Why Social Security Disability Decisions Matter in ERISA Long-Term Disability Appeals

Many individuals applying for or receiving long-term disability (LTD) benefits through an employer-sponsored plan are also encouraged—or required—to apply for Social Security Disability Insurance (SSDI). This can create confusion, especially when the SSA finds a claimant disabled while the insurance company does not.

An SSDI award does not guarantee approval of LTD benefits. However, under ERISA, an LTD insurer cannot simply ignore a favorable Social Security decision. When an insurer benefits financially from an SSDI award through an offset but rejects the LTD claim without meaningfully addressing Social Security’s findings, that approach can violate ERISA’s requirement of a full and fair review.

The Difference Between SSDI and LTD Benefits

Although SSDI and LTD benefits often address similar medical conditions and functional limitations, the programs are distinct.

SSDI is a federal program administered by the Social Security Administration. Claimants must show that a medically determinable impairment prevents substantial gainful activity for at least 12 months or is expected to result in death.

LTD benefits, when governed by ERISA, depend on the terms of the specific insurance policy. Many plans evaluate whether the claimant can perform the material duties of their “own occupation” for an initial period, then shift to an “any occupation” standard—asking whether the claimant can perform any job for which they are reasonably suited.

The standards differ, but SSDI findings often address the same conditions, restrictions, vocational considerations, and functional capacity issues central to an LTD claim. That makes SSDI evidence highly relevant.

Why LTD Insurers Frequently Push Claimants Toward SSDI

Most LTD policies include an offset provision allowing the insurer to reduce monthly benefits by the amount of SSDI received, including dependent benefits. For example, if LTD benefits total $4,000 per month and SSDI pays $2,000, the insurer may reduce its payment to $2,000. Retroactive SSDI awards often lead insurers to demand repayment based on past offsets.

This creates a financial incentive for insurers: they benefit when Social Security finds the claimant disabled. The issue arises when insurers embrace the SSDI award to reduce payments but dismiss the same decision when evaluating disability under the LTD policy.

ERISA does not permit this kind of one-sided evaluation.

ERISA Requires Meaningful Consideration of an SSDI Award

Under Department of Labor regulations, when a claimant submits an SSDI determination, an ERISA fiduciary must explain why it disagrees with Social Security’s findings. A conclusory statement—such as “SSDI applies a different standard”—is not enough.

A proper review must address:

  • Which impairments Social Security found severe
  • What functional limitations were accepted
  • Whether Social Security considered medical or vocational evidence the insurer overlooked
  • How treating physician opinions, consultative exams, or vocational testimony influenced the SSDI decision
  • Whether the LTD policy’s “any occupation” definition parallels the SSA’s focus on sustaining competitive work
  • Why the insurer’s reviewing doctors or consultants disagree with the SSA’s findings

An insurer does not have to adopt the SSA’s decision—but it must genuinely engage with it.

The Supreme Court’s Guidance: MetLife v. Glenn

In Metropolitan Life Insurance Co. v. Glenn , the United States Supreme Court held that when an insurer both decides claims and pays benefits, a structural conflict of interest exists. The Court criticized MetLife for encouraging a claimant to seek SSDI, benefiting financially from the resulting offset, and then denying LTD benefits without grappling with Social Security’s favorable decision.

This inconsistency can be evidence that the insurer’s conflict improperly influenced the denial.

What Claimants Should Submit During an LTD Appeal

The administrative appeal is crucial in ERISA cases because courts typically limit their review to the evidence submitted before the final decision. Claimants should not assume the insurer will obtain the Social Security file.

If you have been awarded SSDI, your LTD appeal should include:

  • The Notice of Award
  • The Administrative Law Judge’s decision (if applicable)
  • Disability determination explanations
  • Consultative examination reports
  • Residual functional capacity assessments
  • Vocational expert testimony or findings
  • Medical evidence submitted to Social Security
  • Function reports or third-party statements
  • Documentation of the established onset date

The goal is not only to show that Social Security approved the claim, but to demonstrate why the reasoning supports disability under the LTD policy.

What an LTD Denial Letter Should Address

If an insurer denies LTD benefits after an SSDI award, its denial must do more than briefly acknowledge the decision. A proper denial should:

  • Explain why the insurer disagrees with SSA’s findings
  • Identify any differences in plan definitions that matter to the outcome
  • Point to specific evidence showing improvement or contradicting the SSA decision
  • Address why the insurer’s consultants are more persuasive than the evidence accepted by Social Security

A generic statement that “Social Security uses a different standard” may fall short of ERISA’s requirements.

Why SSDI Evidence Can Strengthen an ERISA LTD Appeal

An SSDI award can be pivotal because it:

  • Supports that the claimant cannot sustain full-time competitive work
  • Reveals inconsistencies in the insurer’s reasoning
  • Adds medical, functional, and vocational evidence to the administrative record
  • Frames the appeal around the central issue: the claimant’s ability to reliably work on a sustained basis

Courts frequently note that while SSDI decisions are not binding, they can be powerful evidence—particularly when the LTD policy’s “any occupation” standard mirrors SSA’s vocational analysis.

The Bottom Line

An SSDI award does not automatically guarantee LTD benefits under an ERISA plan. But it is significant evidence that an insurer must meaningfully consider. When an insurer benefits from a claimant’s SSDI approval and then disregards that same decision without explanation, the denial may not survive ERISA scrutiny.

At Davis Olszeski, we help claimants throughout the Midwest navigate ERISA disability appeals and litigation. If your LTD benefits were denied, terminated, or reduced after an SSDI award, it is important to understand how Social Security’s decision fits into your ERISA case—especially before your appeal deadline expires.

This article is for general informational purposes only and does not constitute legal advice. Reading it does not create an attorney-client relationship. Every claim depends on the specific terms of the plan and the evidence in the administrative record.