Social Security Disability Insurance Deductions from Long Term Plans

On June 18th, 2012, in Renfro v. The Funky Door Long Term Disability Plan, (The US Court of Appeals – Ninth Circuit, No. 11-15301), held that an abuse of discretion does not occur by an insurance plan administrator when Social Security Disability Insurance benefits are deducted from benefits under long term disability plans.

In Renfro, the plaintiff worked two jobs and received insurance from both employers. Both insurance plans were covered by Unum. The plaintiff filed a disability claim which was approved by Unum. The plaintiff was approved for social security disability insurance (SSDI) benefits. Unum began deducting the plaintiffs SSDI from the disability insurance plaintiff received from both employers. The district court granted summary judgment in favor of Unum, citing that Unum did not abuse their discretion.

The Ninth Circuit affirmed the district court's decision. The court cited to law that stated if discretionary authority is given to the plan administrator, the court may only overturn a decision if the findings the administrator relied on were clearly erroneous. The court pointed out that Unum did not abuse their discretion. The court noted that Unum had carefully considered the plans and was cautious in determining what to do with the issue at hand.

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