Is my "no-fault" auto insurance settlement an offset under my long-term disability policy?
If your policy is an employer provided group disability policy governed by ERISA, then any proceeds you receive from a settlement based on “No fault” auto insurance may very well be subject to repayment as “Other Income Benefits.” This situation came to light in a recent federal court case in Michigan against Life Insurance Company of America (LINA-more commonly known as Cigna) and serves as a warning to any claimant whose disability was due in part to an auto accident and who received any proceeds on account of same.
In the case of DeHart vs. Life Insurance Company of North America, DeHart brought an ERISA based lawsuit against LINA for what he argued was the wrongful termination of his disability benefits. In responding to the Complaint, LINA filed a counterclaim against DeHart to recover an overpayment for “Other Income Benefits” in the amount of $46,033.00 (the total amount of benefits paid) in light of a $1.5million dollar settlement DeHart reached as a result of auto accident case that resulted in his disability.
What are “Other Income Benefits?”
If you are covered under an ERISA governed disability policy, chances are you have seen language in the policy describing other sources of income that can be used to offset the amount your insurance company has to pay. The most common of these “Other Income Benefits” is Social Security Disability benefits. Other Income Benefit provisions also commonly encompass retirement benefits and proceeds from No Fault auto insurance, as was the situation in the DeHart case. The LINA policy at issue in DeHart specifically states with respect to Other Income Benefits that “any amount which the Employee receives (or is assumed to receive) under… any work loss provision in mandatory “No-Fault auto insurance” is an offset under the policy.
The Court Rules in Favor of LINA in Denying the Claim
Before the court addressed the issue of the overpayment, it first determined whether or not LINA had abused its discretion in denying DeHart’s disability benefit. Unfortunately for DeHart, the Court ultimately determined that LINA did not abuse its discretion when it denied DeHart’s benefit, effectively ending his fight for disability benefits. However, that was just the beginning of his problems.
The Court Determines That LINA Is Entitled to a Refund of All Benefits Paid
The Court then reviewed LINA’s counterclaim for repayment of all the benefits forwarded during the course of the claim. Adding what was surely insult to injury, the Court ruled in favor of LINA with respect to its counterclaim for a reimbursement of the $46,033.00 it had paid out in benefits. In doing so the Court noted that ERISA provided LINA the ability to commence a civil action “to obtain other appropriate equitable relief… to enforce any provisions of this subchapter (ERISA) or the terms of the plan.” Despite DeHart’s attorney’s arguments that LINA was entitled to proceeds from the settlement, the Court notes that LINA is not seeking a portion of DeHart’s settlement proceeds, but rather a return of the overpayment of benefits made under the applicable “Other Income Benefits” provision of the Policy. Based on the policy language and the applicable law, the Court determined that LINA was entitled to full repayment of all benefits paid. This was surely an artful use of semantics, but carried the same resultant effect of depriving DeHart of the $46,000.00.
Was Your Disability A Result of An Auto Accident?
If so, and you have a pending personal injury action against the parties responsible for the crash it is imperative to realize that any settlement or judgment may result in an overpayment being due to your disability insurance company. If you are concerned that these facts may apply to your claim for benefits, please feel free to contact Dell Disability Lawyers for a free consultation.
It should be noted that Dell Disability Lawyers did not represent Mr. DeHart, nor had any involvement in any stage of his claim for benefits.
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Answered Questions by Our Lawyers
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Q: I filed an appeal and lost. Is it worth pursuing?
A: Kim, in my opinion, yes. If you are still within your timeframe to file a lawsuit you have little to lose in t... Read More >
Q: Do I have a case for STD? I was denied twice because a) I hadn't been a fulltime employee for 6 months and b) I had ben on FMLA since Febury.
A: Frank, we would need to see a copy of the denial letter and the policy. Please feel free to contact our office... Read More >
Q: How can I appeal Cigna's decision if there are no written communications explanation the reasons for claim termination?
A: Tret, Cigna will be required by law to provide you with a written denial letter setting forth its reason for t... Read More >
Q: Is there a process for appeals not being responded to in the time given? Also, how do I access my records?
A: SB, ERISA provides 45 days to render a decision on appeal with the possibility of a 45 day extension- basicall... Read More >
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A: Mark, If you have no additional appeals your only option would be to find representation to file a federal law... Read More >
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A: Donna, I do not know if you would have any avenues to void the agreement you signed. Regardless of agreeing th... Read More >
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Get Your Disability Application Approved
Our goal is to get your application for disability insurance benefits approved. Applying for disability insurance benefits can be a difficult process and the information you provide is critical. Most disability insurance companies look at your application in hopes of finding a reason to deny your claim. Your disability company will ask you to complete numerous forms, interview you, request lots of information, speak with your doctors and possibly request to have you examined by their hired gun doctor.
Through our experience of having helped thousands of disability insurance claimants, our disability insurance lawyers will guide you through the entire application process and give you the best chance to get your disability claim approved the first time.
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If your disability insurance benefits have been wrongfully denied, then our disability insurance lawyers know exactly what it takes to get your disability claim approved. You only get once chance to submit an Appeal, therefore every piece of evidence that will support your disability claim must be included. The goal is to win your disability benefits at the Appeal level, but while preparing your Appeal you must consider how a federal judge will review your disability claim if your benefit denial is upheld.
Preparing a strong disability appeal package is an art that requires you to understand how the courts interpret your disability policy language, ERISA regulations / laws, and how to strategically present evidence in support of your definition of disability. We encourage you to contact any of our long-term disability attorneys for a free immediate review of your disability denial.
Sue Your Disability Company
98% of the disability insurance lawsuits filed by our law firm have resulted in either the payment of benefits or a lump-sum settlement agreement. Our disability insurance attorneys have filed ERISA governed and private policy long term disability insurance lawsuits against every major disability insurance company in state and federal courts nationwide and we love fighting for the little guy against the multi-billion dollar insurance company giants.
We have recovered hundreds of millions of dollars for our clients and we would like the opportunity to provide you with a free review of your disability benefit denial. There are many complex factors in a disability benefit lawsuit and the legal battle to win long term disability benefits can be fierce.
Prevent A Disability Benefit Denial
Approval of long-term disability is a continuous process as every disability insurance company will evaluate your eligibility for benefits on a monthly basis. You can never let your guard down and assume that your disability company will continue to pay your benefits for as long as you think you need them.
Our disability insurance law firm offers a reasonable flat fee monthly claim handling service in which we handle every aspect of your long-term disability claim and do whatever it takes to make sure you are paid every month.
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Let's discuss if a lump-sum settlement or buyout of your disability insurance claim is both available and makes financial sense for you. Our disability insurance lawyers have negotiated more than five-hundred million dollars in disability insurance buyouts and we know how to get you a maximum settlement. A disability insurance company is not required to offer a buyout and not every disability company offers them.
Questions About Hiring Us
Who are Dell Disability Lawyers?
We are disability insurance attorneys that know how to get your short or long term disability benefits paid. As a nationwide law firm we have helped thousands of disability insurance claimants throughout the United States to collect hundreds of millions of dollars of disability insurance benefits from every major disability insurance company.
Our attorneys have been able to either get our clients paid monthly disability benefits or obtain a one-time lump-sum settlement in more than 98% of our cases. Our disability insurance lawyers have seen it all when it comes to disability insurance claims and we know exactly what it takes for your disability claim to be approved.
We offer disability insurance attorney representation nationwide and we welcome you to contact any of our LTD lawyers for a free immediate review of your disability claim. We also invite you to visit and subscribe to our YouTube channel where we have more than 900 videos and regularly provide tips to help protect your disability benefits.
Who do you help?
Our disability insurance attorneys help individuals that have either purchased a long term disability insurance policy from an insurance company or obtained short or long term disability insurance coverage as a benefit from their employer. We have helped individuals in almost every type of occupation with monthly disability benefit payments ranging from $1,500 to $50,000.
Our clients include all types of employees ranging from retail associates, sales representatives, government employees, police officers, teachers, janitors, nurses, pilots, truck drivers, financial advisors, doctors, dentists, veterinarians, lawyers, consultants, IT professionals, engineers, professional athletes, business owners, and high level executives.
A strong understanding and presentation of the duties of your occupation is essential for securing disability insurance benefits.
Do you work in my state?
Yes. We are a national disability insurance law firm that is available to represent you regardless of where you live in the United States. We have partner lawyers in every state and we have filed lawsuits in most federal courts nationwide. Our disability insurance lawyers represent disability claimants at all stages of a claim for disability insurance benefits. There is nothing that our lawyers have not seen in the disability insurance world.
What are your fees?
Since we represent disability insurance claimants at different stages of a disability insurance claim we offer a variety of different fee options. We understand that claimants living on disability insurance benefits have a limited source of income; therefore we always try to work with the claimant to make our attorney fees as affordable as possible.
The three available fee options are a contingency fee agreement (no attorney fee or cost unless we make a recovery), hourly fee or fixed flat rate.
In every case we provide each client with a written fee agreement detailing the terms and conditions. We always offer a free initial phone consultation and we appreciate the opportunity to work with you in obtaining payment of your disability insurance benefits.
Do I have to come to your office to work with your law firm?
No. For purposes of efficiency and to reduce expenses for our clients we have found that 99% of our clients prefer to communicate via phone, email, fax, or video conferencing sessions. If you prefer an initial in-person meeting please let us know. A disability company will never require you to come to their office and similarly we are set up so that we handle your entire claim without the need for you to come to our office.
How can I contact you?
When you call us during normal business hours you will immediately speak with a disability insurance attorney. We can be reached at 800-698-9159 or by email. Lawyers and staff must return all client calls same day. Client emails are usually replied to within the same business day and seem to be the preferred and most efficient method of communication for most clients.