Opinion ID: 629015
Heading Depth: 2
Heading Rank: 2

Heading: The Reimbursement Agreement

Text: 19 The district court found the reimbursement agreement was not supported by consideration. The court reasoned the defendants had no right to reduce Mr. Anweiler's disability benefits prior to his actual receipt of any social security benefits under the AEP disability plan. Thus when Aetna promised in the agreement to postpone making any reduction in the amount of disability benefits until Mr. Anweiler actually received any social security benefits, it was not promising anything at all. Therefore, Mr. Anweiler's designation of Aetna as the beneficiary of his life insurance policy pursuant to the agreement was not supported by consideration. 20 The AEP disability plan states: The amount of monthly income benefit payable under this policy for a given monthly period of total disability shall be 50% of the employee's monthly rate of basic earnings if no other income benefits are payable for the given monthly period. If other income benefits are payable, the 50% owed under the plan shall be reduced by that amount. Disability benefits received under the Social Security Act are considered income benefits. The question is whether benefits which are payable include those benefits which the employee is entitled to although he or she has not yet filed for them, or whether the benefits are payable only when actually received. Aetna claims it had the right to reduce Mr. Anweiler's benefits by the estimated amount he would have been entitled to as social security benefits. The most humane thing to do, Aetna claims, however, is to pay the full 50% benefits under its plan and later seek reimbursement or an offset because of any other benefits later received. 21 Other courts examining similar disability plans have found the insurance companies did have the right to offset benefits by the amount of social security benefits which the insured was entitled to, although maybe not actually receiving. In all cases, however, the plans' language specified reductions would be made for social security benefits received or those which the insured is entitled to receive. Stuart v. Metropolitan Life Ins. Co., 664 F.Supp. 619 (D.Me.1987); Barklage v. Metropolitan Life Ins. Co., 614 F.Supp. 51 (W.D.Mont.1985); O'Connell v. Prudential Ins. Co., No. 82-3078, 1984 U.S.Dist.LEXIS (D.Mass. Nov. 15, 1984). 22 While the AEP disability plan does not state that benefits will be offset by other benefits which the insured is eligible for, the words are payable may indicate just that. An affidavit from an account specialist at Aetna states: an individual's monthly benefit under the [disability plan] shall be reduced as a result of his receipt of or entitlement to other sources of income, including social security benefits. We, therefore, disagree with the district court's conclusion and find the agreement was supported by consideration.