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Troiano v. Aetna Life Insurance Company

Troiano v. Aetna Life Insurance Company, No. 16-1307 (1st Cir. 2016), involved a disability insurance claimant who was approved by an ERISA Plan Administrator, Aetna, for monthly disability benefits. However, the parties disputed how benefits should be calculated. A provision within the Aetna Disability Plan allowed Aetna to offset the amount of Social Security disability income ("SSDI") benefits the claimant received from the Social Security Administration ("SSA") from the benefits Aetna paid the claimant on a monthly basis. The claimant argued that the provision only allowed Aetna to deduct the net (post-tax) amount. Aetna argued it was permitted to offset the higher, gross (pre-tax) amount. The district court ruled that Aetna's interpretation of the disability Plan language was reasonable and entitled to deference. The First Circuit Court of Appeals upheld the district court's rulings, noting that the dispute was not about whether the claimant's SSDI benefits could offset the monthly Aetna disability payments, but whether the administrator may use the higher, gross amount of the SSDI payments for offset purposes.

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