Sedgwick and AT&T sued as a result of SSDI Overpayment

A recent decision by a Federal Judge in a California ERISA Disability Lawsuit serves as a reminder to all individuals receiving disability benefits: If your disability policy allows for the insurance company to “offset” other income benefits and to collect for overpayments, you must always remember that eventually you may owe that money to the insurance company should they request it soon thereafter or at a later date.

In a case against AT&T Umbrella Benefit Plan No. 1 (a long term disability plan for AT&T employees which was third-party administrated by Sedgwick), a claimant brought suit after the Plan reduced his benefits by $500 per month in an attempt to recover $63,288.11 in past overpayments it believed were owed to AT&T by the claimant.

Claim History

The claimant previously applied for, and received, long term disability benefits from AT&T and Sedgwick. While he was on claim he also applied for, and was eventually approved for, Social Security Disability (SSDI) Benefits. Soon after being approved by the Social Security Administration (SSA), the claimant received a sizeable back benefits check for SSDI benefits for the time period when SSA first found he was disabled to the present. The SSA also began sending him a monthly benefit check due to his disability.

The claimant’s policy with AT&T allowed for AT&T to offset any other income the claimant received while on claim for long term disability benefits. Nearly a year after SSA awarded the claimant disability benefits, AT&T finally got around to requesting the overpayments it believed were owed. AT&T requested that the claimant pay it $63,288.11, the sum of money the SSA eventually paid the claimant for the same time period that AT&T had already paid. Unfortunately, by the time AT&T made this request, the claimant had already spent the money. In an attempt to recoup the money it believed was owed, AT&T began to reduce the claimant’s LTD benefits by $500 per month.

ERISA Disability Lawsuit

Upset at receiving $500 less in benefits per month, a lawsuit was filed. In the lawsuit, the claimant made various arguments in an attempt to justify his belief that he should not have to pay AT&T the money back. Most notably the claimant believed that AT&T’s long delay in requesting the overpayment somehow prevented AT&T from now collecting the money. The claimant argued that this delay effectively waived AT&T’s rights to the money. Unfortunately, the Court did not agree.

The Court first noted that “the terms of the Disability Plan ‘unambiguously’ grant (AT&T) the power to reduce (the claimant’s) LTD benefits to account for a retroactive SSDI award. “The Court also noted that although AT&T waited a year to request the money, AT&T informed the claimant on several occasions that should he be awarded SSDI benefits, he would be required to reimburse AT&T for any overpayment. This was done both verbally and through letters. Additionally, before the claimant began to receive LTD benefits from AT&T, he signed an Agreement that stated he would notify the claims administrator immediately if he was awarded SSDI benefits and that he would repay AT&T in full any money that ended up becoming an overpayment. Finally, the Court noted that the Disability Plan itself states that “failure to apply an offset as soon as it is available shall not constitute a waiver of offset rights or otherwise prevent their later exercise.”

In the end, the Court found that the delay in requesting the overpayment from the claimant did not constitute a waiver of AT&T’s rights to the reimbursement. The Court also stated that the claimant “should have known that the retroactive SSDI award was not his to spend. Thus, Plaintiff’s current state of financial hardship for having spent the retroactive SSDI award does not persuade the Court that equitable relief is warranted.”

While our firm did not handle this case, it can serve as a reminder that before a claimant spends any money they receive from Social Security (or another source), it is best to speak with your Disability Attorney who can guide you through this process. Failure to send in the overpayment can lead to one’s benefits being reduced, totally suspended or even denied. The disability attorneys at Attorneys Dell & Schaefer , Chartered, represent claimants nationwide and are available for a free consultation to discuss your disability claim options.

Videos, Questions, Resolved Cases, Lawsuit Summaries & Company Reviews

disability insurance companies complaints

View videos, articles, resolved cases and claimant reviews about your specific disability insurance company.

Leave a comment or ask us a question

There are 10 comments

  • Natasha,

    I would suggest you contact AT&T to discuss repayment of any overpayment. Under the AT&T policy, your monthly benefit would be reduced by the amount received from SSDI.

    Stephen JessupJan 20, 2015  #10

  • Hello, I honeslty thought that once I recieved money from social security that, AT&T had already taken what they needed and since it came to my account that was for me. They are threatening to cut my long term. Can they work something out with me? I never understood why would it be an overpayment when that’s the amount I was receiving from the beginning.

    NatashaJan 19, 2015  #9

  • Pam,

    You will be required to file an administrative appeal prior to the filing of any lawsuit.

    Stephen JessupDec 10, 2014  #8

  • I am an AT&T employee. I have been on short term disability from December 20, 2013 till October 1, 2014. When I was denied, Sedgwick stated what was faxed from my doctor was not enough, which was faxed on November 3, 2014 stating I was totally disabled. Since I was denied short term disability from October 1 to Nov 3, my long term was denied. I did appealed and won. Now At&T says they over paid me and the offset was $5560.00. They knew I was on Social Security Disability and did not take the appropriate funds out from Jun to Nov. They claim the offset was from June to November. I have not recieved any payment from AT&T since September 2014. Do I have a right to sue them or what can I do?

    Pam LyonDec 9, 2014  #7

  • Jenn,

    You make very valid points. Two issues though: (1) you may not receive SSDI benefits and (2) drawing from an employer pension early could result in penalties. Although the policy does allow for the offset of other income benefits, it does provide some level of protection (albeit as indicated time and time again- a small amount) in the event Other Sources of Income are not received.

    Stephen JessupNov 1, 2014  #6

  • In regards to long term disability, if AT&T offsets (subtracts) from the LTD payments, from monies received from SSDI and employer pension, why even bother with LTD? AT&T only pays 50% of the employee’s wages until age 65. If an employee is 61 years old, it seems like it would be better to apply for SSDI along with their pension. Is there an advantage that I’m missing?

    Jenn VoigeOct 31, 2014  #5

  • Terry,

    They may be willing to negotiate with you as to same. My suggestion would be to inquire.

    Stephen JessupFeb 13, 2014  #4

  • Thank you in advance for taking the time to answer my questions. My LTD thru Principal is 2079 a month. My recently awarded SSD is 1560 a month along with back payment of 20 grand. My LTD contract still has 42 months left on a 5 year contract so if I didn’t owe any back pay the difference the LTD carrier would still owe me monthly for the remainder of said contract would be $519 a month. My question is this: if I don’t pay back any of the overpayment and reason with LTD that $519 a month for the remainder of our contract would offset the amount of overpayment that I owe if they just keep that monthly amount as the monthly payment on the sum owed will they go along with that reasoning and allow me to pay them back in that manner? I would rather get $1560 a month SSD, lose the $519 difference a month as repayment to Principal and keep the 20 grand…

    TerryFeb 12, 2014  #3

  • Monica,

    Your question needs to be answered by a bankruptcy attorney and we don’t handle bankruptcy claims.

    Gregory DellFeb 26, 2013  #2

  • What if you filled for bankruptcy and the long term disability overpayment was discarded in court can Sedgwick still recoup said overpayment if they are awarded new disability and retired, when the original overpayment was from a past overpayment of originally filling with SSID?

    MonicaFeb 24, 2013  #1


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 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 telephone, e-mail, fax, sessions, or Skype. 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 attorney. We can be reached at 800-682-8331 or by email. Lawyer 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.


Bruce R. (Arizona)

Steve Dell has done an exceptional job with my disability application process. The firm is extremely well managed. They have acquired an incredible amount of experience over many years. I recommend them for disability insurance claims without reservation. 

Don (Florida)

I called this firm a few months ago completely disparaged due to a company cutting off disability benefits at a time that nearly caused me to lose everything.

Attorney Alex Palmera and Danielle worked hard to reach an amicable settlement and my case was settled a few months later. This is a good firm and the specific expertise in disability claims saved me countless hours of hassle at a time when an already fragile state existed.

Thank you Mr. Palamara and Danielle.

Sandra B. (Arkansas)

I have nothing but good things to say about how my buyout was handled with my disability claim. The level of professionalism was amazing. All of my questions and concerns were answered either by Danielle L. or Alex P. in such a timely manner and with such care I would recommend them in a heartbeat to anyone needing to approach their provider with buyout options.

They did a fantastic job communicating between the provider and me, always keeping my best interest at heart and always answering my many many questions. They really did take most of the stress out of this whole situation. I would give them a 10 out of 10 for every step of this crazy journey. Thank you so much for helping me through this.

Brenda R. (New York)

I needed assistance with an appeal for a LTD claim that was initially denied. Stephen understood what needed to happen to win the appeal and he did win the appeal for me.

Michael C. (Virginia)

Greg Dell and his assistant Anneli have been extremely responsive and helpful, not only our initial consultations, but in follow-ups 1 and 2 years later with the insurance company to ensure that they comply with their agreements (which they did), as well as a separate and only slightly-related inquiry about our health insurance. I always hear back from them very quickly, which is rare and greatly appreciated.

Jeff P. (Oklahoma)

After a very long and frustrating ordeal to keep my LTD payments coming I decided to seek assistance from and attorney. After much research and asking those in the legal profession Dell & Schaefer seemed to be the top choice. I reached out and Alex Palamara was the attorney assigned to my case. All I can say is the experience was outstanding. Both Alex and his Paralegal, Danielle Lauria were excellent to work with. They were very kind, concerned, understanding of my frustrations and treated me with the utmost respect. Communication was excellent with regular updates and telling me what I could expect in each stage of the process.

Alex was also very straight forward with what to expect and no pie in the sky promises or expectations were made. In the end we won our case and I believe it was solely due to their experience and knowledge of not only the laws but the insurance companies as a whole. I would highly recommend them and am very grateful for the help they afforded to me.

Chad B. (Illinois)

I originally spoke with 3 other long term disability lawyers about my case before contacting Dell and Schaefer. None of those law firms would take it. They said the chances of me winning was not good. After finding Dell and Schaefer online I spoke with one of the attorneys that has since left. He did take my case but later it was picked up by Rachel Alters. Rachel is amazing and a very intelligent attorney. She not only won my case but also was able to get my back pay for 6 months.

I also cannot say enough about Sonia Nogueira. Sonia was always quick to answer any of my questions. I would usually hear back from her within hours of sending her a email. I do not know where I would be if I hadn’t contacted them. My family and I cannot thank them enough. Don’t let an insurance company tell you they are not responsible for paying you. I paid them for 20 years monthly and they looked for any reason they could not to have to pay me when I needed my benefit. Thank you Rachel and Sonia for all you guys do.

Paul L. (New York)

Words can only scratch the surface regarding my experience working with Attorneys Dell & Schaefer. It’s a very emotional experience making the decision to utilize disability insurance. The unknowns were/are scary. From the very first phone call, the support staff was/are very professional and reassuring. I have been working with Attorney Steven Dell for approximately 10 years. He is confident, reassuring, listens to and addresses all my concern, and is extremely dilligent in understanding my specific policies for how they impact me. It is very reassuring that Steven handles and deals with the insurance company on my behalf. Attorney Dell’s team, and specifically Merlin, Attorney Dell’s assistant, is simply fantastic. Her professionalism and attention to detail have made all my communications with the office seamless.

Simply put, my experience with Dell & Schaefer made the emotional rollercoaster experience of my neck surgery seem like a walk in the park.

Thank You, Thank You, Thank You, to both Attorney Steven Dell and to Merlin for how you have helped me over these past 10 years.

Dilligence, Reassurance, Professionalism at every step, Confidence, Results.

With 10 years experience with working with Dell & Schaefer, taking that step to call Attorneys Dell & Schaefer was one of the best professional and personal decisions I have ever made.

You want to know what you can do – the below comment about posting your first name and last name initial on our website. Put up my full name, phone number, and email address. I will gladly speak to anyone about your office and tell them my story and how instrumental Steven and Merlin have been in my life over the past 10 years.

Speak With An Attorney Now

Request a free legal consultation: Call 800-682-8331 or Email Us