We're reviving our #FAQuesday series in January 2022 to provide you and your clients with the information needed for ERISA claims. Today, we're addressing perhaps a question that you've never considered with ERISA claims: In a long-term disability claim, can an insurance company make a claimant pay back money that they have paid to their attorneys? Watch today's video to find out more.
How This Impacts LTD Claims
This question can arise when a claimant receives a Long Term Disability (LTD) benefit and then later obtains Social Security Disability (SSD) benefits.
The LTD insurance company may say that the SSD benefit and back benefits should offset the LTD benefit, and the claimant owes them that money. The question then arises whether the money the claimant paid their attorney to obtain the benefit should be paid back as well.
Despite how unfair that sounds, there are some plan documents that say that a claimant must pay back all money that they were due to receive from Social Security. The LTD insurance company may argue that means even money paid to a claimant's attorney or that the Social Security Administration withheld to pay to the claimant's attorney. Unfortunately, the Court will enforce the plan document the way it's written. Therefore, it is crucial to have an experienced ERISA disability attorney review a claimant's plan document. To change the plan document, the claimant's employer and HR department must pick a different carrier or a different policy in connection with the benefits they provide employees.
How This Impacts Workers' Comp Claims
This question can also arise when a workers' compensation claim is involved.
Unfortunately, if the workers' compensation statute is not drafted to exclude money to your attorney, then that money will be taken as part of the offset. This is something that should be addressed with a claimant's employer's HR department ahead of filing a workers' compensation claim.
Don't Let Your Clients Make a Huge Mistake
This unfairness leads some to decide to not hire an ERISA attorney when trying to obtain an LTD benefit, which can severely harm their ERISA claim due to the law's complexity.
Unless someone deals with ERISA every day and understands both the law and the strategies of insurance companies, then the claim may be denied, and the chance of any future benefit may be lost for 10-20 years.
This unfairness also leads some to not hire a Social Security Disability (SSD) attorney.
Again, not hiring an experienced SSD attorney who knows what they are doing and that focuses on SSD claims can severely impact a claimant's chances of receiving SSD benefits. If the claim is denied, then the claimant must reapply and move the start date for their Social Security benefit forward resulting in losing out on benefits for a significant time frame.
Contact us today if your client has an ERISA long-term disability, short-term disability, life insurance, or retirement benefits claim.