Social Security and ERISA Disability Benefits
The question often arises that if you are approved for Social Security disability, does that automatically entitle you to long-term disability benefits under an ERISA plan, or vice versa?
The answer is "no." A grant of disability benefits under the Social Security Administration (SSA) does not automatically entitle you to long-term disability benefits under an ERISA plan, and the same is true if you are awarded disability benefits under your long-term disability plan and then apply for disability benefits under Social Security.
One reason is that the criteria for disability benefits are usually different between Social Security and the ERISA plan.
Accordingly, in Black & Decker Disability Plan v. Nord, 538 U.S. 822 (2003), the court noted that the determination by the Social Security Administration to approve disability benefits was not binding on the long-term disability plan's benefit decision.
However, the court also held that the favorable SSA determination should not be ignored and that it was certainly relevant to the plan's decision to award or not award disability benefits. In other words, the SSA's determination should at least be considered by the plan in making its own benefit decision.
The court further noted that the plan encouraged and offered assistance to the claimant in Nord to file for Social Security disability benefits. Moreover, the disability criteria under Social Security were more stringent than the criteria under the plan.
For all these reasons, while an insurer is not bound by a favorable or unfavorable benefit decision from the SSA, that decision must not be ignored and should at least be considered by the plan as it makes its own benefit decision.