March 21, 2017

Liberty Life Veterans Long Term Disability Litigation – Final Approval of Settlement Granted

Block & Leviton partner R. Joseph Barton is lead counsel in a lawsuit that challenges Liberty Life Assurance Company of Boston (“Liberty Life”)’s policy and practice of offsetting the benefits its group long-term disability plans for veterans of the United States Armed Forces by the amount of Veterans Disability Benefits they receive from the Department of Veterans Affairs (“VA”). The firm is proud to announce that a settlement in the case was finally approved.

The Lawsuit concerns group long-term disability plans administered by Liberty Life. These plans, offered through participants’ employers, provide income to employees in the event of disability. The plans allow for offsets of certain “other income” specified in the Plans’ policies.

The lawsuit alleges that Liberty Life improperly interprets the policy to deem Veterans Disability Benefits as “other income” under the plan, despite the policy of the plan making no specific reference to Veterans Benefits. The lawsuit also alleges that even if the terms of the policy itself permits such offsets, offsets of Veterans Benefits were insufficiently disclosed to participants and any offsets violate the Veterans Act. As a result, the lawsuit alleges that Liberty Life has improperly withheld payments of benefits owed to the disabled veterans in the class or improperly attempted to collect prior payments of those amounts.

The lawsuit also alleges that Hyundai Motor America (“Hyundai”) failed to establish the Hyundai Motor America Group Disability Income Plan pursuant to a written instrument, preventing participants and beneficiaries from being able to clearly understand their benefits or challenge any incorrect interpretation of them.

Pursuant to the settlement, Liberty Life agreed to stop reducing or offsetting LTD benefits by VA benefits under their current policies. While the agreement does not prevent Liberty Life from seeking regulatory approval of a new policy in the future that explicitly provides and discloses that future LTD policy to allow for an offset for VA benefits, Liberty Life will need to obtain such approval and explicitly disclose the offsets and nothing prevents a future challenge to those policies. For those class members who had VA offsets imposed, Liberty Life has agreed to pay 60% of the amount of LTD benefits offset by VA benefts to members of the Settlement Subclass.

Additionally, Liberty Life has agreed to incur any costs with notice or administration of the settlement. Finally, Liberty Life agreed to pay an additional $425,000 to Class Counsel as attorneys’ fees and expenses.

You can find out more and download case documents, including the settlement agreement and final approval order, on our case page.

Block & Leviton LLP
155 Federal Street, Suite 400
Boston, MA 02110
  • Mon 9am - 6pm
  • Tues 9am - 6pm
  • Wed 9am - 6pm
  • Thurs 9am - 6pm
  • Fri 9am - 6pm
  • Sat Closed
  • Sun Closed
Powered by RooSites