Attorneys are sharing with me that they are receiving quite a few calls from insureds asking whether they have to pay back their SSDI overpayment to insurers. While it may be understandable on some level due to our horrible economy, DCS has always taken the view that when insureds sign a Payment Option Form and promise to pay back the money – they should pay it back.
After all, the insurance company “fronted” claimants the money by paying full benefit until SSDI awards were approved and benefits forwarded. Through the Payment Option Forms, claimants were given a choice to receive full benefit and pay the money back, or have estimated offsets taken from their checks in the beginning. 99.9999% of claimants, I’m sure, want to receive 100% of their disability benefit and they quickly choose Option A – to receive full benefit and agree to pay it back.
When the retroactive check arrives, some need the money and spend it. Doing this doesn’t really get anyone ahead since the insurance company will reduce benefits to $0 until it recovers the full overpayment.So, if you spend the SSDI overpayment, don’t expect to see any benefits until the insurance company recovers what you agreed to pay them in the first place. How does this put you ahead?
I know some readers may not appreciate me saying this, but having a disability does not give one license to do dishonest things. Claimants who sign a Payment Option Form agreeing to give the money back to insurers have an obligation to pay it back, and it’s dishonest not to.Let’s use Unum as an example.
In the distant past, Unum used to be pretty understanding about SSDI overpayments and went to great lengths to approve monthly offsets claimants could afford to give up. This resulted in some cases of paying back SSDI overpayments 10 years or more into the future, and Unum got sick of it.
After some years, Unum changed its policies by revising the wording on the Payment Option Form to include voluntary tangible asset liens on property and assets if the money wasn’t paid back. I notice in the last several years, Unum again changed it’s wording on the POF and relaxed its standards to still be honest to both parties.
I get it. Sometimes claimants receive SSDI checks for more money than they have ever held in their lifetimes, and it’s hard to give it up. At the same time, though, most claimants become frustrated, angry, and demanding when insurers do something that is dishonest toward them and will fight tooth and nail until every single penny, nickel and dime is paid to them by insurers. The hypocrisy is easily seen from where I’m sitting.
DCS’, as a company, supports honesty in all issues, including the repayment of SSDI overpayments. In my opinion, if you AGREE to pay back the SSDI overpayment, then it should be paid back. As understandable as it is, having a disability does not give license to dishonesty, regardless of how tempting it may be to keep the money and spend it. In the end, claimants will not benefit from spending money owed because there will be no benefits in the future. Doing the right thing is by far the better way.
