ERISA

Eligibility to Work While on Security Disability Insurance (SSDI) and Supplemental Security Income (SSI)

Under both Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI), disability beneficiaries may return to some form of work through programs designed by the Social Security Administration (SSA).

Those receiving SSDI benefits have the right to tentatively reenter the workforce without impacting their monthly benefit through SSA’s Trial Work Period (TWP). This 9 (non-consecutive) month program allows a beneficiary of SSDI to return to work and receive both income and monthly SSDI benefits. Following a Trial Work Period beneficiaries can continue to work for 36-months under an Extend Period of Eligibility. This period, however, does have an income cap each month, and if the beneficiary exceeds this cap than their benefit will be revoked for that month.

SSI beneficiaries may also reenter the workforce, but those who do should be cautious about the impact that will have on their monthly benefits. Those who work while receiving SSI do not have a Trial Work Period and will see an immediate decline in benefits while working.

Trial Work Period

During this period a beneficiary will continue to receive their full monthly benefit regardless of how high their earnings are. This allows a SSDI recipient to test their ability to work without having to worry that it will impact their benefits. The Trial Work Period is counted as any 9-months where beneficiary earns $850 or more. If a beneficiary earns under this amount then SSA does not count the month as a Trial Work Period service month. This means that the 9-month period does not have to be consecutive. The beneficiary must inform the Social Security Administration of their earnings each month that they work so that SSA can accurately assess which months count as a Trial Work Period service month. Failure to inform SSA could lead to a revocation of benefits or SSA counting a month as a service month even when the beneficiary earns under $850.

 Extended Period of Eligibility

This is a 36-month period following the Trial Work Period where SSDI recipients will continue to receive full benefits every month as long as the recipient earnings are under the “substantial gainful activity” (SGA) threshold. In 2019, SGA is $1,220 a month, but each year this number is subject to adjustment. SSA determines if a beneficiary is eligible for a benefit check on a month-to-month basis during this period. If a recipient earns above the SGA amount in a given month than they will lose that month’s entire benefit. After the 36th month, when the period is over, those who earn over the SGA threshold will have their SSDI benefits canceled entirely.

 Expedited Reinstatement

Those who lose their SSDI benefits by earning over the SGA threshold after the Extended Period of Eligibility have a five-year period where SSDI benefits may be reinstated. If working past the Extended Period of Eligibility results in a beneficiary losing their benefits, but then their monthly income slips below the SGA threshold, the beneficiary may file an application for expedited reinstatement. This allows SSA to reevaluate a former beneficiary’s eligibility without forcing them to submit an entirely new application. Once an application for expedited reinstatement is filed, SSA will pay the former beneficiary full benefits for six months while the application is processed. In order to deny an application of this nature, SSA must demonstrate that the beneficiary has medically improved enough to not qualify for disability since the last time they received benefits. In contrast, if this were a new application, the applicant, not SSA, would have to prove that they are medically disabled. This process allows those who have worked, but lost their benefits an opportunity to return to SSDI without the repercussions of having to apply from scratch.

 Working While on SSI

As stated before, SSI does not have a Trial Work Period. Instead those who seek employment while receiving monthly SSI benefits will be subject to adjustments in the pay scale for benefits. A beneficiary will be able to receive some benefit as long as they make under SSA’s income limit for SSI. In 2018, that limit is $750 dollars. If wages in 2018 exceed $750, an SSI beneficiary would receive no SSI benefits. SSA does not count the first $85 dollars a person earns when calculating the benefit reduction. However, after a beneficiary earns $85 in a month, for every additional dollar earned, SSA deducts 50 cents from the monthly benefit.

 For example, consider a beneficiary who earns exactly $500 in a month

$500-$85=$415
$415÷2=$207.50

This means that this person’s SSI benefits would be reduced by $207.50 a month. Those receiving SSI benefits should keep this in mind when attempting to return to the workforce.

Obtaining Disabilty Benefits From the Maryland State Retirement Agency

In Maryland, many state employees are eligible for disability retirements benefits if they are no longer able to work for a state agency or other government agencies, such as Baltimore City Public Schools.  There are three types of disability retirement benefits: Ordinary Disability Benefits, Accidental Disability Benefits, and Special/Accidental Disability Benefits.  

Ordinary Disability Benefits are disability benefits received because an individual cannot work because they are disabled.  Typically, claims for Ordinary Disability Benefits have to filed within four years after paid employment ends. Individuals who are part of the Teachers’ Retirement Plan have five years to apply for benefits.

Accidental Disability Benefits are awarded when the cause of the injury occurred in the performance of the claimant’s work duties at a definite time and place.  The disability cannot stem from willful negligence.  Moreover, the claimant must be totally and permanently unable to perform their job as a natural and proximate result of the accident.   Claims for Accidental Disability Benefits have to filed within five years of the accident occurring.

Special/Accidental Disability Benefits are Similar to Accidental Disability Benefits, but are available for State Police or individuals participating in the Law Enforcement Officers Pension System (LEOPS).  To be awarded these benefits a claimant needs to be totally and permanently disabled for duty and the disability needs to arise out of and in the course of the performance of their job, without any willful negligence on the part of the claimant. 

When applying for Accidental Disability or Special/Accidental Disability Benefits, the Maryland State Retirement Agency should automatically consider you for Ordinary Disability if you have at least five years of eligibility service.  However, the State Retirement Agency has been known not to consider applicants that do not check box on the application for Ordinary Disability Retirement. Moreover, if you apply for Ordinary Disability, and you do not simultaneously apply for Accidental Disability or Special/Accidental Disability, you cannot request Accidental Disability or Special/Accidental Disability for an injury that occurred prior to the application date for Ordinary Disability.  Checking the right boxes on the application is critical.

Collecting medical records will be an important part of the application process.  These records, along with a narrative that you provide the State Retirement Agency will be how Maryland State Retirement Agency decides whether are you are eligible for benefits.  If you are denied benefits after you first apply, you have the right to appeal the denial.  As part of the appeal, you will have a hearing to determine if you should be awarded benefits.

Once awarded benefits you will have multiple options as to how to select your benefits.  It is important that you select the benefits that you want correctly the first time.  Once the State issues you a check, the State does not have to let you change your mind as to the amount of benefits you receive.  Plans will vary in terms of whether you can name a beneficiary or medical coverage.

If your employer is forcing you to retire or quit, it is important that not only do you apply for the required disability benefits, but that you also submit certain forms, such as Form 129, prior to the date you are forced to retire.  If Form 129, is not submitted prior to the date you are forced to retire, you may become ineligible for benefits, even if you submitted your application date before the retirement date.

If you need someone experienced in this matter to help you obtain disability benefits from the Maryland State Retirement Agency, please contact the Law Office of Phillip E. Chalker at phillip@attorneychalker.com or (443) 961-7345..

ERISA: The Standard that Companies Should Use When Determining if an Employee is Eligible for Benefits

An individual eligible for a company’s pension, life insurance, or disability insurance benefits is called a participant.  The company that provides those benefits is called a provider or administrator.  Often the administrator is a third party and not the company that employees the participant. 

An administrator must follow certain steps prior to denying a participant’s application for benefits.   First an administrator must establish and maintain reasonable procedures governing the filing of benefit claims, notifications of benefit determinations, and appeals of adverse benefit determinations.   When denying a claim, the administrator must provide adequate notice in writing to any participant or beneficiary whose claim for benefits under the plan was denied.  In simple English, the administrator must state the specific reasons for denying the claim and reference the provisions of the plan for which the denial is based.  After denying a claim, the administrator must provide the participant with a description of the plan’s review procedures and the time limits applicable to such procedures.  Moreover, the administrator must inform the participant whether the administrator needs any additional information to make a favorable decision.   

After an initial denial, an administrator must provide an opportunity for the participant to appeal the denial.  During the appeal, the administrator must provide a full and fair review.  During the entire review process, the administrators must ensure that benefit determinations are made in accordance with governing plan documents and that, where appropriate, the plan’s provisions have been applied consistently with respect to similarly situated claimants.  The administrator must include a statement of the claimant’s right to bring a civil action under section 502(a) of ERISA following a denial on review; provide the specific rule or a statement that a rule was relied upon in making the adverse determination, and a statement that a copy of such rule will be provided free of charge to the claimant upon request.

To provide a full and fair review an Administrator must:

  1. Upon request of a claimant, provide free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant’s claim for benefits.
  2. Take into account all comments, documents, records and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination;
  3. Consult with a healthcare professional that has appropriate training and experience in the relevant medical field when deciding an appeal of any adverse determination that is based in whole or in part on a medical judgment.
  4. Conduct a second review that does not afford deference to the initial adverse benefit determination.
  5. Have the person that conducts the second review be a new person and not be a subordinate of the person that performed the initial determination. 
  6. Consult a healthcare professional for an appeal of an adverse determination.  This healthcare should not be the individual who was consulted in connection the with initial adverse benefit determination that is the subject of the appeal nor the subordinate of any such individual.

In the Fourth Circuit, which Maryland is in, administrators cannot identify a new reason on appeal to justify why a participant is ineligible for benefits without giving the beneficiary the opportunity to appeal the new reason for the denial.  Moreover, prior to terminating benefits, an administrator needs to rely on substantial evidence and consider all symptoms, not just a select few.

If you have questions concerning your ERISA claim, contact the Law Office of Phillip E. Chalker at phillip@attorneychalker.com or (443) 961-7345.

ERISA: The Standard of Review When Determining if an Employee is Eligible for Pension Benefits, Disability Insurance, or Life Insurance

Section 502 of the Employee Retirement Income Security Act (ERISA) is a law that ensures that employees are given the work benefits that their employer provides.  (Section 502 of ERISA corresponds to 29 U.S.C. §1132).  If a company provides a benefit plan to employees, and the employee meets the standards to qualify for the benefits, the employer must provide the benefits to the employee.  Life insurance, disability insurance (both short term and long term benefits), and pension plans are types of plans that fall under ERISA. ERISA requires plans to provide participants with information about the plan and sets the minimum standards for participation in the plan, vesting, benefit accrual, and funding.   More specifically, ERISA is designed to help participants recover benefits due, enforce rights, and to clarify rights to future benefits under the terms of the plan.

Individuals participating in the plan are considered participants.  If a participant applies for benefits under the plan, and the plan administrator denies the participant’s claim for benefits the participant can ask the administrator to reconsider the claim.  (Appeals to the administrator are considered administrative appeals.)  A participant can bring their case to court once the opportunities for reconsideration at the administrative level are exhausted.  Often, ERISA claims are filed in federal court. 

If a participant chooses they can attempt to enforce their rights by bringing a lawsuit against the administrator.  In court, participants and administrators will often fight over the standard of review: de novo or abuse of discretion.  A brand new review is called a de novo review. Courts should conduct a brand new review to determine if a participant is eligible for benefits, unless the plan gives the administrator discretionary authority to award benefits.  If the judge proceeds with a de novo review he will review all records submitted to the administrator and potentially other records to reach a decision. 

Many plans incorporate language that give administrators discretionary authority to determine if a participant is eligible for benefits.   If the plan gives the administrator discretionary authority to decide if a participant is eligible for benefits, courts will review the claim by determining whether the administrator abused their discretion or made arbitrary and capricious decision. In abuse of discretion, the judge will only determine if the company came to a reasonable decision.   The abuse of discretion standard is not as favorable to the participant as a de novo review. 

Although plan administrators will often try to use language in their plan to ensure that courts use an abuse of discretion standard of review, sometimes the language the plan administrator uses is insufficient to permit courts to use the deferential abuse of discretion standard.  For example, an insurance company might not be able to rely on an abuse of discretion standard of review if they use language that states proof must be “satisfactory to us” to provide benefits.

If an employee is successful in court, they can be awarded the entirety of benefits due, court costs, and attorney fees. Hiring a knowledgeable attorney can help you in your ERISA claim.  If you need legal assistance for your ERISA claim, contact the Law Office of Phillip E. Chalker at phillip@attorneychalker.com or (443) 961-7345.