Maryland ERISA Disability and Offset Provisions
When a person signs up for a disability insurance policy under ERISA law, they expect to pay a premium in exchange for the assurance that the insurance company will deliver the agreed-upon monthly benefit stated in the policy.
Some disability insurance policies may contain language that permits the insurance company to reduce the total amount of monthly benefits it is required to pay if the policyholder is receiving benefits from another source.
Even the insurance company’s admission that the policyholder is disabled within the terms of the policy may not mean that the insurer will pay the full monthly benefit listed in the policy.
An experienced disability insurance attorney could provide legal insight on how Maryland ERISA disability and offset provisions can affect your policy and whether your benefits are at risk of being reduced. Reach out to a dedicated ERISA lawyer today.
Common Sources of Offset Provisions in Maryland
Worker’s compensation, state disability benefits, social security, and supplementary disability insurance policies are some of the most common sources from which policyholders may find their disability benefits subject to an offset. However, the frequency of offset provisions may vary based on the policy type. Group policies and employer-sponsored ERISA policies are more likely to contain offset provisions as opposed to individual disability insurance policies.
Because of these offset provisions, insurance companies often recommend that policyholders seek Social Security disability benefits. An insurer can go as far as assigning third parties to guide policyholders through the entire process. Unfortunately, this seeming act of compassion keeps the insurance company’s best interests at heart. Often, the approval of Social Security benefits results in a claim denial by the insurer.
Even if disability benefits are approved, the offset provision may allow the insurer, not the policyholder, to receive the government’s money.
ERISA requires employers to give their employees a “Summary Plan Description” which explains the rights and obligations of the participant under the plan. Offset provisions should be included within the summary, but in cases where there is little to no information regarding these provisions, employees can ask for it in writing.
Can Offset Provisions Be Removed from an LTD Policy?
There is no law prohibiting insurance companies from offsetting disability benefits. Although ERISA has extensive rules and regulations about what employers must do when they offer benefits to their employees, it does not tell insurance companies what kinds of benefits they have to offer or govern how those benefits should be calculated.
The terms of the disability plan are typically negotiated between the employer and the insurance company before being offered to employees. Disability benefit programs, both private and public, are designed to prevent people from earning more money on disability than they would while working.
Insurance companies can sell “attractive” benefit plans to employers. However, the insurance companies may end up paying less than their financial obligation, as the offset provision stated within the policy may allow the insurer to defer their responsibilities to another party.
Speak to a Maryland Attorney About ERISA Disability and Offset Provisions
Benefit offsets, occupational definitions, and appropriate care standards in your policy can severely impact your ability to collect full monthly benefits if you become disabled.
If you are an employee covered under your employer’s group disability plan and had your claim denied, or if you have questions about Maryland ERISA disability and offset provisions, there is no substitute for a skilled disability lawyer who can determine whether your insurer is wrongfully offsetting your benefit and provide stout legal counsel. To learn more, call today.
