ERISA LAW BLOG

Often, one of the many important pieces of ERISA litigation is the existence of what is called an overpayment.  An overpayment often exists when clients have recently been approved for Social Security Disability benefits, or some other type of offset income (auto-accident settlement, workers’ compensation, etc.) after they have been paid LTD benefits for a time.

So what is an overpayment? Let’s assume the insurance company has approved you claim for disability and has been sending you monthly checks of $1,500 for one year, which represents the total amount you are entitled to for your disability. One year from your date of disability, the Social Security Administration approves Social Security Disability benefits in the amount of $1,000 per month, and they send you a check for the backpay (the monthly payments they owe you from the time you became disabled).  Moving forward, the insurance company may only have to pay you $500 per month ($1,000 from SSD plus $500 from the insurance company equals the $1,500 that you are entitled to).

What about the past year though? The insurance company may have overpaid you, and it may be entitled to a refund of the overpaid benefits.  In the above example, the insurance company may be entitled to some or all of the $12,000 SSDI back pay benefits. However, every case is different.  As with all ERISA cases, you should always check the plan documents.  While we are speaking in generalities here, and this is how most plans will operate, your plan could always be different.  Most plans will give you credit if you have to pay attorney’s fees to get your SSDI benefits and some plans, although rare, do not have an offset for SSDI benefits.  If your STD or LTD insurer ever asks for an overpayment, always consult with an experienced ERISA attorney to determine if you actually have to pay them any money.  If you use a Social Security attorney or a Social Security advocacy group provided by your insurer, do not take them at their word that you have pay back the insurer.  While they are likely correctly, that is certainly not always the case and if you consult with an experienced ERISA attorney, we may be able to reduce or eliminate the alleged overpayment.

At the Foster Law Firm, we are well versed in dealing with complicated overpayment situations. If you have been denied disability benefits, please do not hesitate to contact an attorney in the ERISA division of our firm.