for more than the amount of my wife’s lump payment ($12,000)?

Thanks.

Attorney Greg Dell:

Jeff,

Reliance will reduce her benefit every month moving forward by the amount of the SSDI for her and any dependent children. Reliance cannot ask for anything more than SSDI has paid.

Bonnie Roman:

Hi, I’ve been awarded SSDI and I understand I have to reimburse my LTD company the over-payment. However, my bills were extremely backed up and so I want to make payment arrangements with the LTD company. What if i want to keep some of the money to get my bills in order. What is the worst that can happen to me. I don’t mind having them take all my benifits. I do want to pay them back. I just need a little time, they will only give me 12 months to pay back. Help

Attorney Greg Dell:

Bonnie,

The worse case scenario is that they could file a lawsuit against you seeking payment of the funds.

Regina Moore:

I want to say thank you for giving good advice to us all. If Reliance Standard won’t accept a buyout or payment plan for hardship, what are the odds that a judge will rule in your favour towards these instances? I wanna give them some $ when I get the backpay, but would like to workout something with them to pay the rest back over term, or see if they will settle for large portion of it. What do you advise?

Attorney Greg Dell:

Regina,

Reliance Standard should be willing to work with you on a payment plan. If you get sued, a Judge may or may not make you give back the money. It is a complicated question, because in some jurisdictions courts have not allowed disability insurance plans governed by ERISA to recover SSDI overpayment funds, unless the disability carrier can specifically identify the funds they are going after. This is a minority view. If you are being paid LTD benefits, then the disability company will likely continue to offset your benefits. They may also engage in a lump sum buyout of your entire policy, which would include the overpayment. We regularly handle lump sum buyouts on disability policies, but only a few companies will offer them. Reliance Standard will occasionally offer a buyout.

Valerie:

Hello, my name is Valerie and I appreciate your time. I just received approval from SSDI $2085. Long term disability Hartford/company plan, stated that I am to turn over SSDI retroactive pay to them. LTD initially paid $3010 for 2 years then payment $2008 current. No one has explained how much I should pay. Should I seek legal advice?

Attorney Greg Dell:

Valerie,

You need to ask Hartford for a written explanation calculating how much you need to pay them for any overpayment. If you disagree, then you may need legal advice. At this point you do not need an attorney.

Christina:

I was recently approved through Hartford LTD after over a month of giving me the runaround. After 2 years my policy changes from own occupation to any occupation. I plan to file for SSDI very soon. If/when I’m approved for SSDI I would rather not continue dealing with Hartford rather than give them my back pay from SS. If I don’t give them backpay can I request a buyout of my Hartford claim?

My policy states that I’m paid until 65 (I’m now 36 years old) as long I remain disabled. Can they determine I can work while SS is still paying me (so obviously they feel I cannot work)? How likely is it that they would agree to a buyout? If they refuse a buyout can I refuse to send them backpay and just let them cut me off instead?

My daughter receives SS survivor’s benefits because of her father’s death (he & I never married) and I’m wondering what impact that may have, if any. I need that backpay to secure housing for child and me and I won’t send it to Hartford.

I’m so scared of what I should do and would be so grateful for any advice you can give before I apply for SSDI.

Attorney Greg Dell:

Christina,

Your daughter’s SSDI benefits cannot be touched by Hartford and will not offset your monthly benefit since she will not get disability benefits as a result of your disability. You may be able to get a buyout from Hartford, but you would not be a candidate until you reach the any occupation stage. Even if you are approved for SSDI, the Hartford can still deny your disability insurance claim. If you do get an overpayment from SSDI, then Hartford can sue you to recover the money. If you are living on the Hartford payments now, then you will receive the same amount each month once you are approved, except some of the money will come from Hartford and some will come from SSDI each month. If you decide to keep the SSDI back payment, then you are keeping money which technically belongs to Hartford. You can always try to work a payment plan with Hartford, but since you plan to be on SSDI, which means you cannot work at all, it would not make sense to sever your relationship with Hartford as you may get paid until age 65.

Anxious:

Can a LTD lower my monthly benefit by the amount of the CPI increase by SSDI every year or not? There is no CPI provision in my policy and SSDI is an offset.

Michelle:

Hi Greg. I’m in the process of applying for both supplemental LTD (with The Standard Co.) and SSDI. Both are at the medical review stage. If I begin to receive SSDI first and receive backpay will I have to worry about The Standard recouping money from me? This is all so frustrating and confusing. Thank you for your time.

Attorney Greg Dell:

Anxious,

The answer to your question about the CPI increase by SSDI depends on how the offset is defined in your disability policy. I have seen offsets with and without the CPI increase from SSDI.

Attorney Greg Dell:

Michelle,

If you receive SSDI first, which is unlikely, then you will not need to worry about a backpay situation as long as you notify The Standard as soon as you receive the SSDI funds.

Regina Scott:

My husband had a massive heart attack (widow maker 99%) in 2/12 and has a laundry list of health problems as a result. His LTD kicked in 8/12 through Prudential Ins. Co. They hired Allsup to take over his SSD case, which he initially filed on his own. He was approved from the date he had the heart attack and just received his backpay award from 8/12-4/13. Allsup is wanting him to give them the backpay in its entirety along with an additional $1,000. Since SS pays behind (my husband will receive May benefits around the 20th of June), and Prudential has been paying the latter part of the month for that particular month (deposit on 5/28/13 for May’s benefits), they claim that we still owe the difference. How? This was an employee benefit. He’s only getting 60% of his 40 hour a week pay when he used to work 60+ hours a week. We can’t take another financial hit and are barely making it now. In addition, they’ve only approved his LTD for 24 months and sent a letter stating that they feel as though he could return to work and earn that amount, so will the LTD benefits may end in 8/14 depending on their medical panel’s review. What does their medical panel have to do with making these decisions? His doctors say no work at all. He has massive heart damage, 50% use of his lungs, short term memory loss, sleep apnea, 50% use of kidneys, gout, depression, anxiety, etc. He’s on a ton of meds and needs a nap after simply walking the dog. There isn’t a job that he would be able to do – even on a part time basis. There are days that he doesn’t leave the house because he has no energy and feels bad. We livein S.C. I don’t understand why he has to repay his SSD backpay when the LTD was an employee benefit. We have a ton of medical bills outstanding and now have to pay out the nose to keep COBRA insurance coverage – not to mention the cost of his meds. Do we need to talk to an attorney? If we give them the backpay and they turn around and cancel his LTD coverage, where is that going to leave us? As it stands, he gets $2,000/mo. in LTD, and will receive $1,400/mo. in SSD, so they will be required to pay him the difference of $600/mo. We have a 13 year old to raise. She’s currently getting SSD benefits under me. I was awarded last year. She would get about $40 more per month under her Father, but that would cut out the LTD difference completely. I want to do what’s right, but we’ve got to live too. There’s also a waiver of premium on a $78,000 life insurance policy. As long as his LTD is active, he will keep the insurance. If it cancels, he’ll lose it. I’m really confused at this point. Do we need to speak with an attorney? He worked in maintenance at a lumber bill. He was at work when he had the heart attack. He seized, and fell on a beam and industrial equipment. He has a massive knot on the back of his head, and his back was black and blue. Initially, when I met with HR at the mill, they said that any injuries he sustained as a result of the fall would be filed under workman’s comp. Then, they wanted Ken to sign a paper agreeing not to go after WC or they would not start his short term disability benefits which lasted 6 months. That’s not been mentioned again. The neurologist doesn’t really know if the blow to his head and/or a combination of the lack of oxygen has caused the short term memory loss. Ken actually died 3 different times and was not expected to survive. They call him a miracle and say that he beat every odd in the medical books. By their standards, he should not be here. He still forgets things – will leave the stove on, forgets what you tell him. Some days are worse than others. I know this is a lot of info at once, but I really don’t know what to do.

Attorney Greg Dell:

Regina,

First: Met is entitled to an overpayment from the SSDI amount, but you can hold the money and ask them to agree to a payment plan.

Second: If they have already stated they are going to deny his benefits, then you need to take immediate action and contact an attorney. We can review the correspondence from Met and let you know immediately if we can help you and what steps need to be taken. The SSDI funds should come to you directly and not Allsup or MetLife.

Marissa:

I’ve been claiming & receiving STD on & off work due to Systemic Lupus since my DX in 2007. In 2011 I was off work again & filed STD & was approved. Oct. 2011 I applied for SSDI but return to reduce hours Dec. 2011 still not 100% well I knew my illness was affecting my work. My employer were no longer accommodating my reduce hours. Dec. 2011 I became very ill & was off work again back on STD. I received an approval letter from SSDI Dec.2011 with no retroactive because they used Oct.2011 as my 1st date of disability. But there was a 5month waiting period o receive my 1st SSDI check. In the mean while I was receiving STD payments which then turned into LTD payments then I started receiving SSDI payments once my 5 month waiting period was up. So my LTD requested back pay from me base on my SSDI monthly payments & reduce my LTD payments. Plus requested all my STD payments I received to be returned back to them. Can they do this? I already paid back LTD & now they are garnishing all my future LTD payments to pay all the STD payments I received. I never received a retro pay from social security.

Attorney Greg Dell:

Marissa,

The disability company can only demand an overpayment for any period of time where the SSDI payments and the disability insurance payments overlap for the same dates.

Jayne Walko:

I broke my back in 1998. My spine is structurally damaged, with enough rods, cages and screws to make it look like a poorly constructed erector set. My former employer applied for SSDI and for a supplemental disability policy they carried through. The Hartford. Much to my dismay, I was approved by both. At the time, I thought I would recover. I was wrong. Fast forward to 2013. My spine has actually degenerated… The Hartford did surveillance on me in January, now 15 years into the disability. There was nothing inconsistent with my reported injury on the tape, but now they have set up an appointment for me to see one of their doctors. My doctor was appalled they did surveillance on me and told me my back was one of the worst he’s seen. I know my claim is legitimate and I know all my doctors will stand by me. However, I’m terrified that a big company like The Hartford will cut me off… I rely heavily on every penny I get, both from The Hartford and SSDI. So, in summary, is it possible for a supplemental disability company to cut off a policy holder… When they have beef on SSDI for 15 years?. (The policy was a perk from my employer, I have never actually seen the actual policy). Thank you for your help.

Attorney Stephen Jessup:

Jayne,

Unfortunately, it is possible for a private insurance company to terminate a claim for disability benefits despite the fact SSDI has approved the claim for 15 years. In doing so companies such as Hartford will rely on what they consider “new evidence” that the SSA does not have- in this case video surveillance the possible negative report from the IME doctor. With that information in hand it can lead Hartford denying the claim for benefits. That is not to say that they will not be proven wrong after filing an appeal, but it does rise to a level to justify, in their mind at least, in denying your claim. Please feel free to contact our office to discuss your claim should you have any questions.

Bryan Prather:

I was approved for SSDI. I was put out of work in 2010. Advantage 2000 said the judge offered to approve me from June 2012 when I turned 50 because it would be easier to get it. I asked for the offer in writing and Advantage said that they didn’t have anything in writing. I felt I got screwed out of at least a year. Could Advantage been lying to me just so they would not have to travel for a hearing or have to work harder? I said OK to it reluctantly. I collected 1187.00 from Cigna. SSDI approved me for 1447.00 approx. monthly. Advantage 2000 says I have to send the over payment to them and not Cigna. They wanted to debit my bank account and I said no way. I haven’t deposited the check. It says it is good for one year. I don’t plan on keeping the money but I’m not so sure I owe them the complete amount anyway. I don’t like Advantage 2000 and I think they work for Cigna more then they work for the client. I do not trust them. The consultant I talked to seem to be very displeased when I told her I did not deposit the check and was not allowing the to touch my bank account. I told her I did not want to communicate by phone anymore because it is too much to remember. She said it is their policy not to use email about my benefits. Now they just want my check. I told them I was going to talk to a local attorney, and that I was going to talk to Cigna. According to Advantage, I owe Cigna 500.00 more then what DSS gave me in a lump sum. She said Cigna would work with me on that and actually asked me if I could pay it now. Do I even have to talk to Advantage now that my claim has been approved. I feel I am being harassed to be quite frank.

Attorney Stephen Jessup:

Bryan,

I would recommend you speak to Cigna directly, as they are the entity that has a potential right to the recovery of the SSDI for any offset under the policy.

S. Dixon:

I read the 9th Circuit Court in 2012 added more provisions of what constitutes which funds UNUM can go after and that this protects a denied claimant from having his or her personal assets taken (SSDI/equitable claim).

In Daniel’s case his disability claim had run out of money, so he couldn’t pay back monthly. What if you have enough money for the duration of your contract and UNUM denies you after years on disability and then threatens to sue you for the remaining overpayment Seems contrary for UNUM to do so when they are being reimbursed, but they do anyway.

What if a Buy Out was feasible and they refused and went the court route instead? Would the courts still back UNUM’s claims?

Attorney Stephen Jessup:

S,

Every case and fact pattern is unique and as such it would be impossible to provide answers to your questions. If you are facing a similar situation, please feel free to contact our office to see how we may be able to assist you.

S. Dixon:

Second question: can UNUM bypass any legal proceeding and simply turn you over to a Collection Agency immediately after a denial for an Overpayment? If yes, can this be discharged in Bankruptcy Court?

Attorney Stephen Jessup:

S,

With respect to the ability to discharge the over-payment in Bankruptcy court, you would need to speak to an attorney that specializes in Bankruptcy. It has been our experience that insurance carriers do turn over claimants to collection agencies for collection of over-payments.

Betty P.:

Hi my name is Betty and my question is my LTD was paying me until April then when it was time for my review they denied me. I haven’t received anything else saying I was ready to go back to work but I had a hearing with social security and they gave me full disability and a vocational expert said I wasn’t able to return to work. LTD still cut me off, so that made all my bills get behind so now they are telling I need to give LTD all their money back. Do I have to pay all the money back at one time I am so far behind on all my bills what is the worst thing they can do since they are sending me the money can they take my check especially when I they send me the money to LTD? I need help quick.

Attorney Stephen Jessup:

Betty,

If the company has a right to the back benefits for a period of time that they paid you, then they are entitled to it. Normally the check from the SSA will come straight to you. Whether the insurance carrier will know about it is another thing (as your claim has been terminated). In the event that they do contact you demanding repayment you can attempt to work out a payment plan with them. As for “worst case scenario” I would refer you to the above article, indicating the insurance carrier could bring legal action against you.

Tony:

Hello,

A little background before I begin: I was receiving from Unum, prior to being awarded SSDI, about $2,400.00 per month. After I received my lump sum payment from SSDI, Unum stated that I need to repay the over-payment of approx. $32,000.00. Not fighting that, I agree with them. My SSDI + the SSDI dependent money = just about $2,150.00. Unum “issues” me a payment of $250.00 each month, I never see this money as they just keep it to pay back the over-payment I owe them. I am perfectly fine, no issues.

Now for my question. “Authorization” forms.

I received a disability update form from UNUM. I filled out the pages, the doctor filled out their portions. I did not sign the authorization form, instead I attached the following letter:

************************
“To whom it may concern;

Due to past, what previous Medical professionals deemed harassment, the following statement is being entered:

I am not authorizing Unum Group or its subsidiaries, Unum Life Insurance Company of America, Provident Life and Accident Insurance Company, The Paul Revere Life Insurance Company, or persons who evaluate claims for any of those companies (“Unum”), employee benefit plans sponsored by my employer / former employer or any person providing services to, or insurance benefits on behalf of, such plans, or to anyone who provides services, including the evaluation of claims, related to benefits offered by Unum, my employer or former employer, or the social Security Administration (“Authorized Recipients”).

I do however agree , this information is needed for the review of my claim, I will be more than willing to obtain information if it requested:

1.) In writing
2.) Allowed ample time for the records to become available
3.) All fees and postage be prepaid by the entity requesting such information, prior to the release
of such records to the requester, or subsidiaries listed above.

In order to receive information requested, the requester should send payment to:”
************************

Do you think I am asking too much of them (Unum). I just don’t want my new PCP to be harassed as the previous PCP was.

Your thoughts…

Attorney Stephen Jessup:

Tony,

I would only suggest that you avoid making the authorization so restrictive that Unum argues you are impeding their ability to investigate the claim, which could lead to a denial of benefits. Although it is clear that their actions seem like harassment, the review for entitlement to disability benefits is on a month to month basis, as such Unum is within its rights to request information from your doctor every month.

Jerald:

Hey, if I am getting 1800 from my LTD, Hartford, and I get SSDI for 1600, are you saying I have to pay back the 200 difference that my LTD was paying me for x of months so if my back pay from SSDI was 1600×12 months = 19200, and the 200 over-pay from Hartford is 2400, it will be like 19200-2400 = 16800 mine to keep? Thanks.

Attorney Stephen Jessup:

Jerald,

If SSDI is paying you $1600, Hartford will reduce your benefit of $1800, by that amount resulting in a net benefit of $200 a month that Hartford will pay you. You would owe Hartford the $19200 under your hypothetical.

R. Warren:

Most insurance companies include a provision in the policy that allow the insurance company to sue the disabled person to recover any LTD benefits that were overpaid, once the disabled person receives back-benefits from Social Security. However, if your client’s LTD policy is provided through work, and your client’s employer was not a church or government entity, then the insurance company’s claim is preempted by ERISA, and, under ERISA, they may not have any right to recover your client’s back benefits. The short answer is that, if the LTD benefits are provided through an ERISA plan, the insurance company may be able to offset benefits going forward, and may recover an overpayment out of the remaining benefits, but probably cannot sue to recover the overpayment and collect money back from the client.

LE: I think some of these comments are made by attorneys paid by insurance companies!

JD I Am:

Attorney Greg Dell:

Jeff,

Reliance will reduce her benefit every month moving forward by the amount of the SSDI for her and any dependent children. Reliance cannot ask for anything more than SSDI has paid.

This is NOT entirely true! Example, LiFi paid me $2250 LTD, for 20 months, and then I was approved for SSDI for $1710, so you would think I would receive $540 from LiFi til I am 65, but, NO, I am divorced with 2 children, who receive $855 in SSDI Aux, now figure the back pay, I received about $26,000, and had to repay everything LiFi paid me, (about $17000 more than SSDI paid me) because $1710 + $855 = $2565 which is more than the $2250 LiFi paid me! Which is also $855 per month more than SSDI paid me! So you see, sometimes you DO have to repay MORE than SSDI paid you! The SSDI Aux was paid to my ex-spouse, all the while I did in fact pay child support also!

Attorney Stephen Jessup:

Mr. Warren, thank you for your comment.

Please note that lawsuits have been filed by Insurance companies on ERISA based policies to recover overpayments – as is the case in the above – which I would suggest you read. Some of these are successful and some are not dependent on the facts.

Attorney Stephen Jessup:

JD I Am,

From a practical standpoint you are correct; however, from a legal standpoint under the terms and conditions of the policy, if dependent SSDI is an offset (which most of the time it is) they have a right to offset your benefit on account of it, even if the dependent does not reside with you.

Rose:

I receive my retroactive payment from SSDI. Unum was paying me 2420 a month they never explain to me about the overpayment. Well, I’m giving them back the over payment amount of 28,806. Now they want me to file for my daughter so that won’t have to give me the 843.00 a month cause I will be getting 1577 a month from SSDI. If I don’t pay them the back money from my daughter’s, which I have not file for her yet, can they Garnish my SSDI check? Once I get the 843.00 from SSDI for my daughter UNUM will only be giving me 242.00. Can’t they just keep that until I pay off the retroactive payment of 14,333 that’s what my daughter back pay will be?

Attorney Stephen Jessup:

Rose,

Unum cannot garnish your SSDI check, but they can most likely offset the disability benefit they pay you for failure to apply for a source of “other income benefits” – in this case the dependent SSDI. With respect to repayment of any overpayment, you would have to discuss with Unum if they would be amicable to your proposition to withhold the monthly benefit to repay any overpayment.

Tasha:

I was awarded SSDi benefits a week less then a week ago and was facing eviction. The courts gave us less 10 days to move on november 15th I did not know what I was going to do then I received the award. I received 3500 in which my lawyer took 924 and my account was over drawn 635 dollars. Left with 1941 I found a place fast but they wanted 2125 for me to move in and I had no choice we had no time to find anything else in such short notice. By this time I had 5 days left to move and I used the rest of the money and once again I had to bounced my account because after I took the 1941 I still did not have enough to keep our things off the street. So an additional 500 bounce was made to pay some one to move me and my autistic 6 year old son and the down payment for a home. I called sedwick in october and made the aware of the award letter of 924 starting in november that I would be receiving from SSD. My agent said ok made me aware that if I get a lump sum that I would have to pay it back he also said it will adjust and pay the difference from what they pay and what SSD pay. I told him I did not want to owe anymore then I had to. He said ok it all done starting in november it will be adjusted. All these event occurred and I was going to see if they would take the 188 to pay back the 3500 which would take around 20 months give or take. Now before I got the chance to call this all happened in the last two weeks and the stress is overwhelming I got another deposit for my full 1044 instead of the adjustment amount of 188 which has gotten eaten up by bounce fees yet again. I am so scared what will they do? Now I have spent the over payment plus an additional 1044 I was not supposed to get anyway. Please advise I am so scared.

Attorney Stephen Jessup:

Tasha,

You will ultimately be liable to the insurance company for any overpayment. Chances are they will work with you to reach some sort of arrangement on the repayment. I suggest you follow up with them as to that.

JDB:

My disability is terminal. After being told by my employer that I was not performing adequately due to my disability, I filed for and received three months of STD benefits from Company “A”. Knowing my disability was permanent, near the end of my STD benefit period I filed for LTD benefits with the same company. Upon exhaustion of STD benefits I was approved for LTD benefits which I started receiving immediately. The STD and LTD policies are separate and distinct, and handled by two different groups within the company.

Both STD and LTD policies contain language regarding overpayment for other income of which SSDI is defined as “other income”. The language states “If the insured is entitled and eligible for other benefits they must apply for them”, and of course that the company must be reimbursed for that overpayment.

One month after STD benefits had been terminated, and one month into the current LTD policy, I received a letter reminding me that I likely qualified for SSDI benefits and was obligated to apply for them. I did apply for SSDI at that time and was approved for SSDI benefits almost immediately including a one year retroactive payment which goes back further in time than when I started receiving the STD benefits.

The insurance company now claims overpayment for both the STD and LTD benefits I have received. I fully understand my obligation under the LTD policy however I do not understand why they are making claim for the STD benefits. I have clear documentation demonstrating I was not entitled or eligible for SSDI benefits during the STD policy period, that the STD policy was terminated on a specific date, and that I applied for SSDI benefits well after the STD policy had ceased. There is no specific retroactive clause in the STD policy that codifies recouping overpayment even after the policy has terminated.

Can the insurance company legitimately and legally seek overpayment for a policy that terminated before SSDI benefits were applied for?

Attorney Stephen Jessup:

JBD,

If the time period of the award of SSDI benefits is retroactive to a time that you were receiving STD benefits, then the company could have a right to reimbursement.

Ray:

Is there a statue of limitations on the LTD carriers ability to sue a person for over payments? It has been two and a half years since they asked, via a letter for overpayment pay back. I no longer receive SSDI (back to work), which I once did… so having not heard from LTD in over 2 years, I am wondering if they will file a lawsuit or their tome frame to file a claim has expired.

Attorney Stephen Jessup:

Ray,

Most policies are written to limit any legal action under the policy to 3 years from the date a claim of action arises.

Frank:

If an individual who is currently on a repayment plan to reimburse an insurance company dies before the total SSDI back pay is reimbursed, is their spouse legally responsible for paying the rest of the back pay owed?

Attorney Stephen Jessup:

Frank,

The responsibility for the repayment is solely that of the insured.

S.L.R.:

Appreciate your site.

History: STD then LTD 2007-2009. Then LTD denied “limited” 2010 received SSDI awarded. Sued MetLife LTD won case. MetLife advised they would with-hold SSDI award money and then reinstate my LTD. I reported SSDI based on 1099 received in 2010 paid taxes. In 2013 MetLife ordered to reinstate my LTD. Advised MetLife would provide “letter” of repayment in order to get a “tax credit”. IRS advised the letter is not an acceptable document and I can’t find a CPA/EA that knows how to amend my 2010 return because the repayment was in 2013 for 2010. In addition, in 2013 MetLife paid different checks at different times. I received my 2013 W2 only to be shocked at the amount. I have been unsuccessful in obtaining a written itemized explanation as to the amounts making up the W2 (my attorney has no clue either) I requested in writing of MetLife a breakdown so I could reconcile the W2 but MetLife refused only verbal which was off by $6K.

Question 1: In the case of a “repayment of the employee/claimant back to the Insurance company, what is an acceptable document suitable for income tax purposes the Insurance should provide to the employee/claimant?

Question 2: When an Insurance carrier has a District Court Order to re-instate the employee with back benefits, can the employee demand a written itemization in support of the W2 which included back benefits, current years wages, and “award” amount?

Question 3: In order to deduct the cost of attorney’s fees (1/3 of the award) what documentation does the attorney provide the client to satisfy the IRS requirement?

Thank you,
S.L.R.

Attorney Stephen Jessup:

S.L.R.,

Unfortunately, as we are not tax professionals, we cannot provide any type of advice as to taxes. Additionally, as you are already represented by counsel, I would suggest you request they follow up with MetLife as well as any legal questions you have regarding your claim.

SD:

My SSDI lump sum payment that I recieved was included in my bankruptcy, which has now been discharged & closed. the LTD carrier did not receive any money from it. In the meantime, my LTD carrier continues to offset my monthly payments from the SSDI lump sum payment. Can they continue to do this? Also, since my SSDI lump sum was forgiven, so I believe, my LTD carrier should reimburse me since the time they started the offset as well as beginning my monthly disbursement again. What are your thoughts? Thanks.

Attorney Stephen Jessup:

SD,

Did you advise your carrier of the Bankruptcy proceedings, and did you let your Bankruptcy attorney know that you had an obligation under the policy to return the re-pay the back benefit check for SSDI to the carrier?

V. McCully:

I was off work on disability for over a year with Unum insurance policy through my job. They made me apply for Social security benefits. I was approved and now have to pay them the back check of over $17,000. I am sending them all of that money as agreed. My question is that I have been released from my doctor and started working again and I called them to notify to stop my disability benefits. I got a call from them a few days later telling me I have to apply for family social security disability benefits now. I have not asked for family benefits from Social security. I am working and really don’t want to take the time nor have the time to apply. Can they make me apply for this now after the release?

Attorney Stephen Jessup:

V,

At this point I would think they would be hard pressed to force you to apply, and it would probably be doubtful that the SSA would approve a family benefit. Have they sent you anything in writing?

Bill:

Hello,

I don’t know if I need an attorney for my LTD or not, I have CIGNA Disability from my job. I had STD by CIGNA on and off since Aug, 2013. My CIGNA claims manager never communicates with me until my claim is canceled, then once I finally talk to her, she says it was canceled for lack of medical papers from my Dr., which I attempted multiple times a week for weeks to contact her to be sure she had all the papers she needed.

Now my LTD is in review (not yet approved), I have no insurance and had to cancel multiple Dr. appointments waiting for my LTD decision. I feel as if Cigna is stalling. I did receive papers from Allsup.

I am in pain unable to purchace my medications, or see the specialist my PCP recommends. When I talked to my LTD claims manager, he was surprised I didn’t have insurance coverage… LOL… man… What Do I Do!?

I can’t afford to see the recommended Dr.s.

Attorney Stephen Jessup:

Bill,

You indicate that your STD claim was terminated prior to the natural expiration of the benefit. Did you ever appeal/receive the remainder of your STD benefit? If not, there stands a likely chance that your claim for LTD benefits will be denied as well. LTD is usually predicated upon being disabled during the Elimination Period, which normally coincides with your period of STD. If you were not deemed for the entirety of the STD benefit, the LTD claims determination is often a denial for not being deemed disable during the Elimination Period.

Dave:

I received roughly $28,000.00 from SSDI back pay that was discharged in bankruptcy. Liberty mutual has offset my $200.00 LTD monthly payments for 2 years now. Since my back pay was discharged, Liberty continues to send me monthly offset receipts.

1. Is Liberty responsible to pay back the 2 years of offsets they have kept?

2. Can they still offset the payments even after discharge?

3.Shouldn’t they continue to pay monthly supplements?

Thank You.

Bill:

Stephen,

My STD was discontinued here and there, but in the end I did receive my STD in it’s entirety. There were just delays that had suspended my benefits and there for delayed me from getting proper medical treatment and prescriptions’ along the way.

My last contact with my STD claims manager, she stated my she extended my STD to it’s entirety to Feb 2, 2014, and was transitioning me into LTD. I now have a new claims manager for the LTD.

All the stalling delays along the way prevented my from seeing the specialist I needed to see do to periodic denial of benefits while my STD was reviewed again and again… each time I would be without benefits during their “review”, and then each time Cigna would eventually reinstate my STD and I would receive my back-pay, but that didn’t help me to see my doctors in between since I had no money or insurance at the review time periods.

Now of course my LTD in review and once again I have no insurance and unable to see my doctors ( they require payment up front since I have no insurance at this time, which I am unable to afford.

My claims manger stated that if my LTD is approved, I would again receive my back pay. That does not help me in the mean time because I have had to cancel appointments with specialist while I am waiting.

Attorney Stephen Jessup:

Dave,

Your obligation to repay Liberty any overpayment under the contract would potentially remain regardless of the Bankruptcy proceedings. I would discuss with your Bankruptcy attorney to see if Liberty waived any rights.

David:

I am receiving disability payments from Hartford, my wife is disabled and approved for benefits from social security. My wife applied for SSI and was told by social security that she is eligible for SSD under my record. Can hartford offset my benefits due to my wife receiving SSD for her disability under my record? Thank you.

Attorney Stephen Jessup:

David,

The policy language typically only allows them to offset your benefit based upon Dependent SSDI benefits that are attributable to your disability. As such, Hartford should not be able to reduce the SSDI money your wife receives on account of her own disability claim.

Rob:

I have an issue that is bothering so bad that I don’t want to pay Unum any overpayments whatsoever I received from SSDI. The day I received that overpayment form they sent me back in 2012 (the old form) I called Unum and talked with my LTD Representative who approved me for LTD. I don’t have any issues paying Unum back MY SSDI overpayment but I do any overpayment of my dependents. This is the reason why. Whenever I was talking with him (name withheld for now) I specifically asked him if Unum request any overpayment for SSDI payments for dependents. His specific statement was “No Unum does not request any SSDI dependent overpayment”. So, I signed the form and sent it back. Now that I was approved for SSDI, Unum wants the SSDI overpayment back.

Well what they do not realize is I had the LTD Representative on speaker phone and my wife is a witness to his statement. We were so specific we actually wrote down what we were told.

I am thinking of writing a letter to Unum of this fact and also going to tell them the date and time of the phone conversation because I know they like to record the conversations without telling the person, which is actually legal under Federal Law. Anyway, if that Rep told me one thing to deceive me then they must abide by what was told to me. Again, I only agreed to sign that form because I was told Unum doesn’t recoup overpayments of dependent SSDI payments.

Unum is very, very deceptive in their business ways.

Robie:

Hey CJ,

I hve a individual principal LTD policy. I don’t believe it has any SSDI overpayment language in it but am not sure. What type of words should I look for?

Also what if I’d like to get a buy out on that policy. What are your fee’s to make that happen? Is it a % and if so how much or a flat fee?

Thanks for your very interesting and informative blog.

Attorney Stephen Jessup:

Robie,

I am assuming you are on claim? Typically the language is found in a section that discusses what Other Income can offset your benefit. If this is a policy you purchased directly from an agent chances are there is no offset language. With respect to potential buyouts of your policy/claim- each case is fact and carrier specific. As such, please feel free to contact our office to discuss how we may be able to assist you.

SD.:

Sorry for the late response. Yes, the insurance co. was notified by the court & my attorney was aware that the insurance co. wanted the lump sum. Thanks.

Lily:

This problem is having me awake at 4am. I am already disabled but for 3 years I have been refusing to give them my child SSI. And my they are taking all my benefits to collected. My question is should I pay them my child SSI or at this point I need a lawyer? Also can they take me to jail for this? I forgot they want for me to sign a form giving them them to be able to get my information from my SSI. Thank you.

Attorney Stephen Jessup:

Lily,

If the carrier is entitled to recovery of the dependent SSDI then they will collect one way or another, be it by withholding your monthly benefit check or you repaying the amount. You cannot go to jail for failure to repay the money but the carrier can put you into collections or file a civil lawsuit to recover the amount.

Sharon W.:

Please help me. I am currently with Prudential LTD and they have told me I needed to file for SSDI and stated I needed to us Allsup. I filed with Allsup in June 2014 and I am about to have surgery again making the third surgery. I have collected from Prudential since May 2013. I have suddenly become uncomfortable about this whole process and thinking I should cancel with Allsup since they said I could at anytime. Since I started with Allsup do you think it is in my best interest to cut ties with them and if so how would I go about it so they do not touch my bank account. I do not believe that I will be awarded by SSDI but just in case I do not want to have to pay back money that should be mine since I had signed for a policy through work for LTD. I paid for this policy just in case something would stop me from working. Please advise as I am at my wit’s end and fear I have been set up for failure by Prudential and Allsup.

Attorney Stephen Jessup:

Sharon,

You do not have to use Allsup, and I would recommend you select a Social Security attorney of your choosing. Regardless of whether you believe you will be awarded Social Security or not your Prudential policy requires that you apply for SSDI benefits and if needed, appeal any denial of same. If you do not apply for SSDI the policy could give Prudential the right to offset your monthly disability benefit by an estimated amount you would receive from SSDI. Whether you choose to use Allsup or your own selected counsel, you will be responsible to repay any applicable overpayment to Prudential less any attorney fee awarded by the SSA. Please feel free to contact our office and we can assist you in finding a Social Security attorney in your area.

Tamara:

I did not sign UNUM’s benefit payment option form. Can they put a lien on my bank account for “overpayment” from my SSDI back pay?

Attorney Stephen Jessup:

Tamara,

They would be able to place a lien against you; withhold your benefit to apply it to your overpayment; or send you to collections.

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