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What Is An “Offset” For “Other Income Benefits” or an “Overpayment?”

It means the insurance company can subtract the offset from your gross long term disability benefit. Employees are often provided health insurance, life insurance, long-term disability insurance and other benefits by their employers. Most of the time, disputes over these benefits fall under the Employee retirement Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et. seq.. There is no requirement that an employer provide LTD benefits coverage. Some employers offer that as a “stand alone” benefit option, while other employers have an overall employee benefit plan that provides that a person who is receiving LTD benefits under the company's plan the employee may also be eligible to continue other benefits, such as health insurance. Most ERISA LTD plans require a person to file for Social Security Disability, 7 and then offset for the Social Security a person receives. Depending on how the plan is written, the LTD payment can be reduced by the individual's “primary” Social Security amount, or the LTD may be further reduced by the “family” or “dependents” benefits that are paid by Social Security on account of the disabled person's disability. LTD plans often also offset for worker's compensation benefits, and sometimes for VA benefits. Depending on the Plan, LTD plans can offset for even more forms of income, such as payments by third parties, or other forms of disability insurance. Many of these plans contain terms that allow an insurance company or plan administrator to recover benefits that have been “overpaid.” For disabled people who are fortunate enough to have long-term disability benefits available through work, those benefits work as a supplement to Social Security Disability.

Typically, LTD benefits are paid as a percentage of a person's pre-disability earnings, but the LTD policies usually are reduced by any Social Security benefits the person is awarded. If the disabled person is first paid the LTD benefits, and then later wins his Social Security benefits, many ERISA policies allow the insurance company or self-funded ERISA plan to recover the “overpayment” that results by paying the full amount of LTD benefits, but a later award of Social Security means that a lower LTD amount should have been paid.


Seth has always been compelled to excel, whether it meant earning his Eagle Scout as a teenager, participating in theater, debate and varsity football in high school, his Rhodes Scholar candidacy in college, or opening his own law firm. He also perseveres in situations others might shy away from, whether it involves sky-diving, rappelling down a mountain, white-water rafting, participating in marathons and triathlons, writing a novel, or lecturing nationally to large audiences about the vagaries of ERISA.


Seth is committed to serving disabled individuals. He is proud of his work in prominent organizations such as the American Association for Justice (AAJ), the Tennessee Bar Association (TBA) and Hospice. Seth is past-Chair of both AAJ's & TBA's Disability Law Sections, past-President of the Chattanooga Trial Lawyers Association, a 2-time recipient of the Pro Bono Excellence Award, and a 7 year member of the Board of Directors for Hospice of Chattanooga.