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LawTalk, Attorney
Category: California Employment Law
Satisfied Customers: 37639
Experience:  I have 30 years of experience in the practice of law, including employment law and discrimination law.
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I was receiving long term disability benefits through my company

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I was receiving long term disability benefits through my company when the unit I was in was sold off. The old company continues to fund and administer my long term disability benefits, but I am now being laid off by the new owners of my unit. Do I lose my long term disability benefits if I accept a severance package from the new owners of my unit or can I continue to collect the full long term disability benefit amount for the entire 24m limit and also the severance?
Good afternoon,

I'm Doug, and I'm very sorry to hear of your situation. My goal is to provide you with excellent service today.

Whether your long term disability plan will be impacted by your severance agreement payment is strictly a matter of policy interpretation. Some disability policies are actually written such that they are entitled to an offset based on the money that you get from your employer in a severance package. However, just because you will not longer be employed with the company does not mean that your disability benefits will end. They will continue for the time allowed under the policy, or until you are no longer disabled.

So check your policy language for offsets that the insurance is allowed to make, and if severance pay is not one if them, then you are free to accept the severance and continue collecting your disability benefits.

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I wish you the best in 2013,

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