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Morgan’s Tip of the Week – End to SSD Offsets?

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Greetings,

One of the items listed in the White House’s proposed 2018 Federal budget (beginning  10/1/17) is to put an end to our ability in Florida to offset WC  against Social Security Disability.   This has not passed yet, it is in the proposed budget which still has to work its way through Congress.

Right now, Florida, along with 14 other states, takes an offset against PTD (and TTD) if the claimant is receiving SSD.   The offset ends at 62 years old, because SSD converts to SS Retirement, for which there is no offset.  In the other 35 states, SSD takes the offset for WC paid by an Employer/Carrier.

Here is the exact and complete wording in the budget proposal (page 111).  No other details.

Eliminate Workers’ Compensation (WC) Reverse Offset. The Budget proposes to eliminate reverse offsets in 15 States where WC benefits are offset instead of DI benefits. Currently, in most States, the combination of benefits from WC and DI is limited to 80 percent of the recipient’s earnings before they were disabled. If necessary, DI benefits are usually offset to meet the limit. However, 15 States currently reduce the benefit from WC rather than DI in order to achieve the 80 percent limit, creating an unjustified inequity across States. This option would eliminate the reverse offsets in these States.

So, if this passes, what will it mean and what claims will it affect?   Well economically this will make our PTD exposure much, much greater…(for a quick example I just looked at one of my files where they have filed for PTD, the SSD Offset took our exposure from $875,000 to $695,000).  And its much greater on younger claimants.

Which claims?  Well, it will depend on the final wording in the budget, but….

  1. It would clearly affect all dates of accident after 10/1/17. 
  2. Possibly it could affect anyone accepted as PTD after 10/1/17.
  3. It may affect anyone accepted as PTD but the offset has not been calculated yet.
  4. Worst case, we lose the offsets on claims for which we are already taking the offset.

So, what can we do if it looks like this is going to be part of the final budget?

Settle those claims you can of course.  And use a PTD offset calculation in your exposure.

In case it will apply to claims where we have not started taking the offset, think about taking it sooner rather than  later.  Many times we don’t take the offset while they are on TTD because waiting for PTD Supps to be in the formula because it gives you a greater offset.  And as you may recall, once you calculate it and take the offset, you can’t recalculate it later.   However, as I tell my kids when they have to settle for fruit for dessert, something  is better than nothing. 

I will keep an eye on the budget changes as it moves through the legislative  process and keep you in the loop.

Hope to see you at our Tampa convention event on 7/21, flyer attached….

2017 Tampa Event Flyer

Sincerely,

Morgan Indek | Partner