Protections for applicants for disability insurance benefits or other benefits based on disability against inappropriate offsets against benefits under private disability insurance coverage

(a)

In general

Section 221 of the Social Security Act (42 U.S.C. 421) is amended by adding at the end the following new subsection:

(n)(1)At the time at which an insurance issuer takes any action in connection with private disability insurance coverage provided by the issuer which constitutes a presumed entitlement benefit reduction, the issuer shall certify to the Commissioner, in such form and manner as may be prescribed by the Commissioner, that the issuer has determined that there is reasonable cause to assume that the individual is under a disability (as defined in section 223(d)) and is, or upon application would be, entitled to disability insurance benefits under section 223, or child’s, widow’s, or widower’s insurance benefits under section 202 based on disability. Such certification shall include a statement (meeting such requirements as the Commissioner may prescribe) in support of the issuer’s determination. (2)For purposes of this subsection, an action taken in connection with private disability insurance coverage constitutes a presumed entitlement benefit reduction to the extent that such action has the effect of reducing the benefits under such coverage of any individual covered under such coverage by reason of a failure by such individual— (A)to apply for disability insurance benefits under section 223, or child’s, widow’s, or widower’s insurance benefits under section 202 based on disability, or (B)to timely request a hearing under subsection (d) (or an administrative review prior to such a hearing) with respect to such benefits. (3)The Commissioner shall include in any application form for applying for benefits under section 223, or child’s, widow’s, or widower’s insurance benefits under section 202 based on disability, and any application form for applying for a hearing under subsection (d) (or administrative review prior to such a hearing) relating to such benefits, a question regarding whether the applicant has been requested by an insurance issuer offering private disability insurance coverage, or any other person on behalf of such issuer, to file the application. (4)For purposes of this subsection— (A)The term private disability insurance coverage means disability insurance coverage offered in the private sector by an insurance issuer. (B)The term disability insurance coverage means cash benefits provided to individuals in the event of disability or physical or mental impairment (as defined in the terms of the policy under which such coverage is provided) under a policy, certificate, or contract offered by an insurance issuer. (C)The term insurance issuer means an insurance company, insurance service, or insurance organization which is licensed to engage in the business of insurance in a State and which is subject to State law which regulates insurance.

(b)

Penalties

Section 208(a) of such Act (42 U.S.C. 408(a)) is amended by inserting or at the end of paragraph (8), and by inserting after paragraph (8) the following new paragraph:

(9)willfully, knowingly, and with intent to deceive the Commissioner of Social Security— (A)furnishes or causes to be furnished false information in a certification required under section 221(n)(1); or (B)fails to timely provide such certification;

(c)

Effective date

The amendments made by this section shall apply with respect to private disability insurance coverage for periods beginning on or after January 1, 2011.