If you become disabled, you may be covered by a long-term disability (LTD) insurance plan. Long-term disability is an insurance policy that protects individuals from loss of income when they are unable to work due to an injury or an illness. Sometimes described as “income replacement,” long-term disability typically goes into effect after short-term disability has been exhausted.
Long-term disability is typically an employer-sponsored insurance, although individuals can also purchase personal plans. Long-term disability plans ensure that a disabled person receives a percentage of their salary, usually 50-70%, should they become unable to work.
Social Security Disability Insurance (SSDI) is a government-run insurance program. All individuals who work pay into the SSDI program through federal taxes. If you meet the requirements set forth by the Social Security Administration (SSA) for disability benefits, you could qualify for SSDI benefits.
While both long-term disability insurance and SSDI are essentially meant to help individuals who have an ongoing or permanent disability, the requirements for SSDI are much more stringent. As such, some people who have been approved for LTD through their employer-sponsored plan, may not be approved for SSDI benefits.
Can I Apply for Social Security Disability if I Already Receive Long-Term Disability from My Employer?
Not only are you allowed to apply for Social Security disability benefits when you are on long-term disability, but most policies require it. Depending on your LTD policy, you may need to begin the SSDI application process within a specific timeframe, typically a year.
The reason that most LTD insurance companies require individuals to apply for SSDI is that most policies have an offset provision clause. Simply put, if you earn an award from Social Security, your private long-term insurance claim payment will be reduced and covered by Social Security payments. For example, if you were receiving $2000 a month from your LTD insurance provider, and the SSA determines that you are disabled and provides you with $1000 a month, your LTD company will reduce your payments to $1000 a month to offset the amount you now receive from SSDI.
I Received a Substantial Award from the SSA, but my LTD Company Wants It. Why?
The Social Security Disability application process can take a long time to complete. However, you may be eligible for past due benefits, or back pay, from the date that it is determined that you became disabled. For example, if you are approved for disability benefits in September, but the SSA determines that you became disabled when you first applied in January, you may be eligible for three months of back pay, after the five-month waiting period.
However, it’s highly likely that your long-term disability company will expect to receive your Social Security retroactive pay. After all, had you been receiving SSDI all along, your LTD company would have offset that amount of payment.
Should I Work with A Disability Attorney If I Am Receiving Long-term Disability?
The Social Security disability application process is complicated enough. However, if you are already receiving LTD, it becomes even more complication. An experienced Social Security Attorney can assist you in handling your LTD claim and your SSDI claim, helping you to understand your coverage and responsibilities.
Keep in mind that there is no risk involved in working with a disability attorney or advocate. After all, your attorney does not get paid unless you win your claim.