If I have two different disability insurance policies and I am approved for Social Security Disability, can both disability companies deduct my monthly benefit by the amount of the SSDI payment?

The answer unfortunately is: depending on the language of the insurance policy, mostly likely yes, each disability insurance company can deduct the full amount of the SSDI payment from each of the disability benefit payments.

Unless there is substantial ambiguity in the language of the policy provision that permits the SSDI offset, the courts will more often rule in favor of enforcing the provisions of the disability insurance policy, regardless of whether such an application seems harsh or unfair.

In a California case brought against Unum, the claimant had two separate disability insurance policies that were provided by two separate employers, but both policies were administered by Unum. The claimant was approved for disability benefits that were paid out by both of the Unum policies. However, when the claimant was approved for Social Security Disability benefits, Unum offset each of the disability benefit payments by the full amount of the SSDI payment – essentially applying a “double” offset.

The trial court found in favor of Unum and upheld the “double” offset of the SSDI payment. The claimant appealed and the appellate court also found in favor of Unum. The appellate court held that the plain language of both of the disability insurance policies expressly permitted Unum to reduce the monthly disability benefit by “deductible sources of income” which included the amount the claimant was entitled to receive under Social Security Disability. Because neither policy contained language that made an exception for a case where a claimant was covered by two separate disability insurance policies, Unum was permitted under the policies to apply the SSDI offset to each disability benefit payment individually.

In another case out of Michigan, the claimant was covered by two separate disability insurance policies. However, the policies were administered by two different disability insurance companies. When the claimant was awarded SSDI benefits, each disability insurance company offset the full amount of the SSDI payment from the disability benefit. The court held there was nothing in ERISA (the federal law that governs employee welfare benefit plans such as long term disability) or in the claimant’s disability insurance policies that precluded a double offset of the claimant’s SSDI benefit. Further, the court held that it was within each plan administrator’s authority to determine whether the claimant’s benefits under the policy were to be offset by the SSDI benefit.

Therefore, if each of the disability insurance policies contain provisions which allow an award of Social Security Disability benefits to be offset/deducted from the benefit amount paid under the disability policy, then the courts will likely enforce this policy provision, even if it means that the full SSDI benefit amount is, in reality, deducted twice.

Attorneys Dell & Schaefer did not represent either the California or Michigan claimants in their claims for disability benefits or in their lawsuits.

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There are 8 comments

  • Kimber, Cigna does not typically offer lump sum buyouts on the total value of a critical care policy.

    Stephen JessupOct 10, 2017  #8

  • How long after claim is filed do you receive your lump sum on a critical care policy through Cigna?

    KimberOct 6, 2017  #7

  • CubsFan, if there is an overlapping period of time in which the STD benefit was paid and the SSA sends a SSDI payment then there would be a right to recovery under the policy. However, the chances of Aetna finding out about the SSDI or seeking recovery is likely minimal due to how much time has passed. On a side note, did you note have LTD coverage with your employer?

    Stephen JessupJun 13, 2017  #6

  • I received short-term disability (STD) from my employer for two approved medical leaves in 2015-16. The STD application and approval process were administered through Aetna. I no longer work for the company, as I was terminated when my FMLA and extended non-paid medical leave time ran out. I have since applied for Social Security Disability (SSDI) and will be awarded retroactive pay and back pay. Am I required to reimburse Aetna for STD benefits received 1-2 years ago while I was still employed? If so, what date is used as the disability onset–the actual date or the start of benefits date (6 month of disability) as recognized by the Social Security Administration? Am I required to inform my former employer that I will be receiving retroactive SSDI payments, or will they be informed by the Social Security Administration? If I need to reimburse, how do I go about it so that Aetna doesn’t come after me months from now wanting reimbursement? I don’t have a copy of the STD policy from my former employer and I don’t recall ever signing anything that said I would need to reimburse if I got SSDI later on. Thanks.

    CubsFanJun 9, 2017  #5

  • Kim, both your SSDI an DSSDI would be offsets under an employer provided disability insurance policy. If you do not advise them of receipt of same and they discover the award they will seek to recover and amounts due to them.

    Stephen JessupFeb 13, 2017  #4

  • Dear Attorney at Law,

    I’m having LTD’s monthly payment, Social Security just announced that they will pay me monthly with a certain amount and my children’s different separate amounts.

    The question is do I have to tell them my SSDI monthly payment?
    Do I have to tell my children’s monthly payments too since my SS case manager told me the payments apply for my children only and I am their representative to collect the money?



    Kim P.Feb 9, 2017  #3

  • Gary, most policies have a minimum benefit provision- typically $100 that they will pay regardless of the offset amount. If any applicable overpayment has been satisfied the carrier may very well be interested in buying out the policy (if there is a minimum benefit). Please feel free to contact our office to discuss in greater detail.

    Stephen JessupOct 13, 2016  #2

  • Will my LTD stop, if my SSD is greater or will LTD offer me a buyout.

    Gary W.Oct 5, 2016  #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, GoToMeeting.com 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.

Reviews   *****

Jeff S. (Kansas)

Due to my vision and health issues testimonials are not typical of me. Dell & Schaefer however did such a sensational, and professional job we felt it absolutely necessary to share the experience.

I had been thinking of pursuing a lump settlement on long term disability with the insurance company for some time. Decided on Dell & Schaefer after much research on several firms across the country. Residing in the Midwest did cause some reservations about choosing a firm around 1500 miles away. However shortly after choosing Dell & Schaefer my concerns where quickly put to rest by how proficient the team is, and how they are always there with you. Never waited for a response and always felt like we knew exactly what was going on every step of the way.

I got the pleasure of working with Mr. Stephen Jessup Esquire, along with Sonia R. Nogueira, and team on my case. After contemplating my situation Steve was contacted to let him know it would be about three months before moving forward. I mention this because no pressure was ever felt to pursue or take a settlement and the firm awaited me to contact them again. No annoying emails, calls, letters, or any type of pressure to hire them. When questions arose the team was right there for me through the entire process and only a phone call or email away. Never had to wait for a response before or after retention. Mr. Jessup at one point during my case was out of country and still offered guidance when needed, almost immediately after emailing. Sonia also went above and beyond and took my call around six P.M. on a Friday to help me with some document questions. Simply an incredible level of service that seems rare anymore. I always felt truly comfortable!

Mr Jessup and everyone with the firm seemed to have a very good rapport with the insurance company. I mention this because within about two weeks of retention we had the first offer. Within less than four weeks we had reached a settlement agreement, and funds where in my account about two hassle free weeks later. This all transpired even with delays of the insurance rep taking vacation twice. Overall my settlement expectations where far exceeded. During the original consultation Mr. Jessup mentioned a monetary figure that was lower than the actual final settlement. There where no false promises or over inflated estimates as sometimes found elsewhere. Just an upfront honest answer of what could be to come. During the process I still received my monthly benefit and never had to deal with the insurance company directly. This in itself took so much stress out of my life. After three years I no longer had to continually jump through hoops when the insurance company requested something or worry that I might undeservedly lose benefits.

The above is just a small part of my experience on how I felt the professional and courteous team was always willing to go the extra mile. If you or someone you might be concerned about are in need of guidance my opinion is a better choice could not be made than contacting the team at Dell & Schaefer about options.

Because of the work done by those at Dell & Schaefer I now have the funds to live while attempting medical procedures that insurance will not cover. Hopefully because of this someday I can return to a career as I’m still almost twenty years from retirement age.

Thank you all at the firm again for returning some normalcy to my life and treating me like a person not a case!

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