HOW DO OFFSETS AFFECT YOUR LONG-TERM DISABILITY BENEFITS?
Built in as provisions to your policy, offsets allow your insurer to reduce the amount of benefits they pay out, based on the other resources that pay you monthly payments for your disability. For example, if you receive money from worker’s compensation, Social Security or state disability programs, your insurance provider can legally deduct those amounts from their monthly payments to you. ERISA law requires employers and insurance companies to inform employees of these offsets and how and when they are applied. Under ERISA law, your employer is required to provide a Summary Plan Description to each covered employee that is in plain language that is easily understood.
Though ERISA law ensures that you can find and understand when and what benefits have offsets attached, it does not regulate the type of benefits that are offered. ERISA does not preclude or determine the offsets that are included in any long-term disability policy or coverage. At this time, no laws prohibits the use of benefit offsets. According to uphelp.org, these offsets allow insurance companies to effectively “shift the burden” to other parties, i.e worker’s comp or the state where disability programs exist such as California or New Jersey among others.
Offsets are just another detail that you need to make sure that you fully understand when making an ERISA claim, as those offsets can often be confused with denial or illegal reduction in benefits. Protect yourself by becoming fully informed with your long-term disability benefits and what they entail.