ReliaStar reduces monthly disability insurance benefits to veteran due to VA benefits

This case is a classic example of how an insurance company can offset its long-term disability payments because the insured is receiving benefits from other sources. In this case, the Court upheld ReliaStar’s decision to reduce the monthly disability payment it sent to a veteran due to additional benefits the veteran was receiving from Veteran Affairs for the same disability. Let’s take a closer look to see why the court ruled the way it did.

Thomas Jones was employed as a trust officer at Hibernia Corporation until 2001. As an employee of Hibernia, Jones was enrolled in a long-term disability benefits plan, which was administered by ReliaStar. In 2000 ING Group acquired ReliaStar. On August 1, 2001, Jones applied for long-term disability benefits due to his disability of gastroparesis. Jones’s doctor submitted a letter to ReliaStar that explained that Jones’s disability was caused by numerous conditions, including type II diabetes mellitus, peripheral neuropathy, and diabetic gastroparesis. ReliaStar approved Jones’s disability claim effective May 9, 2001.

Prior to the award of benefits from ReliaStar, Jones had been receiving benefits from the VA since 1971 for a disability caused by a shrapnel wound to his left shoulder. In 1999, Jones applied for additional benefits from the VA based on diabetes. The VA awarded Jones the additional benefits in December 2001, with an effective date of November 18, 1999.

On April 19, 2005, ReliaStar informed Jones that it had discovered that he was receiving disability benefits from the VA because of his diabetes, and explained that his benefits under the ReliaStar plan would be reduced by the amount of his diabetes based VA benefits pursuant to a provision in the plan. Under the ReliaStar plan, “Other Income is subtracted from the benefit a participant would otherwise receive.” “Other Income” is defined as income that a plan participant is eligible to receive based on the same or related disability for which he is eligible to receive benefits under the Group Policy. ReliaStar concluded that because both the VA and ReliaStar both included diabetes as causes of Jones’s disability, the VA benefits could be subtracted from the benefits ReliaStar paid to Jones.

After Jones’s administrative appeal was denied by ReliaStar, Jones filed suit in federal district court. The district court denied Jones’s request for discovery and dismissed the case, concluding that ReliaStar’s decision to offset Jones’s benefits was not an abuse of discretion. Jones then appealed that decision.

Jones’s Appeal

Jones believed the lower court’s decision was wrong for three reasons:

  1. that the Court used an incorrect standard of review when it reviewed the plan administrator’s decision under an abuse of discretion standard;
  2. that the Court erred when it denied his motion to conduct discovery; and
  3. that the Court was incorrect when it ruled that ReliaStar’s decision to offset Jones’s disability benefits was not an abuse of discretion.

The Court’s Analysis

The United States Court of Appeals for the Eighth Circuit agreed with the lower court’s ruling in favor of ReliaStar.

With regards to the first argument that Jones raised on appeal, that the court should not have used the abuse of discretion standard, the Appeals Court noted that it has long been determined that when an ERISA plan provides a plan administrator with discretion to construe the terms of the plan, the court should review the administrator’s interpretation under an abuse of discretion standard. Firestone Tire & Rubber Co. v. Bruch. The Court stated that this standard applies even if the evaluator of the claim is operating under a conflict of interest, such as here where ReliaStar is both the insurer and the administrator of the plan. Metropolitan Life Insurance Co. v. Glenn.

As to Jones’s second argument, that the court made an error in denying his request for discovery, the Appeals Court noted that there is a general rule that in ERISA cases the review of the courts is limited to the evidence (the administrative record) that was before the administrator of the plan. LaSalle v. Mercantile Bancorporation, Inc. The Court continued that Jones’s argument that he should be allowed discovery to explore ReliaStar’s conflict of interest is moot because ReliaStar has conceded that it was both insurer and administrator of the plan.

Finally, with regards to Jones’s last argument that ReliaStar’s decision to offset Jones’s disability benefits was an abuse of discretion, the Court noted that the administrator’s interpretation of the plan’s language must not be inconsistent with the plan’s goals, must not render the language of the plan meaningless, superfluous, or internally inconsistent, must not conflict with the substantive or procedural requirements of ERISA, must not be inconsistent with prior interpretation of the same words, and it must not be contrary to the plan’s clear language. Erven v. Blandin Paper Co. Finally, the Court declared, the administrator’s interpretation must be reasonable. King v. Hartford Life & Accident Ins. Co. The Appeals Court concluded that ReliaStar’s decision to offset Jones’s benefits was consistent with all of these requirements.

The plan directed ReliaStar to offset the payment of disability benefits by the amount of benefits that a participant receives from other sources because of the same or related disability. ReliaStar reasoned that the 1999 award of VA benefits based on Jones’s diabetes was “separate and distinct” from the 1971 award of VA benefits based on the shoulder injury. However, ReliaStar determined that the VA’s award of benefits in November 1999 for diabetes is related to the plan’s May 2001 award based on numerous conditions including type II diabetes mellitus, peripheral neuropathy, and diabetic gastroparesis.

The Plan did, however, provide an exception that benefits will not be reduced by disability benefits that the participant receives from a past employer, if these benefits have been paid continuously to him for more than 2 years before he becomes eligible to receive benefits under the Group Policy. The administrator determined that the exception did not apply to Jones and that the offset was appropriate because he did not begin to receive benefits from the VA for the diabetes-related disability more than two years before he was eligible to receive disability benefits under the plan (November 1999 from VA, May 2001 from the plan).

The Appeals court therefore concluded that ReliaStar did not abuse its discretion in deciding to offset Jones’s disability benefits based on his receipt of diabetes-related disability benefits from the VA.


Did you find this helpful?
Unhelpful (0)

Resources to Help You Win Disability Benefits

Disability Benefit Denial Options
Submit a Strong Appeal Package

We work with you, your doctors, and other experts to submit a very strong appeal.

Learn more

Sue Your Disability Insurance Company

We have filed thousands of disability denial lawsuits in federal Courts nationwide.

Learn more

Protect Your Benefits
Get Your Disability Application Approved
We help claimants throughout the entire application process.

Learn more

Prevent a Disability Benefit Denial
We manage every aspect of your disability claim following claim approval.

Learn more

Negotiate a Lump-Sum Settlement

Our goal is to negotiate the highest possible buyout of your long-term disability policy.

Learn more

Voya Financial Reviews
(642)

Policy Holder Rating

0 out of 5
0
Read 0 reviews
0would recommend
5
0%
4
0%
3
0%
2
0%
1
0%
Timely Payments
0.0out of 5
Handling Claim
0.0out of 5
Customer Service
0.0out of 5
Dependable
0.0out of 5
Value
0.0out of 5
Showing 8 of 642 Reviews
Sedgwick

AT&T Was Great and Sedgwick Horrible

Reviewed by From a great job to a complete nightmare on March 20th 2024   Verified Policyholder | March 2024 date of disability
My Physician recommended that I take some time from a toxic environment after several deaths in my family coupled with AT&T trying to run tenured employees out of the door... read more >
New York Life

Keeps claiming they will not approve claim for pre existing conditions but my illness is not preexisting

Reviewed by M.T. on February 15th 2024   Verified Policyholder | May 2023 date of disability
I have been appealing a claim for LTD for 8 months! New York Life keeps claiming they will not approve claim for pre existing conditions but my illness is not preexisting ... read more >
Reliance Standard

Staff Lie

Reviewed by Tanya on February 12th 2024   Verified Policyholder | August 2021 date of disability
I had my disability cut off the day I was scheduled to find out whether I should have surgery. The claims examiner was aware that I had an appointment on that date and sai... read more >
Reply
Sent on February 12th 2024 by Attorney Gregory Dell

I am sorry to hear about your experience. It’s crazy that Reliance Standard would deny your disability benefits when you are suffering so badly that you need surgery.... read more >

Hartford

Former Hartford employee has had life insurance and accidental death policy's revoked for one late premium payment

Reviewed by Becky H. THOMAS on February 12th 2024   Verified Policyholder | February 2024 date of disability
Dislike how they are constantly interrupting the lives of their disabled EE's whom are entitled to benefit which they paid into out of there pay check every pay period onl... read more >
Reply
Sent on February 12th 2024 by Attorney Gregory Dell

Thank you for your review of Hartford and we appreciate you sharing.  It’s sad they don’t take care of their own employees.

Lincoln Financial

Never received benefits my entire leave - or help with them

Reviewed by Anna on December 19th 2023   Verified Policyholder | November 2023 date of disability
I used my short term disability insurance for maternity leave and started the process beforehand knowing when I would be out (scheduled induction.) It took a little over a... read more >
Sun Life

Unscrupulous Tactics

Reviewed by Misseekayy on December 19th 2023   Verified Policyholder | May 2023 date of disability
Sunlife uses unscrupulous tactics in order to prevent payment of claims. They wait until it is close to the 30 day mark and then they ask for another form of information o... read more >
Sedgwick

Lame

Reviewed by Dennis T. on December 11th 2023   Verified Policyholder | March 2022 date of disability
My experience with Sedgwick and personell is as follows: Unhelpful, unprofessional and an overall unpleasant experience.
Unum

Low payments

Reviewed by Dorothy on November 30th 2023   Verified Policyholder | November 2023 date of disability
I was injured at work. I did house keeping in a hospital. I tore just about everything imaginable in my knee. I was let go from my job, because I was no longer able to do ... read more >
Answered Questions by Our Lawyers
(0)
Helpful Videos
(889)
Showing 12 of 889 Videos
Disability Benefit Tips
(331)
Showing 8 of 331 Benefit Tips

Why Must Your Disability Insurance Lawyer Understand Your Disabling Condition?

When it comes to securing your long term disability benefits, it's vitally important that you... Read More >

Disability Benefit Denial Reason #5 – Your Medical Evidence is Weak

If you're seeking long term disability benefits from an insurance company, you may be concern... Read More >

Disability Benefit Denial Reason #4 - Your Doctor Is Misled By the Disability Company

When you're seeking disability benefits under a long term disability policy, your medical rec... Read More >

Disability Benefit Denial Reason #3 - Video & Social Media Surveillance

One thing many long term disability claimants don't know about (or expect) from the claims re... Read More >

How Do You Fight a Long-Term Disability Denial?

Getting a denial letter from your disability insurance company is one of the ultimate insults... Read More >

Disability Denial Reason #2 - Change of Disability Definition & Vocational Review

One of the top reasons for terminating a claimant's long term disability benefits involves th... Read More >

Disability Denial Reason #1 – Paper Review & IME

At Dell Disability Lawyers, we've seen insurance companies give countless reasons to deny lon... Read More >

How to Apply for Reliance Standard Disability Benefits & Top 5 Reasons for a Claim Denial

At Dell & Schaefer we’ve handled hundreds of long term disability insurance claims against Reliance Standard, and have learned a few thi... Read More >
Dell Disability Cases
(375)
Showing 8 of 375 Dell Disability Cases

Seven Surgeries and The Standard Still Denies Long Term Disability Benefits

Our client was employed with the State of Oregon as a Technical Support Representative. She s... Read More >

Sun Life Wrongfully Denies Disability After Paying For 23 Months

We represent a 57 year-old claimant who’s occupation was selling commercial vehicles for ma... Read More >

Transportation Manager with Brain Injury Wins Unum Disability Benefit Appeal

Unum unjustly terminated our client’s long term disability claim after it had approved and... Read More >

Engineer With Depression Wins Prudential LTD Appeal

The claimant is a former Senior Technology Services Engineer for Accolade, Inc. who was force... Read More >

New York Life Approves Disability Benefits for School Teacher With Multiple Sclerosis

Our client, a former elementary school teacher suffering from Multiple Sclerosis, contacted our office after New York Life terminated her clai... Read More >
Disability Lawsuit Stories
(765)
Showing 8 of 765 Lawsuit Stories

Vermont Federal Court Makes ING / Reliastar Reevaluate its Denial of LTD Benefit Under Any Occupation Definition

The Federal District Court in Vermont noted that there was no question that the plaintiff suffered from "degenerative disc disease resulting i... Read More >

Texas claimant takes Reliastar to task for denied disability benefits

Suffering from multiple medical conditions and unable to function in a daily job, a health care professional and her Texas disability lawyer f... Read More >

ReliaStar reduces monthly disability insurance benefits to veteran due to VA benefits

This case is a classic example of how an insurance company can offset its long-term disability payments because the insured is receiving benef... Read More >

Reliance Standard Disability Denial Upheld Due to Claimant's Lack of Strong Medical Record Support

In the case of Amy Wright v. Reliance Standard Life Insurance Company (Reliance), Plaintiff was the vice-president of... Read More >

Unum Wrongfully Terminated Disabled Lawyer’s Disability Claim of Depression and Anxiety Despite Improvement in His Condition

This Unum lawsuit and appeal in federal court is a great victory for all Unum disability claimants. This ca... Read More >

Federal Court Overturns Aetna Denial Of Disability Benefits

In the recent case of Ferrin v. Aetna Life Ins. Co. a federal judge from the Northern District of Illinois determined that Aetna improperly te... Read More >

Court Finds Irregularities in Procter & Gamble Long Term Disability Benefit Denial

In ERISA cases filed in a district court asking for judicial review of a plan administrator's denial of benefits, the court is generally limit... Read More >

Reviews from Our Clients

Request a Free Consultation

Our Lawyers Respond Same Day

5 Ways We Help Get Your Benefits Paid

Get Your Disability Application Approved

Our goal is to get your application for disability income benefits approved. Applying for disability 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 lawyers will guide you through the entire application process and give you the best chance to get your disability claim approved the first time.

Submit A Strong Appeal Package

If your disability insurance benefits have been wrongfully denied, then our 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 lawyers 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 lawyers 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 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.

Negotiate a Lump-Sum Settlement

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 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 lawyers 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.

In more than 98% of our cases, our lawyers have been able to either get our clients paid monthly disability benefits or obtain a one-time lump-sum settlement. Our 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 welcome you to contact any of our attorneys 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 700 videos and regularly provide tips to help protect your disability benefits.

Who do you help?

Our lawyers 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 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, GoToMeeting 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 800-698-9159 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.