Filing for Social Security Disability Income Benefits and Group Long-Term Disability Benefits

If you become ill or injured and experience a disability that keeps you from performing your job duties, the financial burden can be great. However, there are options for seeking an income in these situations. One is claiming disability benefits through the Social Security Administration (“SSA”) also known as Social Security Disability Income (“SSDI”). Another is filing a claim with your disability insurer concerning a policy you have through an employer-sponsored group disability insurance plan.

You can file these claims simultaneously to maximize your disability benefits. It is a good idea to understand how SSDI and long-term disability claims may impact each other.

Qualifying for SSDI versus Group Long-Term Disability Claims

SSDI is a Social Security benefit. To qualify for this benefit, you must have earned enough work credits in jobs that qualify as work under the SSA. You can earn up to four credits a year and usually need 40 total credits to qualify for this benefit. Half of those credits must have been earned 10 years before your claim.

The SSA also has policies regarding a qualifying disability. SSA only pays SSDI claims related to total disability, and the definitions are fairly stringent.

A group long-term disability claim on the other hand is one that you file with an employer-sponsored short-term or long-term group disability policy. Typically, to qualify for these benefits, you must be a policyholder who was actively working full-time and meet the definition of disability under the insurance plan. In many cases, long-term disability insurance plans have disability requirements that are less strict than those of the SSA. For example, most group long-term disability policies pay disability benefits in the first two years of disability if you are unable to perform the substantial duties of your occupation. To qualify for SSDI, you must be unable to engage in any substantial gainful activity due to a medically determinable physical or mental impairment that is expected to last at least 12 months or result in death. This means you cannot perform your previous work and your condition must prevent you from adjusting to other forms of work that exist in significant numbers in the national economy.

If Your SSI Disability Application Is Denied, Does It Impact Your Group Long-Term Disability Claim?

Generally, a denial by the SSA does not negatively impact a claim with your long-term disability insurance plan. This is because the SSA has requirements for SSDI that may not be relevant to your insurance plan.

For example, consider a hypothetical situation wherein someone has returned to the workforce after a seven-year hiatus. That person may not have the work credits necessary to qualify for SSDI. However, if they have purchased an ERISA disability insurance policy through their employer, their lack of work credits would not be relevant to payouts under that plan.

If You Get SSDI, Can It Impact Your Claim For Group Long-Term Disability Benefits?

Conversely, if you are successful in receiving an award of SSDI benefits, this can have a significant impact on your long-term disability claim—particularly if you have to bring the matter to court.

Many long-term disability plans contain clauses that allow the disability insurer or plan administrator to reduce benefits dollar-for-dollar by amounts paid out by the SSA for SSDI benefits. This means that if you qualify for SSDI benefits, it will likely reduce, dollar-for-dollar, how much you are paid under your long-term disability policy. It is important to review your long-term disability policy to determine what types of offsets are allowed.

Moreover, if the SSA approves your claim for SSDI benefits, you may be able to buttress your arguments to a court or to a disability insurer, particularly if there is a finding in your favor by an administrative law judge. This is because the SSA has a very strict definition of disability and only pays benefits when it deems you are unable to engage in any substantial gainful activity. It is likely that if you meet the SSA requirements for a disability benefit that you also meet the requirements for a claim under a long-term disability insurance policy, especially where the standard is disability from your “own occupation.”

Courts may favorably consider an award of SSDI benefits as part of the evidence proving your disability when an insurance company has wrongly denied your claim under a long-term disability insurance policy. In some of these cases, the courts have pointed to the existence of an award of SSDI benefits as proof of disability and ruled against the insurance company that wrongfully denied your claim.

However, an award of SSDI benefits does not automatically mean you will win any court battle against your disability insurance company. The courts consider SSDI benefits as a material fact within the context of all other facts in the case.

Hire an Long-Term Disability Insurance Attorney to Help With Your Case

Ultimately, the main takeaway here is that disability insurance claims can be complex. Add in the relationship between SSDI benefits and your long-term disability benefits, and the situation becomes even more complex. It often is a good idea to work with an experienced legal team when dealing with these claims, as a disability insurance lawyer helps you understand your options and what outcomes to expect.

A disability lawyer also works on your side and to support your interests, which is not what you can expect from your insurance company. Unfortunately, insurance companies have other stakeholders to appease, including executive leadership and shareholders. That means there is always a balancing act between paying claims and addressing cost-saving measures that benefit the business’s bottom line and the dividends paid to shareholders.

If your insurance company has arbitrarily denied your claim, consider hiring an experienced legal team to help you fight for the benefits you are entitled to. Contact McKennon Law Group PC to get a free consultation.