OLR Bill Analysis

sSB 716

AN ACT ELIMINATING THE REDUCTION OF BENEFITS PAYABLE UNDER A LONG-TERM DISABILITY POLICY BY AMOUNTS RECEIVED BY THE INSURED IN SOCIAL SECURITY PAYMENTS.

SUMMARY:

This bill bans any individual or group long term disability insurance policy, certificate form, application, rider, or endorsement in Connecticut from including a reduction (offset) of coverage or benefits payable because the insured receives Social Security disability benefits. The bill applies to policies (1) paid for entirely by the insured and (2) delivered, issued for delivery, amended, renewed or continued in Connecticut on or after July 1, 2009.

Current law permits such reductions, but prohibits reductions under group policies from increasing over time because the claimant receives an increase in other disability benefits. In other words, current law bars an offset under a group policy from increasing if the claimant receives, for example, a cost of living increase in Social Security disability benefit.

EFFECTIVE DATE: Upon passage

BACKGROUND

Disability insurance and Social Security Disability Benefits

Many claimants who qualify for benefits under long-term disability insurance may also qualify for federal Social Security disability benefits. Many long-term disability policies include an offset so the benefits from the two plans do not exceed a certain threshold of the claimant's pre-disability wages (such as 60%).

COMMITTEE ACTION

Labor and Public Employees Committee

Joint Favorable Substitute