Employees and executives in Chicago may still be experiencing frustration with ERISA long-term disability plan administrators when the worker qualifies for Social Security Disability Insurance benefits, yet is denied long-term disability benefits by his or her employer's disability plan administrator, or has the administrator terminate those benefits because the administrator claims the worker no longer qualifies for benefits under the plan's definition of "disability."
Many, if not all, plans provide that any benefits the plan pays the employee will be offset by any benefits received for Social Security Disability Insurance benefits. Some plans encourage, or even require, that the employee apply for such benefits. You may be troubled to learn that some plans then would not give consideration to the award of disability benefits to the employee by the Social Security Administration when reviewing a claim for benefits from the plan. The Supreme Court expressed such "serious concerns" in Metropolitan Life Insurance Co. v. Glenn, 554 U.S. 105, 118 (2008). It nevertheless still may occur in a variety of ways.
In one recent case, a self-funded long-term disability plan maintained by Qwest Communications Company actually required for an employee claiming benefits under the plan to apply for Social Security Disability Insurance Benefits. Torrey v. Qwest Communications Co., 2011 U.S. Dist. LEXIS 25587, at *3 (D. Colo. Feb. 28, 2011). The plan would then even hire a lawyer to apply for the benefits for the employee. Any retroactive award of benefits by Social Security for a time period that the plan had paid disability benefits to the employee would go straight to the plan, so that the employee recovered nothing from the Social Security Administration's award. In addition, the terms of the plan required an employee claiming benefits to also grant the plan authorization to automatically obtain any records from the proceeding before the Social Security Administration.
When the Qwest Disability Plan terminated Mr. Torrey's benefit payments, it did not give consideration to the fact that Mr. Torrey had been awarded benefits from Social Security, and did not even request the records from the Social Security Administration. The Court held in this case that the administrator failed to make adequate findings or failed to adequately explain grounds for the decision.
If you have questions about how a claim for Social Security Disability Insurance benefits will affect a claim for disability benefits under your employer's disability plan, consult an ERISA lawyer.