DOL Announces ERISA Disability Claims Handling Rules Will Go into Effect AS IS on April 1, 2018

by Marti Cardi, Esq. - Senior Compliance Consultant and Legal Counsel

& Gail Cohen, Esq. - Assistant General Counsel, Employment and Litigation

January 08, 2018


On Friday, January 5, 2018, the U.S. Department of labor issued a press release announcing that the Final Rule amending the regulations governing claims handling procedures for ERISA disability claims will go into effect on April 1, 2018, without changes from the original.  The Final Rule was originally issued by the DOL on December 16, 2016, with an effective date of January 1, 2018.  That effective date was postponed until April 1, 2018, in order to “solicit additional public input and examine regulatory alternatives” to the Final Rule.  The DOL accepted comments until December 11, 2017.   

The DOL press release states: 

The Department announced a 90-day delay of the applicability date of the final rule – from Jan. 1, 2018, through April 1, 2018 – to give stakeholders the opportunity to submit data and information on the costs and benefits of the final rule.   . . .

The information provided in the comments did not establish that the final rule imposes unnecessary regulatory burdens or significantly impairs workers’ access to disability insurance benefits.

We wrote in detail about the ERISA changes when the final Rule was first issued and provided suggestions for employer actions.  We urge you to read that post here.  Below we provide a brief recap of the changes.

  1. Independence and impartiality of claims adjudicators. Claims and appeals must
    be decided in a manner designed to ensure independence and impartiality of the
    persons involved in making the benefit determination. 
  2. Improvements to disclosure requirements. Benefit denial notices must contain the following:
  • A complete discussion of why the plan denied the claim and the standards
    applied in reaching the decision.
  • The basis for disagreeing with the views of health care or vocational
    professionals whose opinions were provided by the claimant or obtained at
    the behest of the plan.
  • The basis for disagreeing with a finding of “disability” by the Social Security
    Administration (SSA), if applicable.
  • The specific internal rules, guidelines, protocols, standards or other similar
    criteria of the plan relied upon in making the adverse determination or, alternatively,
    a statement that such guidelines etc. do not exist.
  • If the denial is based on a medical necessity or experimental treatment or similar
    exclusion or limit, either an explanation of the scientific or clinical judgment for the
    determination, or a statement that such explanation will be provided free of charge
    upon request.
  1. Claimant’s right to access entire claim file. An initial adverse benefits determination
    must contain a statement that the claimant is entitled to receive, upon request and
    without charge, the documents relevant to the claim for benefits.
  2. Notice of new or additional evidence or rationales before adjudication. A claimant
    must be notified of and provided an opportunity to respond to any new evidence or
    rationales developed by the plan during the pendency of the appeal.  However, the new
    regulations do not extend the time deadlines for the plan’s determination (45 days from
    the filing of the appeal, with a possible 45-day extension).
  3. Claimant is deemed to have exhausted administrative remedies if a plan fails to
    comply with claims procedure requirements.
    A claimant can seek court review of a
    claim denial based on a failure to exhaust administrative remedies under the plan if
    the plan failed to comply with the claims procedure requirements, unless a detailed
    exception applies.
  4. Expanded definition of “adverse benefit determination” that triggers
    appeals procedures.
    Under the new rule, rescissions of coverage, including retroactive
    terminations due to alleged misrepresentation of fact (e.g., errors in the application
    for coverage) must be treated as adverse benefit determinations, thereby triggering
    the plan’s appeals procedures.  Rescissions for non-payment of premiums are
    not covered by this provision.
  5. Notices and denials must be written in a “culturally and linguistically
    appropriate” manner.
    If a disability claimant’s address is in a county where 10
    percent or more of the population is literate only in the same non-English language,
    benefit denial notices must include a prominent statement in the relevant non-English
    language about the availability of language services.  Such services must include assistance
    with filing claims and appeals in the non-English language.  The plan must provide written
    notices in the applicable non-English language upon request.

What is Matrix Doing to Comply with the New Regulations?

Not to worry – Matrix’s disability claims handling procedures will embrace the new rules and will
continue to be best in class!  We will be ready to administer our clients’ disability plans in compliance
with the new regulations by April 1, 2018.  Indeed, we originally marched toward the January 1, 2018,
compliance date. 

If you have questions, please contact your account manager or practice leader, or send us an email at [email protected].