Most group long term disability plans require claimants to apply for social security disability benefits. In fact, administrators often offer to assist claimants by referring them to a company that will represent them. They do this because SSDI benefits are typically included as a ‘deductible source of income’ under most plans, meaning that administrators can reduce the amount of any monthly benefit they pay by the amount of any SSDI benefit. The administrator thus has an incentive to help claimants obtain SSDI benefits. This does not mean, however, that the administrator will respect the Social Security Administration’s decision. Administrators make their own determination of disability based on the definition of disability in the plan, and it is not uncommon for them to deny a claim even though the claimant has been awarded SSDI benefits. Under ERISA law, however, they must at least consider an award of benefits in making its own decision. Needless to say, the interplay of ERISA and Social Security benefits makes it crucial for a claimant to have an advocate who understands ERISA assisting with the SSDI process.
A claimant should be wary of having the help of a company referred by the administrator. A quick and decisive award of SSDI benefits is a powerful factor in determining disability that an administrator cannot ignore and would prefer not to have to address, so a company that gets its business from the administrator could keep its referral source happy by manipulating when and on what basis the claimant wins an award.