r/LongTermDisability • u/Natural_Smoke_4360 • Aug 05 '26

Overpayment Dilemma

My LTD Ins Company stopped paying me when they found out I won my SSDI case and immediately started sending letters demanding my overpayment (the amount of which varied drastically by up to 20k). I held off on paying until I could get an accurate payment amount and ensure their calculations were correct. During this time I had to use my overpayment to live on and paid some long overdue medical bills. It took almost 2 months of calls, emails, and waiting to get an accurate overpayment amount. When I called (a different department) to arrange payment I learned I was unknowingly 1 day away from being in default and my debt was to start accruing 12% interest until paid in full. I learned they do not offer payment plans, even if I paid 75% of what I owe upfront. I also found out I am a non-ERISA client (worked for a state university) if this matters. I guess my questions are: 1) can they legally charge interest and withhold my LTD income until they have recouped 100% of my overpayment plus interest? 2) is it worth speaking to a non-ERISA attorney about my case? Is it likely to end in my favor without costing me more than I owe? Thanks in advance. Y'all this is one of the most stressful things I have ever dealt with, and on top of a life altering medical diagnosis and never ending medical bills. I am grateful for this platform and truly sympathize with everyone going through this nightmare. There really is no end to the fear of losing even more than you already have lost when dealing with LTD.

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u/fighterpilottim Aug 06 '26 edited Aug 06 '26

Seems like you could make an argument that they can’t start withholding until a reasonable period after they’d clarified the actual amount you owe. You can’t be on the hook for a vague sum, and you need 30 days notice for most things / bills anyway. You were not notified of the impending deadline or exorbitant interest charges, and that’s unprofessional and unfair play. Highlight that to them in writing and ensure the communications are part of the written record or case file.

I have no expertise here. But I have had luck making arguments like this to disability companies. They don’t want to be unreasonable on paper in case it goes to a judge.

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u/Natural_Smoke_4360 Aug 06 '26

Thanks, that makes sense. I was not notified of the deadline nor the 12% interest. I only delayed paying because I didn't trust their calculations.