Posted on Saturday, July 20th, 2024 at 9:00 am
Many people with severe disabilities in Pennsylvania qualify for long-term disability insurance and Social Security disability benefits. However, because the application process for a Social Security disability claim can take a year or longer, people may start receiving their long-term disability insurance benefits before their Social Security claim is approved. This delay can create problems, as most insurance companies “offset” their benefits by the amount a policyholder receives in Social Security disability and require the policyholder to return the “overpayment” they received while their SSDI claim was pending. But what if someone doesn’t want to give back the overpayment? Is there a long-term disability overpayment statute of limitations?
In short, yes. A dispute like this could lead to a breach of contract claim filed against you by a disability insurance company. The long-term disability overpayment statute of limitations for breach of contract claims in Pennsylvania allows the insurer four years to file a lawsuit. Suppose the insurance company doesn’t take legal action within four years of when you begin receiving your Social Security or other disability benefits. In that case, you might be able to avoid paying them back. But don’t count on an insurer to wait that long. These companies go to great lengths to protect their profits.
If you have questions about long-term disability benefits, Capitan Law’s Philadelphia long-term disability lawyers can help. Our firm focuses solely on long-term disability claims, giving us deep insights and extensive experience that we can put to work for you.
How Offsets Work in Pennsylvania Long-Term Disability Claims
Offsets in long-term disability claims are adjustments made to your benefit amount based on other sources of income you receive. In Pennsylvania, if you receive income from sources like Social Security Disability Insurance (SSDI), workers’ compensation, or other disability benefits, your long-term disability insurer may reduce your benefits accordingly.
Insurance companies justify these offsets to prevent “double-dipping,” where you might receive more income than you would have earned if you were working. For example, suppose your long-term disability policy pays 60 percent of your salary, and you also receive SSDI benefits. In that case, the insurer may reduce your disability payment by the amount you receive from SSDI. This ensures the total income from all sources does not exceed the intended coverage level.
Understanding how offsets work is crucial because they directly affect the amount you receive from your long-term disability insurance. Knowing about potential offsets can help you plan your finances and avoid surprises. Review your policy terms to understand what income sources might lead to offsets and how they could impact your benefits.
What Happens When an Insurer Says You Received an Overpayment
The procedure for paying back an insurance company for overpayment in a long-term disability claim depends on the policy and the insurer. In general, there are two ways that an insurance company will get the money back from you.
Sometimes, an insurance company might ask you to pay them back with a lump sum for overpayment. This may happen if you get a lump sum payment of “back pay” from the Social Security Administration when they finally approve your disability claim.
The more common method insurance companies use in overpayment cases is to reduce your monthly benefits until you’ve paid them back. This approach puts less financial strain on you while still making things right with the insurance company, which is why it’s the more popular option.
What To Do If an Insurer Demands You Pay Them Back for an Overpayment
If your long-term disability insurance provider asks you to repay an overpayment, follow these steps:
- Review the Overpayment Notice: Carefully read the notice from your insurer to understand the reason for the overpayment and the amount they claim you owe.
- Check the Calculations: Don’t assume the insurance company’s calculations are correct. Review your payment records and compare them with the insurer’s figures to identify discrepancies.
- Gather Documentation: Collect all relevant documents, including your benefit statements, pay stubs, and correspondence with the insurance company. This documentation will be crucial in verifying the overpayment claim.
- Contact the Insurer: Contact your insurance provider to request a detailed explanation of the overpayment. Ask for a breakdown of how they calculated the amount and clarify any points of confusion.
- Consult a Lawyer: Speak to a lawyer immediately. An experienced long-term disability attorney can explain your rights, negotiate with the insurer, and potentially dispute the overpayment claim.
- Avoid Immediate Repayment: Do not rush to repay the demanded amount without proper verification and legal advice. Incorrect repayment can lead to financial strain and may not resolve the issue accurately.
Contact a Seasoned LTD Attorney from Capitan Law
Our Philadelphia long-term disability insurance attorneys have helped many people like you resolve overpayment issues with long-term disability claims. Trust Capitan Law to handle your claim accurately and quickly while protecting your rights. Call (267) 419-7888 now or complete our contact form to schedule a free consultation.
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