DOL’s Final Rule on Disability Claim Procedures

I’ve been keeping my eye on movement here for well over a year and after some delay, the Department of Labor (DOL) issued final regulations amending the existing claim procedures for ERISA-governed plans providing disability benefits. The DOL is looking to provide needed protections for American workers, and any disability claims filed on or after April 1, 2018 will have to adhere to the new regulations – so now’s the time to get on track and in compliance.

The major disability insurance carriers have been gearing up in anticipation of the final ruling and will make some important adjustments to their claim process. Here’s a look at some of the key highlights:

  • Denial letters will give timely notice to the claimant that they’re entitled to a copy of her/his entire claim file upon request and disclose any internal rules or guidelines the claim administrator used in deciding the claim.
  • An adverse benefit determination must discuss the basis for disagreeing with the views of medical or vocational experts whose advice was obtained on behalf of the plan in connection with a claimant’s adverse benefit determination, without regard to whether the advice was relied upon in making the benefit determination.
  • An adverse benefit determination on review must include a description of any applicable contractual limitations period the plan places on a participant filing a lawsuit and provide an actual calendar expiration date for filing suit.
  • Adjudicators may not be incentivized to deny disability claims to ensure impartiality.
  • Disability plans will provide culturally and linguistically appropriate notices for claimants with an address in a county where 10% or more of the population is literate in the same non-English language.
  • Before a final adverse claim decision is made on an appeal, the claimant must be given any new information or reasoning developed during the appeal with an opportunity to review this information and respond to it.

The compliance burden will ultimately fall onto human resources teams across the country. Employers should verify that their carriers or administrators are complying with the new DOL regulations, discuss how to apply and document the new procedures, and make any necessary changes to plan SPDs, certificates or other relevant plan documents. Frenkel account executives are up-to-speed and prepared to assist.

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