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Long Term Disability Plan Allowed To Offset Benefits Paid By Work Loss Benefits Paid By First Party Carrier

Posted On Behalf of Schmidt Kramer Injury Lawyers on May 14, 2012 in General

On March 5, 2009 in George v. CIGNA Group Insurance Company, Judge Vanaskie in the Middle District of Pennsylvania granted the Motion for Summary Judgment of Life Insurance Company of North America (LINA) which sought to offset from its monthly disability payments the amount in wage loss benefits an insured was receiving under its plan after being insured in a non-work related car accident. Joseph George (George) was injured in a car accident in January of 2006 and was covered under a long term disability policy which provided a maximum benefit of $5000 per month. He also had wage loss benefits with his personal motor vehicle insurance carrier Liberty Mutual with a maximum of $1500 per month up to a total maximum of $25,000. He was to receive 60% of his monthly wages (which were $4,705.65) in long term disability which amounted to $2,823. He also received the $1500 in work loss benefits under the Liberty policy.
The disability plan then sought to offset $1500 from the $2,823 it was paying because it alleged the disability plan language provided for an offset of “other income benefits” that an insured is entitled to receive as a result of the accident. The Court finds that the wage loss benefits are within the “other income benefits” identified by the plan and allows the offset to occur. Thus, George will now receive $1,323 in long term disability benefits. Of note, the decision in this case is mainly the result of the long term disability policy language. A different policy language may have allowed for a different result of even an offset off of the maximum amount possible payable per month which was $5,000 instead of the $2,823. This is noted by the Court. Scott B. Cooperscooper@Schmidt Kramer.com717-232-6300