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Court Rules Against CIGNA on Dependent Offset Efforts

A New York Federal Court has ruled against CIGNA and in favor of a long term disability insurance claimant, on an important issue for many claimants. This is whether CIGNA is permitted to offset for benefits paid to a dependent, such as a child. At issue in this case was whether CIGNA was permitted to offset benefits and potentially recover an overpayment of benefits paid to the claimant, for benefits received from Social Security and paid on behalf of the claimant's minor child.

The benefits at issue were paid to the ex-wife of the claimant on behalf of his daughter. The claimant argued that the offset and overpayment recovery efforts were impermissible, as the child was not his dependent and did not live with him. CIGNA argued that it was permitted to offset the benefits and recover an overpayment on the basis of policy language as well as a repayment agreement which the long term disability insurance claimant had executed.

The Court rejected CIGNA's arguments -- holding that the plain language in the policy did not support CIGNA's ability to pursue recovery of the dependent Social Security benefits. Because the Court found the plan language to explicitly support the claimant's position, judgment was granted to the claimant and against CIGNA. Lastly, the Court determined that the claimant could pursue damages and attorneys fees.

The issue of an insurer's efforts to secure recovery of benefits resulting from an award of Social Security Disability benefits is very common. If you are facing that issue, we can help you.

Brutvan v. CIGNA

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