In December 2016, the U.S. Department of Labor (DOL) published a final rule in the Federal Register setting down new procedures for employee benefit plans where benefits are conditional upon a participant’s disability status.
The new regulations add procedural safeguards to the disability claims and appeals procedures plan participants follow when dealing with providers and fiduciaries that deny their claims. Plans subject to the Employee Retirement Income Security Act (ERISA) were required to comply as of April 1, 2018, if any plan benefits are paid based on disability.
The DOL issued an overview of the rules for claims and appeals of disability benefits. Regulatory changes listed include:
- Benefit denial notices must clearly explain why the claim was denied and what standards, rules, protocols, guidelines or other criteria were used in making the determination, or the notice must contain a statement that there were none.
- Benefit denial notices must inform the claimant that they are entitled to request and receive the claim file and any relevant documents.
- Claimants must be notified that they have the right to appeal a denial and review any information the plan used to make the decision.
- Plans must ensure that claims and appeals processes are adjudicated by impartial, independent parties, including vocational and medical experts.
- Claimants may file suit if plans do not comply with all claims processing rules.
- Notices must use “culturally and linguistically appropriate” language, in a similar manner to how group health benefit notices must be issued.
SHRM Articles Ready or Not, New Disability Claims Procedures Took Effect April 1 and DOL’s Final Rule on Disability Claims Procedures to Take Effect April 1 by Stephen Miller, CEBS