The carrier wants to offset my employee's LTD with their SSDI. What does that mean?
Group LTD policies almost universally include "other income offset" provisions. When an LTD claimant qualifies for Social Security Disability Insurance (SSDI), the LTD benefit is reduced by the SSDI amount — the carrier essentially fills the gap above SSDI rather than paying full benefits on top. This is normal and disclosed in the policy. The carrier typically requires LTD claimants to apply for SSDI and may help them through the application process. If SSDI is approved retroactively (common — SSDI takes 12–24 months), the LTD claimant must repay the carrier for the SSDI-equivalent amounts already paid, then go to the reduced ongoing benefit.
- Category
- Employee Benefits
- Audience
- For existing clients
- Topic
- Employee Benefits
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