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Hannington v. Sun Life & health Ins. Co.

As many recipients of disability benefits know, insurance companies will require you to file for social security benefits in order to offset the amount it may owe to you in benefits. Essentially, the insurance company gets a credit for this “other income.” A recent decision from the First Circuit, styled Hannington v. Sun Life & Health Ins. Co., issued (March 29, 2013) found that Sun Life could not reduce a participant's benefits under the ERISA governed Plan, even though he was also receiving veterans benefits. On appeal, the First Circuit upheld the district court’s decision and held: Sun Life’s decision to offset Plaintiff’s service-connected disability compensation (VA benefits) was governed entirely by its interpretation of several statutes, the district court ought to have reviewed de novo Sun’s determination that Plaintiff’s VA benefits were “other income” under the plan; and (2) Plaintiff’s VA benefits were not “other income” for purposes of reducing the payment Sun owed Plaintiff under the Plan. In essence, the Plan administrator was not entitled to any deference in its interpretation and the district court and appeals court reviewed the question on their own without any presumption in favor of the plan administrator. If you or a loved one have an issue with an insurance company attempting to offset or reduce your monthly benefit, feel free to contact the lawyers at Burke Harvey & Frankowski.