Wednesday, June 3, 2009

Social Security Disability Insurance

Posted by Sylvius von Saucken

I settled a disputed liability case 5 years ago involving a woman who walked out in front of a car and was hit. She was critically injured, lost her leg, $920k in medical bills, etc. Amazingly, the defendant's insurance carrier chose to settle the case for the policy limits of $50k. At the time, the client was not on Medicare and only had TennCare BCBS. Given the disputed nature of the claim, and the fact that the settlement was grossly inadequate, BCBS agreed to waive their subro. Also, Vandy agreed to waive their substantial lien.

I have just received a message today that SSDI has now decided to stop her checks because she received the settlement in 2004. Obviously, there was no MSA at the time because she was not receiving Medicare and there was no recovery for future medical care anyway.

In addition to informing Medicare of the disputed claim, the BCBS waiver, etc., what do you recommend that I do?

Social Security Disability Insurance (SSDI) is not based on income or assets, but rather work history and a qualification of disability. As a result, unless the case was a workers’ compensation claim, Social Security has no offset statute to trigger an overpayment process.

On the other hand, if the client is receiving $674 or less from Social Security, it is likely the case that SSI (Supplemental Security Income) is being reduced, because that would be based on income being less than threshold amounts (back in 2004 that would have been close to $579 per month) and assets being less than $2,000 (excluding the value of certain assets such as a home or car).

The best way to figure this out is to ask for a copy of the client’s Social Security letter (which she receives each year, around December), which tells her how much she will get (with Cost of Living Adjustments, etc.) for the coming months and why. She can also request a one-page benefits summary from her case worker that will properly identify the type of Social Security benefits received.

IF SSI, then there would be a repayment issue, but that follows very specific procedures, and there is an opportunity to minimize the reduction of SSI as part of that process.

Our best,
Sylvius von Saucken