How ERISA Disability Insurance Benefits Fit In With Social Security Disability InsuranceWhen you have private disability insurance that you pay out-of-pocket or where the premiums are automatically deducted from your paycheck then that is usually governed under a federal law known as ERISA (Employee Retirement Income Security Act of 1974). If you're disabled and cannot work then you may qualify for Social Security Disability Insurance benefits (SSDI) with the Social Security Administration (SSA). These are very different types of disability insurance, one is private disability insurance (ERISA) and one is taxpayer funded government assistance (SSDI). Attorney Evan T. Engler, partner at Harris & Engler, helps clients with private disability insurance denial cases (ERISA) across the Sixth Circuit (OH, MI, TN, KY). However, even if you are just trying to get covered under your private disability insurance plan you are almost certainly going to have to also deal with Social Security Disability Insurance (SSDI).
If you're trying to qualify for long-term disability insurance benefits, or you are already receiving long-term disability insurance benefits, then at some point your disability insurance company is going to require you to apply for Social Security Disability Insurance. This is because as part of the contract with most disability insurance companies, you will be required to apply for Social Security Disability Insurance benefits after a certain period of time after receiving the private disability insurance benefits. Why do disability insurance companies do this? Because they get to offset your SSDI monthly benefit from the monthly amount that they have to pay you. For example, if you're receiving $2,500 per month in disability insurance benefits and then you get $1,500 in SSDI benefits per month, then your private disability insurance company only has to pay you $1,000 per month. You are still receiving a net $2,500 per month. This is why the disability insurance companies usually pay for an attorney or company to help you apply for SSDI benefits because they end up saving a bunch of money if you get approved for SSDI benefits.
Does Getting Approved For SSDI Help Your ERISA Disability Insurance Case?It happens all the time where you get approved for SSDI and then later get denied by your ERISA disability insurance carrier. If that happens, then you need to talk to an ERISA disability insurance attorney because there are some things you can do about it. There are simply different legal standards governing the approval or denial of private ERISA disability insurance benefits or Social Security Disability, so you can certainly be approved on one and denied on the other. However, a good ERISA disability attorney will know how to use your SSDI case to your advantage when it comes to your private disability insurance case.
The Sixth Circuit Appellate District has found that when a disability insurance company (1) encourages the applicant to also apply for SSDI, and (2) the disability insurance company benefits financially from the applicant getting awarded SSDI; and if (3) the disability insurance company fails to explain why their decision on disability insurance is different than the SSA's decision, then the Court will use that to find that the insurance company made a bad decision. Bennett v. Kemper Nat'l Servs., Inc., 514 F.3d 547, 554 (6th Cir. 2008).