Mr. Walker was employed by Sonoco Products Company and was covered by Reliance’s long-term disability insurance plan. Mr. Walker ceased working due to a concussion and submitted a claim for long-term disability (“LTD”) benefits.
Initially, Reliance denied Mr. Walker long-term disability benefits but later reversed its decision and approved him for benefits.
Reliance provided Mr. Walker with a letter detailing the calculation of his monthly benefit. The calculation included offsets for pension benefits and short-term disability benefits, resulting in a net monthly benefit of $100. Reliance explained that a lump-sum payment from Mr. Walker's employer-sponsored pension plan was considered an offset and prorated it over 60 months.
Mr. Walker appealed Reliance's calculation, but Reliance denied the appeal. Mr. Walker initiated a legal action seeking judicial review of Reliance's calculation of his long-term disability benefits.
The court applied a de novo standard of review in this case. Under this standard, the court determines whether the administrator made a correct decision by interpreting the plan's provisions according to their plain meaning.
Walker argues that Reliance incorrectly interpreted the plan's provision regarding lump-sum payments, contending that the offset should apply from his retirement until his death. However, the court finds that the plan's language is unambiguous. The provision uses the term "period of time" to denote a fixed, definite length of time, and if no period is given, it defaults to sixty months. Prorating the lump-sum payment over an unknown period from retirement to death would be impossible. Additionally, if the proration were done only after retirement, it would render the retirement benefits provisions and lump-sum payment provisions as surplusage.
The court denied Mr. Walker's motion for judgment and ruled in favor of Reliance's motion.
What you need to know about Offsets from your LTD Benefits
Your LTD policy may have an offsets provision. This is found in a section of the policy titled Other Income Benefits, or something similar.
Offsets usually include other income you earned during your period of disability and may be subtracted from your monthly LTD benefit. Some of the most common offsets are:
- social security disability benefits,
- worker’s compensation benefits or settlement,
- personal injury settlement, and
- retirement disability benefits.
Whether the offset applies, and how it applies, to your benefit depends on your long-term disability insurance policy language. If you are concerned that your disability insurance company is improperly applying an offset to your claim, call us today and speak with a disability insurance lawyer to get a free evaluation.
Our Lawyers Specialize in Disability Insurance Claims
Because our law firm has always focused only on disability insurance, our lawyers are experts in legal representation for disability insurance benefits.
That means our disability lawyers have:
- Won several major disability lawsuits that help make better law for disability claimants;
- Experience fighting every major insurance company, such as UNUM, Hartford, MetLife, CIGNA, Prudential, and more.
- Successfully represented hundreds of clients and won millions of dollars in disability benefits.
Because federal law applies to most disability insurance claims, we can help clients across the country.
Disability insurance companies have lawyers. You should too. Call Dabdoub Law Firm to get experienced disability lawyers on your side.
We can help with:
- Submitting a disability insurance claim;
- Appealing a long-term disability denial;
- Negotiating a lump-sum settlement; or
- Filing a lawsuit against your disability insurance company.
Call (800) 969-0488 or contact us online to discuss your case with an award-winning disability insurance lawyer.