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IINNSSIIDDEEPage 6COBRACoverage- TheLeast YouNeed to Know

Page 8A FavorableSocial SecurityDecision WillHelp a Long-TermDisabilityInsuranceClaim

0ImpendingDisabilityOnslaught and itsConsequences

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A Publication of the American Association for Justice Vol. 9, No. 2, Spring 2007

Social Security Disability Law

Section ConnectionWhere Resources Come Together

A Publication of the American Association for Justice

R. SCOTT WILSON

TTHHEE EEDDIITTOORR’’SS MMEESSSSAAGGEE

Social security practice is fair-ly specialized, and for many

practitioners, social security dis-ability may make up a large pro-portion or even all of their prac-tice. However, disabled individ-uals often face other legal issuesas well.

If injured on the job, theymight have a workers’ compen-sation claim. Even if not injured,their employer might state thatthe Employee Retirement

Income Security Act or, ERISA,governed long-term disabilityinsurance. And, as so many peo-ple obtain their health insurancethrough work, while disabilityclaimants are almost by defini-tion not working, COBRA cov-erage may be of vital impor-tance.

These other legal issues mayinteract with the social securityclaim, sometimes in surprisingways. In this issue, we attempt

to provide some background onCOBRA, workers’ compensa-tion benefit offsets, and using afavorable social security deci-sion to influence an LTD insur-ance claim.

As always, if there is an arti-cle you would like to see,whether written yourself or sim-ply an idea you would like tosee someone else address, pleaselet me know. See you inChicago.

The Other Issues in Social Security Practice

Workers’ Compensation Attorneys, Be Aware of the Social Security Offset

By Eric Buchanan, Chattanooga, Tenn.

If an injured worker is award-ed both Social Security dis-

ability benefits and workers’compensation benefits, theworkers’ Social Security bene-fits may be greatly reduced bythe amount of workers’ com-pensation benefits received. Aworkers’ compensation attor-ney can save his client a signif-icant amount of money inSocial Security benefits byensuring that appropriate lan-guage is included in a workers’compensation settlement. Thesettlement should stipulatethat the funds will compensate

the worker over the remainderof his or her life expectancy.

Put another way, if an attor-ney fails to include the SocialSecurity language in a work-ers’ compensation settlement,the injured worker will likelylose a significant amount of hisSocial Security benefits, cost-ing the client money and put-ting the workers’ compensa-tion attorney at great risk ofmalpractice exposure.

This article will explain how theworkers’ compensation/SocialSecurity disability offset works,what an attorney must do to

ensure that the language is correct,and will identify some pitfalls ofwhich attorneys should be aware.

The critical point to remem-ber is that the Social SecurityAdministration will recognizethe offset avoidance languageonly if it is in the original set-tlement order. Once yourclient’s workers’ compensationcase is settled and the clientapplies for Social Security dis-ability, if the language is notalready in the workers’ com-pensation settlement, it is too

continued on Page 2

Vol. 9, No. 2, Spring 2007

2006-2007 SECTION OFFICERS

ChairDavid A. Bryant

55 West Monroe Street Suite 2440Chicago, IL 60603

Phone: 312/372-5200Fax: 312/372-2778

[email protected]

Chair-ElectEric L. Buchanan

Eric Buchanan & Associates, PLLC414 McCallie Ave.

Chattanooga, TN 37402Phone: 423/634-2506

Fax: 423/[email protected]

Vice ChairPatricia M. Franklin

81 Halsey St. P.O. Box 32207

Newark, NJ 07102Phone: 973/642-4206

Fax: 973/[email protected]

Newsletter EditorR. Scott Wilson

Eric Buchanan & Assoc, PLLC414 McCallie Ave.

Chattanooga, TN 37402Phone: 423/634-2506

[email protected]

Immediate Past ChairDouglas K. W. LandauAbrams Landau Ltd.

797 Center St.Herndon, VA 20170

Phone: 703/796-9555Fax: 703/796-9210

[email protected]://landaulawshop.com

AAJ Sections Staff

© 2007, American Association for Justice formerly Association of Trial Lawyers of America

All rights reserved

Christine HinesAssociate Director,

Legal Content

Elliott BrownPublications Coordinator

Stuart BanashekManager

Narecita IbanezLitigation Groups Coordinator

Edward ChesterAdministrative Assistant

[email protected]/SectionsThis Section Newsletter is intended to be a forum of opinion and information pertaining to the

interest of Section members. Unless specifically stated otherwise, its contents reflect the viewsof authors only, and should not be interpreted as a statement of the position or policies of AAJor the Section itself.

Published material remains the property of AAJ. No material may be reproduced orused out of context without prior approval of, and proper credit to, this SectionNewsletter.

Contacting AAJAAJ General Numbers

800/424-2725 or 202/965-3500

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Meetings & Conventionsext. 613


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late. Attorneys representing injuredworkers in workers’ compensationcases should include languageaddressing the Social Security offsetin every settlement.

THE OFFSET LAWFederal law requires that individu-

als who receive both workers’ com-pensation and Social Security disabil-ity benefits are unable to receive atotal amount of benefits greater than80 percent of the workers’ pre-injuryincome.1 The Social SecurityAdministration uses a formula todetermine the maximum total bene-fits, from both programs, that aclaimant can receive. Then the agencyreduces the Social Security disabilitybenefits to stay below that figure.

To calculate the total amount ofbenefits that can be received fromboth programs, the Social SecurityAdministration will:

1) Determine the 80 percent

maximum allowance, afterwhich they will2) Convert it to a maximum totalcombined monthly benefit.2

3) Calculate the amount of work-ers’ compensation benefitsreceived in temporary checksand determine the amountreceived each month.3

4) Subtract the workers’ com-pensation monthly amount fromthe 80 percent maximum month-ly amount. The difference is themaximum that Social Securitywill pay each month, even if thedisabled individual’s normalSocial Security disability benefitwould be much higher.4

In the case of large monthly work-ers’ compensation benefits, or lowpast wages, the reduction may betotal, therefore, the individual maynot be entitled to Social Security ben-efits at all during the time the individ-

Social Security Offset cont. from Page 1

continued on Page 3

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Social Security Disability Law Section


ual receives periodic workers’ com-pensation benefits.

When a lump sum is awarded in aworkers’ compensation case, theSocial Security Administration doesnot have a “monthly” amount to useto calculate the offset, but that doesnot mean that the offset will end.Instead, by default, they treat thelump sum as if the temporary checkshave continued. The purpose of theSocial Security language in the work-ers’ compensation order is to avoidthe default.

Without the Social Security lan-guage in the workers’ compensationorder, Social Security takes the settle-ment amount, exclusive of attorney’sfees, medical expenses, and other caseexpenses, and divides by the monthlyamount of workers’ compensationbenefits that the disabled worker wasreceiving in temporary periodic pay-ments. The calculation equals thenumber of months the full offset willcontinue. The offset then will remainthe same even though the individualis no longer getting temporary checksfrom workers’ compensation.

For example, if your client received$400 per week in temporary workers’compensation checks, then obtained alump sum settlement of $40,000 (afterattorney’s fees and expenses), the off-set would continue for 100 weeksafter the settlement.5

RECOMMENDED LANGUAGE FORTHE ORDER

To keep the Social SecurityAdministration from continuing thesame offset, the law allows the work-ers’ compensation settlement to con-tain a “life expectancy” clause. Thisclause indicates that the lump sum isnot just a continuation of the tempo-rary checks commuted to one pay-ment. Instead, the lump sum is a set-tlement of a disputed case and is tocompensate the worker for the life-time of future impairment.

The clause states that the settle-ment is the equivalent of much small-er monthly payments over the life-

time of the worker. This language ispermitted in the settlement by statelaw in some states. For example, inTennessee, TCA §50-6-207 (6) states:

(6) For social security purposesonly, as permitted by federal lawor regulation, in an award ofcompensation as a lump sum ora partial lump sum under thischapter for permanent partial orpermanent total disability, thecourt may make a finding of factthat the payment represents apayment to the individual to bedistributed over the individual’slifetime based upon lifeexpectancy as determined frommortality tables from TennesseeCode Annotated.The actual language that should be

included may not be set out by statelaw, but the following language hasbeen used successfully in many cases:

After payment of the attorney’sfees and costs, the claimant willreceive the net amount of$____________. The mortalitytables set forth in Table VI6 of theTennessee Code Annotated indi-cates that because the Plaintiff isage ______, Plaintiff has a lifeexpectancy of ________ years or______ months. The amortizedmonthly benefit received by the

Claimant is $_____________divided by _________ months or$_____________ per month andrepresents a future incomereplacement. This paragraph isintended for Federal SocialSecurity purposes only and notfor any other purpose, includingbut not limited to, disabilityretirement benefits from theTennessee ConsolidatedRetirement System, pursuant toTennessee Code AnnotatedSection 50- 6-207, as amended byPublic Chapter 919, effectiveJuly 1, 1996.

This language has no effect on theamount of the workers’ compensationsettlement itself. It only preservesSocial Security benefits to the greatestextent possible. Including the lan-guage may reduce, or sometimeseliminate, the offset.

The calculation over the worker’slifetime usually results in an equiva-lent monthly rate of workers’ com-pensation payments that is muchsmaller than the temporary checks theworker received. This allows theSocial Security Administration to sub-tract a much lower amount of month-ly workers’ compensation benefitsfrom the 80 percent maximum, thusallowing for greater Social Securitydisability benefits. The Third Circuitin Sciarotta v. Bowen, 837 F.2d 135 (3dCir.1989), first approved this calcula-tion method, and the Social SecurityAdministration eventually adoptedit.7

The importance of the lifeexpectancy language in the workers’compensation order is that it gives theSocial Security Administration a basisto calculate how the lump sum is to bereceived. By giving the Social SecurityAdministration a new monthly figurewith the life expectancy language,they will not use the default, which isto treat the lump sum as if temporaryperiodic workers’ compensation ben-efits had continued.


continued on Page 4

Eric Buchanan



PITFALLS AND EXCEPTIONS1) Actual periodic payments will

trump the language. In any settlementorder in which the worker receivesthe benefits in periodic payments,instead of a lump sum payment,Social Security will often ignore thelife expectancy clause, at least for thetime periodic payments are made.

Social Security looks first at theactual monthly benefits that the work-er receives, and calculates an equiva-lent monthly rate only when theworker gets a lump sum. In otherwords, the life expectancy languagewill not be considered during anytime that the client collects temporarychecks.

If a lump sum is paid out over timein some form of a structured settle-ment, the settlement language mustbe clearly state that the settlement isfor a lump sum, and that the pay-ments overtime are a structured pay-out of the lump sum, and are not con-tinued periodic workers’ compensa-tion benefits.

2) The Social Security Administrationwill only recognize the language in anoriginal order. In the past, it was com-mon for workers’ compensation attor-

neys to leave the language out of asettlement unless the injured workerplanned to apply or had applied forSocial Security disability. If theinjured worker later applied for SocialSecurity disability benefits, an attor-ney could request an amendment ofthe workers’ compensation order to

include the language. This is nolonger acceptable!

Currently, Social Security will rec-ognize the life expectancy language ifit is found in the original settlement.Under Social Security policy, theagency will refuse to recognize thelanguage if it is only found in anamendment to the settlement, i.e. inan agreed order to modify the decree.On October 3, 1997, the commissionerissued a ruling, SSR 97-3, 1997 WL620432, stating that the defendantwould not recognize the life-expectancy language if it were con-

tained in an amended workers’ com-pensation settlement.

3) It does not matter if the workers’compensation injury is related to the per-son’s disability. The Social Securityrules do not differentiate betweenwork-related and non-work-relatedinjuries, but rather considers all

impairments in combination. The off-set rules set the maximum combinedbenefits at 80 percent no matter whatinjury the workers’ compensationbenefits covered.

For that reason, even if an injuredworker gets workers’ compensationbenefits for a relatively minor injury –one that could never possibly cause aperson to be totally disabled – the lan-guage should still be included in thesettlement. For example, a workerwho settles a carpel tunnel workers’


“The language has little or no effect on theemployer or workers’ compensation carrier, but its absence can cost the injured worker

thousands in Social Security benefits.”

continued on Page 5



compensation case for $20,000 couldsuffer a heart attack or be involved ana catastrophic auto accident, andbecome totally disabled. If the lan-guage is not in the workers’ compen-sation settlement order, then shecould still risk losing benefits.

In conclusion, Social Security lan-guage should always be included in aworkers’ compensation settlementorder. The language has little or noeffect on the employer or workers’compensation carrier, but its absencecan cost the injured worker thousandsin Social Security benefits.

The Social Security policy, to refuseto recognize an amended order, and toonly recognize the language in anoriginal order, was implemented fiveyears ago. Attorneys who representinjured workers in workers’ compen-sation cases can cost their client thou-sands of dollars and put themselves atrisk of malpractice if they fail to setthe language in the settlement.

Notes:1. 42 U.S.C. § 424a. Reduction of disability bene-fits. See also 20 C.F.R. §404.408.2. Social Security uses several formulas to deter-mine the past wage. The most common, called the“high five” approach, uses the last five years beforethe year of injury, plus the year of injury itself; thehighest year is used in the formula - the maximumbenefit will be 80 percent of the highest year. Thehighest year’s income, divided by 12 and multi-plied by .8, is the maximum monthly benefit.Social Security’s alternative method is to look forthe highest five consecutive years, add them togeth-er and divide by 60 to determine the monthlyincome amount. This amount times .8 is the maxi-mum allowable combined benefit. 3. If the injured worker received weekly checks,that amount is multiplied by 52 and divided by 12;bi-weekly checks are multiplied by 26 and dividedby 12. Since Social Security benefits are paidmonthly, all workers’ compensation benefits areconverted into an equivalent monthly rate. 4. In Tennessee, to comply with the federal cap, thedisabled person’s Social Security benefits arereduced. Tennessee is a “traditional” offset state.Other states, such as Florida and Ohio are “reverse”offset states, in which the full Social Security bene-fits are paid, and the employer/workers’ compensa-tion insurance carrier is allowed to reduce theworkers’ compensation benefits paid to keep theinjured worker under the cap. 5. Because the Social Security Administration pays

monthly benefits, they would convert 100 weeks byinto months (by dividing by 52 weeks times 12months) so that the offset would be applied over 23months. 6. There is more than one life-expectancy chartfound in the TCA Appendix. You should use theone that gives your client the longest life-expectan-cy, so that the monthly benefits will be the lowestpossible. The Social Security Administration has nopolicy requiring use of any particular chart, so longthe language is in an approved order.7. Recognizing pro-ration over a claimant’s lifetimeis acknowledged implicitly in the Social SecurityAct and explicitly in the Agency’s ProgramOperations Manual System. 42 U.S.C. § 424a(b);POMS § DI 52001.555.8. In 1997, the Social Security Commissioner origi-nally proposed a change in the regulations thatwould not recognize pro-ration language in work-ers’ compensation orders at all. 62 FR 46682,September 4, 1997. After receiving over 1,400comments during the notice-and-comment period,the commissioner withdrew the proposed regulation

on February 11, 1999. 64 FR 6824.

© 2002 Eric Buchanan. Eric L. Buchanan ischair-elect of the Social Security DisabilityLaw Section and chair of the Health Care andDisability Litigation Group. Eric Buchanan& Associates,, PLLC, 414 McCallie Ave.,Chattanooga, TN 37402, T: 423/634-2506,[email protected].




COBRA Coverage - The Least You Need to Know

By David A. Bryant, Chicago, Ill.

Editor’s Note: While many Americansreceive their health insurance coverage as anemployee benefit, disability, by definition,means being unable to work. The disabilityitself can make it financially difficult or impos-sible for our clients to get treatment they needto improve their condition. It also places ourclients in an awkward Catch-22: inability towork deprives them of the insurance they needto obtain the medical documentation thatforms the bulk of the evidence to establishinability to work. With thanks to the SocialSecurity Disability Law Section chair, DavidBryant, here is the “least you need to know”about COBRA coverage.

The Consolidated Omnibus BudgetAmendment Act of 1985 (COBRA) addedthe Employee Retirement Income SecurityAct, or ERISA Title I, Part 6, requiring thatthe sponsor of a group health plan makecontinuation coverage available toemployees, spouses, ex-spouses, depend-ents, and others for periods of 18 to 36months following an event that might oth-erwise result in loss of coverage.

COBRA does not require that anemployer provide or offer healthcare cov-erage to its employees, but COBRA man-dates that any employer that offers health-care benefits must continue coverage inprescribed circumstances. Additionally,COBRA contains proscribed election peri-ods and notice requirements, including arequirement that employers notify theplan administrator of certain qualifyingevents within 30 days (employment termi-nation, etc.), and that each coveredemployee notify the administrator ofdivorce or separation or a dependent childceasing to be a dependent under the termsof the plan.

COBRA covers healthcare plans onlyand does not cover company-provideddisability plans or company-sponsoredlife insurance plans. Additionally, cover-age may not be conditioned upon evi-dence of insurability. However, theemployer is not required to provide cover-

age at the same cost as it was offered to thebeneficiary while employed.

In most cases, the employer willrequire the beneficiary to pay the entirecost of the monthly premium and COBRAallows employers to charge 102 percent ofthe premium, the added 2 percent as ahandling fee. Because of this cost shifting,beneficiaries are often shocked to find thatthe health benefits they received as anemployee that were once free or providedat greatly reduced cost may now cost hun-dreds of dollars under COBRA.

COBRA is triggered by “qualifyingevents” that would otherwise result in aloss of coverage. A qualifying event meansthat with respect to any covered employ-ee, any of the following events wouldresult in the loss of coverage of a qualifiedbeneficiary:

• Death of the employee• Termination of employment(other than by reason of gross mis-conduct)• Divorce or legal separation of theemployee• Becoming entitled to benefitsunder title XVIII of the SocialSecurity Act• Dependent child ceasing to be adependent child under the require-ments of the plan (age, etc.)• Employer’s bankruptcy

The duration of coverage varies withthe qualifying event, but the maximumrequired period of coverage underCOBRA is generally 18 months. In the casewhere a beneficiary becomes entitled toMedicare benefits under Title XVIII ofSocial Security Act, the period of coverageunder COBRA is extended to 36 months.

If a qualified beneficiary is determinedto have been disabled under Title II or TitleXVI of the Social Security Act at any timeduring the first 60 days of continuationcoverage under COBRA, then coverage isextended to 29 months but only if the ben-eficiary provided notice before the end of

the 18-month period.With respect to this last point, it is

important to remember that it is not suffi-cient for Social Security to later find theclaimant’s disability began within the 18month period. Despite the lengthy delaysinherent in the Social Security adjudica-tion process, the favorable decision mustbe made, and notice must be providedwithin the 18-month period.

It may be advisable, therefore, torequest the ALJ make a decision on therecord before a hearing is scheduled,advising him that the claimant’s COBRAcoverage is about to expire unless a favor-able decision is made soon. Particularlywith respect to a claimant with a medicalcondition that is life-threatening, or atleast apt to get significantly worse withoutregular treatment, the approachingCOBRA coverage expiration date may besufficient to prompt a favorable decisionon the record or an expedited hearingdate.

This is an excerpt from the author’s paper pre-viously presented at AAJ’s 2006 AnnualConvention in Seattle. The complete paper isavailable to AAJ plaintiff lawyers through theAAJ Exchange at www.justice.org/exchange orby calling (800) 344-3023.

David A. Bryant is chair of the Social SecurityDisability Law Section. David A. Bryant,Daley DeBofsky & Bryant, 55 W. Monroe, Ste.2440 Chicago, IL 60603, T: 312/372-5200,[email protected].

David A. Bryant

Program Theme: ERISA Litigation—It’s NeverGoing Away

Learning objectives:1. Avoiding ERISA traps2. ERISA litigation is here to stay, so learn to deal with it3. ERISA law update4. Know the basics of Social Security claims; appeal deadlines and standard of proof5. Fee agreements, EAJA fees, 406b6. Social Security coordination with ERISA claims

8:15 am Opening Remarks/Section Elections

8:30 am Health Claims—Helping Your Client by Assuring Medical Providers Are Paid and So Are YouBrian S. King, UT

9:00 am ERISA Litigation Is Here to Stay, So Learn to Deal with ItJonathan Marc Feigenbaum, MA

9:30 am ERISA Updates—The Year in ReviewMala M. Rafik, MA

10:00 am Know the Basics of Social Security Claims; Appeal Deadlines and Standard of ProofSandra Dye, IL

10:30 am Fee Agreements, EAJA Fees, 406bEvan A. Zagoria, MI

11:00 am Social Security Coordination with ERISA ClaimsScott B. Elkind, MD

11:30 am Adjourn

**This agenda is current as of June 1, 2007. Somespeakers may be unable to appear. Please visit:http://www.justice.org/convention/IL07/education.aspx forupdated information.



HEALTH CARE AND DISABILITY LITIGATION GROUPAND

SOCIAL SECURITY DISABILITY LAW SECTION

IN CHICAGO**Continuing Legal Education Program

Tuesday, July 17, 2007Columbus C-D (East Tower, Gold Level,

Hyatt Regency Chicago)

Litigation Group Chairs: Eric L. Buchanan, TN Robert A Perez, Sr., OH

Section Chair: David A. Bryant, ILModerator: Eric L. Buchanan, TN



A Favorable Social Security Decision Will Help aLong-Term Disability Insurance Claim

By R. Scott Wilson, Chattanooga, Tenn.

Many social security claimants mayalso be covered by their employ-

ers’ group long-term disability (LTD)insurance coverage, an employee bene-fit seemingly growing in popularity.While in most states workers’ compen-sation benefits will offset social securi-ty benefits, a favorable social securitybenefit will impact LTD benefits.

The social security award will havea monetary effect, as most LTD policiesoffset social security benefits, and anaward of past due social security bene-fits may create a significant overpay-ment in favor of the LTD carrier. Thesocial security decision may also affectthe substantive proof of disability inthe LTD case.

Numerous courts have found that,while not binding, a favorable socialsecurity decision is evidence that theLTD carrier should consider. Case law

reflecting this proposition can be foundin almost every jurisdiction.1

ALSO A BOON FOR INSURERSInsurers who want to reduce their

liability by invoking their right to offsetsocial security benefits will encourageand even require beneficiaries to pur-sue a social security claim. The insurermay even actively assist the insured inapplying for social security disabilitybenefits, either directly or by hiring anattorney or non-attorney representativeto represent the insured.

The value of a favorable social secu-rity decision is particularly strong inthose cases where the insurer activelyassists in the social security process.For example, in Darland v. Fortis BenefitsIns. Co., 317 F.3d 516 (6th Cir. 2003), theSixth Circuit held that it was “totallyinconsistent” for the insurer to require

the plaintiff to apply for Social Securitybenefits, avail itself of the SocialSecurity determination so as to assertan overpayment, yet simultaneouslydeny that the plaintiff is disabled.2

Even after the Supreme Court heldthat, unlike social security cases, the“treating physician rule” is nonexistentin LTD claims, a favorable social securi-ty decision remains important wherethe insurer simultaneously assists theclaimant in pursuing social securitybenefits yet disavows the favorablesocial security decision.3

The insurer may argue that thesocial security decision has little valueon the grounds that the policy has a dif-ferent disability standard. In Calvert v.Firstar Finance Inc.,4 the court dismissedthis concern when a comparison

—the first annual

Section Connection ReceptionAn exclusive event for AAJ Section Members

Tuesday, July 17, 20076:00 p.m. — 7:30 p.m.Crystal Ballroom C, Hyatt Regency Hotelduring the AAJ Annual Convention in Chicago

Entertainment, Cocktails & Hors d’oeuvres

continued on Page 7



Dean BolandLakewood, OH

Dotty S. CarleyBirmingham, AL

Pat JacobsCharleston, WV

Rhonda L. JacobsCharleston, WV

Brennen Cutter MakiWest Hartford, CT

Gary MasseyChattanooga, TN

Richard F. McGintySalem, OR

Andrew Peter NemiroffGreenwich, CT

Arthur C. NilsenRoswell, GA

Harold Holt ParkerMurfreesboro, TN

Everett RiggsFairfield, WA

Susan H. RosenauWashington, DC

between the two definitions of disabili-ty showed they were substantiallyidentical. In many situations this con-cern may be easily deflected. However,a favorable social security decisionfounded either upon a listing or on thegrid regulations will be less useful inthe LTD context.

The Supreme Court in Black & DeckerDisability Plan v. Nord, 538 U.S. 822, 123S.Ct. 1965, 155 L.Ed.2d 1034 (2003),held that the “treating physician rule”is absent in ERISA disability cases.Insurers will argue, therefore, that asocial security decision relying upon atreating physician’s opinion must carryless weight in the LTD arena. However,Nord also says that insurers “may notarbitrary refuse to credit a claimant’sreliable evidence, including the opin-ions of a treating physician.”5

And practitioners generally knowthat social security does not automati-cally accept a treating physician opin-ion, but only credits it when it is “well-supported by medically acceptableclinical and laboratory diagnostic tech-niques,” according to 20 C.F.R. §404.1527(d)(2). The favorable socialsecurity decision, then, is the finding ofa neutral governmental arbiter that the

treating physician’s opinion is “wellsupported.”6

OTHER SIDE OF THE COINFinally, the unwary may face certain

pitfalls. If the social security decision isevidence, then both parties - the plain-tiff and the insurer – can use it to theiradvantage.7 Even an ostensibly favor-able social security decision may nega-tively impact an LTD claim, if it isfavorable for the “wrong reason.”

For example, many LTD policiesplace a time limit on how long benefitscan be received for a mental condition.A favorable ALJ decision that reliesmore upon mental limitations thanphysical ones could hurt, rather thanhelp, an LTD claim. Likewise, LTDclaims are incomparable to the GridRules, therefore, a finding that a 50-year old—who is unable to perform hispast work and has no transferableskills—is limited to sedentary exertionis good for the social security claim, butbad for the LTD claim.

Further, LTD policies typicallyrequire the claimant to be disabled atthe time he or she stops working.Consequently, an amended or partiallyfavorable onset date, even one that hasno effect on social security back pay,can negatively affect the LTD case.

In general, a favorable decision is afavorable decision, and it is neitheradvisable nor necessary to argue withan ALJ about the reasons if he or she iswilling to pay the case. If LTD isinvolved, however, a decision thatfinds the claimant disabled from theoriginal onset date, due to inability toperform even sedentary exertionbecause of physical illness, may bemore valuable than a decision with anamended onset founded upon theGrids or a mental condition.

1. E.g. Darland v. Fortis Benefits Ins. Co., 317 F.3d516 (6th Cir. 2003); Kirwan v. Marriott Corp., 10F.3d 784, 790 (11th Cir. 1994); Juan De Dios Cortesv. MetLife, Inc., 122 F. Supp. 2d 121,130 (D.P.R.2000); Pierce v. American Waterworks Co., 683F.Supp. 996, 1000 (W.D.Pa. 1988).2. Ladd v. ITT Corp., 148 F.3d 753 (7th Cir. 1998)(describing such situation as within the “penumbra ofjudicial estoppel”).3. Calvert v. Firstar Finance Inc., 409 F.3d 286, 295(6th Cir. 2005).4. Calvert, supra, 148 F.3d at 295 n. 45. Nord, 123 S.Ct. at 1972.6. Calvert, supra, 148 F.3d at 295.7. See Gannon v. Metropolitan Life Ins. Co., 360 F.3d211, 215 (1st Cir. 2004).

R. Scott Wilson is newsletter editor of theSocial Security Disability Law Section.Eric Buchanan & Associates, PLLC, 414McCallie Avenue, Chattanooga, TN 37402,[email protected].

New Section Members, Welcome!

Social Security Decision cont. from Page 6

The old adage, “you’re not getting anyyounger,” could not be truer when

describing the overall age of the UnitedStates population in general. The SocialSecurity Administration’s own statisticsreveal that 20 percent of all persons willbecome disabled for a year or morebefore reaching the age of 65. As wouldbe expected, the chances of becomingdisabled increase with advancing ageand consequential infirmity.

As is well known, the largest segmentof the United States population is the“Baby Boomer” generation comprised ofpersons born from 1946 to 1964.Therefore, the corresponding increase indisability claims has begun and will con-tinue to grow for the next decade.

The sad news is that neither the affect-ed population segment nor the SocialSecurity Administration (SSA) is pre-pared for this expected crushing onset ofdisability. Most Americans are not pre-pared to deal with the possibility ofbecoming disabled.

A recent survey by the NationalAssociation of Insurance Commissionersfound that 56 percent of U.S. adultswould be unable to pay their bills or meetexpenses if they became disabled andwere unable to work for a year or longer.The survey also found that only 44 per-cent of respondents have any long term

disability insurance coverage with 71 per-cent of those persons receiving long termdisability coverage through their groupbenefit plans from their employers ratherthan individually purchased coverage.

Most people are unaware that mostgroup plan benefits are offset by SocialSecurity benefits rendering coverageillusory in many cases. Even then, thestrict Employee Retirement IncomeSecurity Act, or ERISA standard ofreview, is applied, making it difficult toreceive benefits in the first place. Evenworse is this fleeting belief in disabilitycoverage which is further compromisedby a loss of employment which in turnterminates coverage.

This lack of preparedness for the bur-geoning disability roll is evident at theSocial Security Administration whichhas continually failed to address itsattempt to process an increasing backlogof disability cases. The Annual SSAWork Plan from the Office of Audit ofthe Office of the Inspector General forFiscal Year 2007 states that the SSAOfficeof Disability Adjudication and Reviewprocessing 519,359 cases in 2005 withsignificantly increasing case numbersfrom 308 cases per day in 2001 to 443cases per day in 2005. The pendingworkload as of September 30, 2005 was708,164 cases, up from 392,387 cases on

September 30, 2001. Part of the case backlog is due to inef-

ficient administrative law judges (ALJs).SSA acknowledges that federal law pro-hibits SSA from requiring certain produc-tivity goals from ALJs, noting that therange of productivity is 276 to 1,892 casesper year depending on the particular ALJ.

SSA has targeted several areas forincreased attention including fraud, dis-abled individuals hiding self-employ-



The Impending Disability Onslaught and its ConsequencesBy Scott B. Elkind, Silver Spring, Md.

Scott B. Elkind

continued on Page 11

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ment income, continuing disabilityreviews of disabled children, Ticket toWork, and overpayment collection. Thereality of these efforts is disconcerting.

SSA has successfully prosecuted atotal of 1,400 cases from 2003 to 2005 andidentified $12.2M in overpayments forwhich it has recovered only 10 percent ofthis amount. The funding and manpow-er going into these efforts to collect orretain money should be redirected intoprocessing the increasing backlog fordeserving claimants.

Unfortunately, SSA is lagging farbehind in completing many internalreviews with the following selectedreviews due for completion in 2007:

• Administrative Law JudgeCaseload Performance• Social Security’s DisabilityService Improvement Process• Management’s Use of WorkloadStatus Reports at Hearing Offices• Recovery of Benefit Overpayments• SSI Income Recipients Whose

Medicare Were TerminatedBecause of DeathEven worse is that the following

internal review are not slated to beginuntil 2007:

• Aged Cases at the Hearing Level• Disabilities Classified by SSA asDifficult to Prove• Proper Classification of TerminallyIll Beneficiaries • Transfers of Case WorkloadAmong Hearing OfficesSSA also has recognized that it has

incorrectly calculated workers’ compen-sation offsets in 110,000 cases and hasonly completed the review of the first61,000 so far. So, where is your taxmoney going if the funding is not goingto ensure timely processing of claims?Federal funding is going to:

• Software migration at 26 DDSoffices at a cost of $18M• Ongoing development of elec-tronic folder and data manage-ment architecture at a cost of $17M• Maintenance, repair, and rebuild-ing activities at the Great Lake

Program Service Center at a cost of$15M• Yearly cost of security contractedat $40M• Case folder services at SSA’sMegasite Folder Storage Facilitycosting $32MThe SSA’s message is clear. The

agency has little intention of fundingany initiatives to address their enormouscase backlog which will only increase inyears to come. The current case process-ing time of approximately two years fora claimant to receive benefits will onlyworsen and result in increasing numbersof deserving disabled claimants suffer-ing while they wait for their benefits.Because people without money are notpolitically empowered, their voices willonly be heard once the burden caused bytheir disability comes to rest on theirfamilies and communities.

Scott B. Elkind is a Social Security DisabilityLaw Section member. Elkind & Shea, TheDisability Benefits Law Firm, 801 RoederRd., Ste. 550, Silver Spring, MD 20910, T:301/495-6665, [email protected],www.disabilitybenefitslawfirm.com.

Disability Onslaught cont. from Page 10


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