Social Security Disability recipients will receive an 3.2% increase due to a COLA (Cost of Living Adjustment) in January 2024. After last year's increase of 8.7% - the largest COLA provided by the Social Security Administration since 1981 - this increase may be a bit disappointing.
You may wonder how this cost of living adjustment will affect your long term disability benefits. The short answer is that it probably won't.
Social Security Disability Cost of Living Increases Are Not Usually Included in Long Term Disability Offset Provisions
Cost of Living Adjustments ("COLAs") are not typically included in offset calculation provisions in long term disability policies. Make sure to check the provisions of your policy to be sure.
Usually, long term disability policies only offset the amount of the initial Social Security Disability award. This language will be included in a section entitled "other income benefits" or "offsets." Because SSD COLAs are not usually included in these provisions, each year's Social Security Disability COLA will likely not reduce your long term disability benefits.
Offset provisions that include a reduction for Social Security Disability benefits are typically included in long term disability policies that are provided by your employer or another group. If your long term disability policy contains this language, and if you are receiving both Long Term Disability (LTD) benefits and Social Security Disability (SSD) benefits, your LTD benefits will be offset by the amount of SSD benefits you receive.
For example, if you are entitled to receive $2,000 per month in LTD benefits and $1,000 per month in SSD benefits, your LTD monthly benefit would be reduced to $1,000.
But Social Security Disability cost of living adjustments are not typically included in offset calculations. In some states, including California, long term disability insurance companies are barred completely from reducing your long term disability benefit on account of an SSD COLA.
If you are receiving $1,000 per month in SSD benefits, the January 2024 COLA will increase your SSD benefit to $1,032 per month. Your LTD monthly benefit will likely not change. So using the prior example, if your LTD benefit was $1,000 after the SSD offset before the COLA, it will remain at $1,000 per month.
Of course, each long term disability policy is different. And some policies do include COLAs in the offset calculation. So it's always best to check the provisions of your particular policy. If you have questions about how your COLA will affect your long term disability benefits, contact a long term disability attorney.
The Maddox Firm Can Help You Determine Whether the SSD COLA Will Reduce Your LTD Benefits
Provisions of your long term disability policy regarding offsets for Social Security Disability Benefits, like any other provision, may be tricky to decipher. Of course, your insurance company may not make the answer easy.
Whether you have already been approved for long term disability benefits, you've been denied, or you are thinking about filing a claim, the Maddox Firm can help. Whatever your situation, the experienced team at The Maddox Firm can help you handle your long term disability claim the right way.
You should always consult with an experienced attorney before filing your long term disability claim. If you have already received a denial, you should consult with an experienced attorney before filing an appeal. The team at The Maddox Firm will look over your insurance policy, correspondence from your insurance company, medical records, and any other relevant documentation in order to give you personalized guidance on how we can help you win your long term disability claim.
The Maddox Firm has helped hundreds of clients receive disability benefits, including residual disability. We understand how to prove to your insurance company that you have suffered significant income loss due to your condition.
How Can The Maddox Firm Help Me With My Long Term Disability Claim?
Here are some of the ways The Maddox Firm can help you:
We examine your the offset provisions in your long term disability policy: Our experienced team can thoroughly examine your disability insurance policy to understand its terms, conditions, and definitions related to offsets. This allows us to determine whether you meet the criteria for these benefits, which reductions in your benefits are proper, and which are improper.
We help you calculate your disability benefits: Determining the amount of your long term disability benefits involves calculating your pre-disability income with your post-disability income along with any offsets. Your insurance company may dispute the amount of benefits you are entitled to. The Maddox Firm will review your financial documentation and statements to calculate your benefit amount and provide our analysis to your insurance company to ensure they don’t undercut what you are owed.
We help you complete your claim forms: Your insurance company will require claimant forms to be submitted when filing your claim. The Maddox Firm can help you complete the claim forms accurately and ensure that all required information is included while meeting your insurance company’s deadlines.
We obtain, review, and submit your medical evidence: The Maddox Firm works with your healthcare providers to obtain and compile the necessary medical evidence to substantiate your claim. This includes medical records, treatment plans, and expert opinions. Your insurance company will likely require your providers to complete questionnaires. The Maddox Firm ensures that your doctor completes the form accurately and supplements the form with an expert opinion letter further detailing your condition and symptoms.
We can file an appeal or help you sue your insurance company: If your claim is denied, The Maddox Firm can guide you through the administrative appeals process. We will help you prepare a strong appeal, gather additional evidence, and present your case effectively to your insurance company. In cases where disputes cannot be resolved through an appeal, we can represent you in court and file a lawsuit against your insurance company on your behalf.
When dealing with a offsets to a long term disability insurance claim, The Maddox Firm can provide guidance to help you understand your eligibility for benefits and how best to protect your interests. Our knowledgeable team will look over your insurance policy, correspondence from your insurance company, medical records, and any other relevant documentation in order to give you personalized guidance on how we can help you.
Contact us to help you file your claim, appeal, or litigation the right way.