What Happens to Your Long Term Disability Benefits When You Turn 65?
Several years ago you suffered a medical condition that left you unable to work. Thanks to your Long Term Disability policy, you’ve been receiving monthly benefits that have enabled you to pay your mortgage, medical expenses, and everyday living costs.
Yet several months before your 65th birthday, you receive a letter from your insurance provider informing you that your Long Term Disability benefits will end soon. You were counting on those benefits continuing, and now you’re left wondering, “does disability insurance stop at 65?”
Turning 65 doesn’t mean your disability suddenly disappears. But Long Term Disability benefits are designed to replace income lost due to illness or injury during a person’s working years. So, does turning 65 mean that your disability benefits will change?
Rather than assume a Long Term Disability age limitation takes effect when you turn 65, you should review the terms of your policy before you reach this milestone age.
It costs nothing to get answers to your questions –
Does Long Term Disability Insurance Stop at Age 65?
Many policies use age 65 as a termination point for Long Term Disability (LTD) benefits because it has historically been associated with “retirement age.” However, there is no universal rule or federal law that mandates LTD benefits must end at that age.
What determines the age when disability benefits end is the language of the policy itself.
In most employer-sponsored, ERISA-covered disability insurance plans, important information about the plan is provided in the Summary Plan Descriptions (SPD). The SPD describes a plan’s benefits, limitations, claims procedures, and participant’s rights. However, the SPD is only a summary of the plan. It can be helpful to review the actual insurance policy, certificate of coverage, and ERISA plan documents to get a complete picture of the terms that apply to your claim.
While many ERISA Long Term Disability plans do terminate at age 65 or 67, the actual determination date can also vary based on when your disability began.
Some policies use a maximum duration limit. Maximum duration covers a specific time frame of eligibility that a claimant can receive benefits, which is not based strictly on their birth date.
For example, a disability that occurs before the age of 60 may receive benefits payable until age 65, while someone who becomes disabled after age 60 may receive benefits for a specified number of years. Under some policies, a person who becomes disabled at age 65 can potentially receive 2 years of disability benefits.
This type of Long Term Disability age limitation is recognized in some employee benefit plans, but should not be considered universal. Your specific policy may establish a hard-cutoff age, or it may provide a certain number of years based on the age you became disabled.
If you are unsure which applies to your policy, consider speaking with an LTD attorney who can help you understand your coverage terms.
How Social Security and Medicare Eligibility Can Affect LTD Benefits
Generally speaking, when a person turns 65, they may be reaching retirement age and may become eligible for other forms of benefits.
Because of this, some disability benefits may change at 65 due to policy language regarding other sources of income, such as Social Security Retirement, retirement, or pension benefits. These are known as offsets.
Offsets can potentially reduce the amount of remaining monthly LTD payments because the claimant is receiving other forms of income.
The specific offsets that can affect LTD benefits are described in a policy’s terms. If your LTD policy contains offsets for Social Security retirement benefits or other income, reaching age 65 can affect your payments.
However, the full Social Security retirement age isn’t 65 for everyone. Full retirement for people born in 1960 begins at 67. For people born earlier, the exact age can vary based on the year of their birth.
Individuals who are receiving Social Security Disability Insurance (SSDI) will generally have their benefits converted automatically to Social Security retirement benefits when they reach the full retirement age. That age can be later than 65 in some cases.
What about LTD benefits and Medicare eligibility?
Most people become eligible for Medicare when they turn 65. However, because Medicare and LTD are separate benefit systems, receiving LTD benefits should not exclude Medicare eligibility. However, whether receiving Medicare benefits means any offsets to your LTD benefits will depend on the language of your policy.
What Should You Check in Your LTD Policy Before You Turn 65?
If you’re currently receiving Long Term Disability benefits and your 65th birthday is approaching, it can be beneficial to examine your LTD policy now to understand what potential changes may be on the horizon.
Maximum Benefit Duration
Your policy’s documents should disclose the maximum period for which you can receive disability benefit and what changes can occur at age 65. Depending on the plan, it may include a maximum period of payment, number of benefit years, and provisions based on the age when your disability began.
Income Offsets
Your policy may include offsets for other forms of income including Social Security, retirement benefits, pensions, Workers’ Compensation, or other forms of disability benefits. Whether your policy has these offsets and how much they can affect your benefits depends on its specific language.
ERISA Plan Documents
For ERISA Long Term Disability plans, age 65 can be an important milestone, but it doesn’t necessarily mean your benefits are ending. ERISA-covered individuals are entitled to receive their plan information, including the Summary Plan Description (SPD).
The SPD can help you understand provisions related to the maximum duration of benefits, age limitations, offsets related to other income, and claim and appeal procedures.
What If Your LTD Benefits Are Denied or Terminated After Age 65?
If you receive a notice from your insurer explaining that your benefits are ending because you are turning 65, you should review your policy and plan documents to determine what actual provisions the insurer is citing to justify that decision.
A termination of disability benefits after age 65 doesn’t automatically mean that your insurer is acting improperly, but you should not simply assume that the insurer’s decision is correct without examining your policy closely.
Your policy may actually contain language that clearly establishes that your benefits terminate at 65, but that is not a universal policy requirement.
In some cases, you may be able to challenge or dispute the insurer’s determination. The insurer could have made an incorrect calculation of the maximum benefit period, improperly applied an offset, misread the age-at-disability provision, or terminated benefits despite a longer applicable benefit period.
If you believe that your Long Term Disability benefits are being improperly terminated or denied based on your age, having an attorney review your policy and plan documents can help you understand the insurer’s decision and whether you have grounds to dispute their decision.
Unsure About Changes to Your LTD Benefits at Age 65? Contact Fields Law
Turning 65 is an important milestone in a person’s life, but it doesn’t automatically mean that you will lose Long Term Disability benefits.
What happens to your benefits will depend on your policy’s maximum duration and termination provisions. Social Security, retirement benefits, and Medicaid benefits that can begin at 65 can also potentially affect the amount of your benefits via offsets.
If you’re approaching age 65 and are concerned about the impact on your benefits, or if you’ve already received a notice from your insurer regarding disability benefits changes at 65, one of Fields Law’s LTD attorneys can help you review your policy and understand your rights.
It costs nothing to get your questions answered. Contact Fields Law today for a free initial consultation to discuss your LTD benefits and eligibility with one of our experienced attorneys.
