What Your Long Term Disability Insurer Doesn't Want You to Know

If you pay for a long term disability policy, or receive it as an employee benefit, and you pay Social Security taxes I bet you think that if you become disabled you can collect both private disability plus Social Security disability, right?  Well, in most cases you are WRONG!  What most people do not know is that long term disability insurers can make you apply for Social Security disability and, if you get it, reduce their payment to you by whatever amount Social Security pays you.  Is this fair?  Of course not.  You have paid premiums for the private policy and taxes for the Social Security benefit.  I was pleased to see that the state of Connecticut is trying to do something about this injustice.  Connecticut State Senator Edith Prague and Attorney General Richard Blumenthal have joined forces to support legislation that would correct this problem.  According to Senator Prague, “This legislation amounts to a simpl[e] act of fairness because residents routinely pay into both programs through insurance premiums and payroll deductions and should receive benefits from both programs if and when needed.”  I couldn't agree more.  Many of my disability clients have been sadly surprised to learn that they cannot collect the full amount of disability payments they paid for in addition to their Social Security disability.  It would be great if the State of Maryland followed Connecticut's example.