You need to carefully read and get legal advice on the “fine print” of the Long Term Disability (LTD) policy and you need to find out whether you paid the premium, the employer paid the premium or both paid. The WC insurance company is entitled to take a credit (deduction) for the part of the LTD they paid for. The fine print of the LTD policy may have language about additional credits or deductions. You have to be very careful to research these issues before you accept LTD in addition to workers’ compensation as it can actually cost you money (i.e., be a net loss) to collect both. There are also tax implications and destruction to your leverage for a lump sum settlement of the workers’ compensation benefits.
You also have to be careful not to retire from the time-of-injury employer since the WC insurance company can claim that you have taken yourself out of the workforce and are not entitled to WC. Sometimes an employer will want you to take LTD in conjunction with a separation from employment. Also, you should understand that the employer may be entitled to further credits from retirement or severance payments.
Generally, LTD carriers want you to apply for SSD because their policy will say that they are entitled to pay you less LTD if you are receiving SSD.
It may be a good idea for you to receive SSD in addition to WC. WC does not have a credit for SSD; thus, you can receive full WC and partial SSD. This topic is covered in much more detail in other articles on this site. You need to be careful; however, if you are close to retirement age. At that point your SSD will turn into Social Security Retirement SSR). At that point, the credit situation reverses and WC can deduct the amount of your SSR from the WC.
Thus, while it is possible to receive WC, LTD and SSD; there may be credits or deductions which could lessen the amount of your WC check. The WC insurance carrier and the LTD carrier will not explain this to you. It is a good idea to get expert legal advice before proceeding. Call us at no cost for advice at 1-887-291-9675.