Prudential Claimants Unsuccessful At Challenging The Offsetting Of Dependents’ SSDI Benefit Award

Challenging the calculation that Prudential Insurance Company made when reducing their private benefit payments, Kathleen Schultz and Mary Kelly filed a class action lawsuit in hopes of receiving a positive, definitive decision concerning their claims.

Per ERISA (the Employee Retirement Insurance Security Act of 1974), when a disability claimant qualifies for Social Security Disability (SSD) Benefits and receives those benefits, the private insurer can deduct the amount of that Social Security Disability Insurance (SSDI) benefit from its payment to the claimant. In the case of these two women, their children also receive SSDI benefits and the two contend that “the plans do not authorize Prudential to include in the offset calculation the benefits paid to their dependent children on account of the plaintiff’s disability.”

Claiming that the language in Prudential’s insurance policy terms and conditions concerning this calculation are ambiguous and “should be construed against Prudential,” Schultz, Kelly and their Illinois disability lawyer appeared on January 17, 2012 to be heard on the matter.

Did Prudential Correctly Calculate Disability Benefits?

The primary issue at bar in this case are whether the insurer correctly reduced the plaintiffs’ Private disability benefits “based on their children’s Social Security disability benefits” and whether a child’s Social Security disability benefits payment that are  based on a parent’s disability qualify as “loss of time” disability benefits per their respective policies.

According to the Court’s opinion, the argument raised by the plaintiffs in this appeal concerned the purpose of Social Security payments to a “dependent child of a disabled parent is not to replace the income that the household has lost as a result of the parent’s inability to work. The purpose is instead to provide additional ‘support’ to the child.'” While the plaintiffs may have thought that the phrase “loss of time” is in reference to the loss of time to support their children, according to the Appellant Court, it means loss of time at work.

District Court Determine that Dependent Children’s SSDI is Subject to Offset

Stating numerous cases in which various courts have considered this issue and “found that dependent children’s social Security benefits were subject to offset under nearly identical policy language, the Illinois Circuit Court had to agree.  And, while the plaintiffs’ attorney did find at least one case where “loss of time” was considered to be a term of art “that permits the offset of payments made to compensate for the insured’s lost income, but no to compensate for the insured’s disability or for support to the insured’s children,” the Appellant Court, in this case, found that case to be of little merit.(Carstens, 520 F.Supp.2d at 1166). Ultimately, the Court, after hearing oral arguments on this case stated that “we wish to make abundantly clear that the offset language in these plans would not apply to social security benefits paid because of the child’s disability. The result the plaintiffs seek is not a reasonable interpretation of the plans’ use of the phrase ‘loss of time disability benefits.'”

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Our disability insurance lawyers help policy holders seeking short or long term disability insurance benefits from Prudential. We have helped thousands of disability insurance claimants nationwide with monthly disability benefits. With more than 40 years of disability insurance experience we have helped individuals in almost every occupation and we are familiar with the disability income policies offered by Prudential.

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Our lawyers help individuals that have either purchased a Prudential long term disability insurance policy from an insurance company or obtained short or long term disability insurance coverage as a benefit from their employer.

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“Whatever it Takes”, and you can take that to the bank, as I did. I was declared disabled in March 2010 after unsuccessful Back surgeries, CSC Implants, numerous other treatments, all which failed. I was (and still am) in constant pain requiring medication therapy and managment. June 2012, after receiving my benefit for 18 months I received a letter from my CIGNA case worker stating I no longer meet the contract definition of Disability. Therefore they stopped my benefit immediately. My numerous attempts at trying to resolve my Reinstatement Request was bogged down with hidden agendas, request for test after test, loosing documents from critical doctors supporting my claim, never returning my calls.

I contacted Dell & Schaefer, Alex Palamara, for a free consultation. He replied the same day. We spoke briefly and set an appointment the following day to pass detailed information. I faxed to him all supporting documents. In the beginning I was sceptical. But after a few weeks I could sense that they were a no BS organisation. I began to feel like they were really working hard for me. Throught the somewhat long process I was very impressed with the way they handled my case. They kept me informed of all issues via Email or calls. Never, never, did Alex (Mr. Palamara) or any of his staff fail to reply within 24 hours and usually within the same day to any of my request. I can’t say enough about the professionalism, courtesy, care, with the way they handled my case. My long hours of research have lead me to believe that Dell & Schaefer are by far the LTD hardest working informed agency out there. And, they would prove me right: as just recently I received a letter from Alex Palamara, forwarded from CIGNA stating a full reversal of my claim to begin immediately with full back pay and monthly benefits.

I cannot thank Alex and his staff enough for the fight they must have endured from CIGNA’s attorneys.

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