When ERISA Lets Your Insurer Withhold Disability Benefits to Recoup a Social Security Overpayment: A New York Federal Court Upholds Hartford’s Offset

In Doolittle v. Hartford Life and Accident Insurance Company, No. 1:25-cv-00148 (BKS/CBF), 2026 WL 3135297 (N.D.N.Y. Oct. 20, 2026), Chief U.S. District Judge Brenda K. Sannes granted summary judgment to Hartford and upheld its withholding of long-term disability benefits to recover an overpayment created by a retroactive Social Security award, dismissing the participant’s ERISA claim. Plaintiff, a former employee of a motor freight company who received LTD benefits after a motor vehicle accident, argued that Hartford had wrongfully denied him benefits under ERISA § 502(a)(1)(B) by withholding payments “with no consistent calculation or documented rationale.” The court disagreed and found the recoupment both authorized by the plan and supported by the record.

What standard of review applied to Hartford’s decision?

Because the Policy gave Hartford “full discretion and authority to determine eligibility for benefits and to construe and interpret all terms and provisions of the Policy,” the court reviewed the decision under the deferential arbitrary and capricious standard rather than de novo, consistent with Firestone Tire & Rubber Co. v. Bruch. Under that standard, a court may overturn a benefits decision only where it was without reason, unsupported by substantial evidence, or erroneous as a matter of law.

Could Hartford withhold LTD benefits to recover a Social Security overpayment?

Yes. When Plaintiff became eligible for benefits, he signed a Payment Options and Reimbursement Agreement and chose Option B, which directed Hartford to pay his full monthly LTD benefit with no reduction for Social Security and acknowledged that this choice could produce an overpayment he would have to refund. Plaintiff’s Social Security Disability application was initially denied, but on appeal the Social Security Administration found him disabled and issued a retroactive award. That award triggered the Policy’s Other Income Benefits offset and created an overpayment. The court explained that courts in the Second Circuit routinely enforce Social Security offset provisions and reimbursement agreements of this kind, citing Schlenger v. Fidelity Employers Services Co., LLC, Mugan v. Hartford Life Group Insurance Co., and Leonelli v. Pennwalt Corp. The Policy and the Reimbursement Agreement together entitled Hartford to recover the overpayment by offsetting it against future LTD benefits.

Did Hartford’s shifting overpayment calculations make the decision arbitrary and capricious?

No. Plaintiff’s central argument was that Hartford’s overpayment figures changed over time and included acknowledged errors. The court found that the balance necessarily decreased as Hartford recouped the overpayment through monthly withholding and applied credits, so a declining figure reflected ordinary accounting rather than inconsistency. Hartford acknowledged one typographical error in its original calculation, which it promptly corrected and credited back. Reviewing the documents Plaintiff cited, the court found each one consistent with a balance that fell as benefits were withheld. The court identified only a single genuine discrepancy, Hartford’s decision to credit $6,000 for attorney’s fees where the Administration had initially withheld twenty-five percent of the retroactive award, and it resolved that point in Hartford’s favor because $6,000 was the maximum attorney’s fee the Administration allowed at the time. Other deviations, the court noted, stemmed from Hartford underestimating Plaintiff’s Social Security benefits, which worked in Plaintiff’s favor rather than against him. Quoting the Supreme Court’s observation in Conkright v. Frommert that “People make mistakes. Even administrators of ERISA plans,” the court held that neither a steadily declining balance nor a promptly corrected typo showed that Hartford acted arbitrarily. By the time of the decision, Hartford had recouped the overpayment in full, issued Plaintiff a small refund, and resumed his monthly LTD payments.

What happened to the claims Plaintiff raised for the first time at summary judgment?

The court declined to reach them. Plaintiff’s summary judgment papers asserted a document-disclosure claim under ERISA § 104(b)(4) and a state law claim for intentional infliction of emotional distress, neither of which appeared in his original or amended complaint. The court explained that it generally will not consider claims raised for the first time in opposition to summary judgment, and that the administrative record was complete on Plaintiff’s sole remaining claim. It therefore refused to allow a belated § 104(b)(4) claim after the time to amend had expired, and it declined to exercise supplemental jurisdiction over the emotional distress claim. The court granted Hartford’s motion, denied Plaintiff’s, and dismissed the amended complaint.