If a serious illness, physical injury, or mental condition prevents you from earning a living for an extended period of time, long-term disability benefits may provide you with a percentage of your income to help you make ends meet while you’re unable to work.
However, in certain scenarios, you may be required to pay some of this money back to your insurance company. This can occur if you receive long-term disability benefits from both an individual or group insurance policy and the Canada Pension Plan (CPP).
Understanding Offset Provisions in Long-Term Disability Insurance Plans
Most insurance plans that provide eligible policyholders with long-term disability benefits include offset provisions. These provisions protect the insurance company from paying more than what is required of them, should the recipient also receive benefits from the CPP.
With these offset provisions, private insurance companies may only be required to pay eligible policyholders the amount of compensation not covered by their CPP benefits. Therefore, if you receive more money from your insurance plan than what they owed you, they may require you to pay that money back.
In situations where a recipient begins receiving CPP payments after having claimed long-term disability benefits from their insurance provider for a period of time, they may be required to retroactively reimburse the insurance company for past overage payments now offset by CPP payments.
On average, it can take up to 120 days for CPP to assess your application for benefits. As CPP verifies your claim over this period of time, your private insurance provider may send you the full amount of benefits for which you are eligible. But if your plan includes an offset provision, you may be required to reimburse your insurance company for any overpaid amounts once you start receiving payments from CPP.
You may also be required to repay long-term disability benefits if your medical condition improves, but you fail to notify your insurance provider and continue collecting benefits. Any benefits collected erroneously once you became able to return to the workplace may also need to be repaid.
Challenging Overpaid Benefits
If you believe you should not be required to repay a portion of your long-term disability payments, a long-term disability claims lawyer may be able to help explain legal options that may be available to you. In certain situations, a lawyer may be able to help you appeal the insurance company’s decision.
If you lose your appeal, a long-term disability claims lawyer may be able to negotiate with your insurance company to devise a payment plan, so you do not have to return the overpaid funds in one lump sum.
Contact Preszler Injury Lawyers Today
If you have questions about your long-term disability benefits payments, Preszler Injury Lawyers may be able to provide useful assistance and advice. To discuss the circumstances of your benefit claims, call Preszler Injury Lawyers today at (416) 364-2000 for a free, initial consultation.