DOL Announces April 1, 2018 as Final Applicability Date for Revised ERISA Claims Procedures Related to Disability Benefits
In a news release issued earlier this month, the U.S. Department of Labor (“DOL”) announced its final decision to make significant changes to the ERISA claims procedures related to disability benefits applicable to claims filed after April 1, 2018. As previously advised, the DOL published final regulations on December 19, 2016 revising the existing claims and appeals procedures regulations under ERISA for employee benefit plans providing disability benefits (“Final Regulations”). According to the DOL, the intent of the Final Regulations is to strengthen the current procedures by adopting some of the additional procedural safeguards and protections for disability plan claims that are already in place for group health plan benefits pursuant to the Patient Protection and Affordable Care Act.
The Final Regulations were scheduled to apply to all disability benefits claims filed on or after January 1, 2018. However, on November 29, 2017, the DOL published another final rule delaying the applicability date of the Final Regulations for 90 days (through April 1, 2018). According to the DOL, the delay was necessary to enable the DOL to consider comments and data as part of its effort, pursuant to one of President Trump’s executive orders, to examine regulatory alternatives that meet its objectives of ensuring the full and fair review of disability benefit claims while not imposing unnecessary costs and adverse consequences and to determine whether the substantive provisions of the Final Regulations should be rescinded, modified, or retained.
The January 2018 news release confirms that the substantive provisions of the Final Regulations will be retained: “The Department received approximately 200 comment letters from the insurance industry, employer groups, consumer advocates, and lawyers representing disability benefit claimants, all of which are posted on the Department’s website. Only a few comments responded substantively to the Department’s request for quantitative data to support assertions that the final rule would drive up disability benefit plan costs by more than the Department had predicted, cause an increase in litigation, and consequently reduce workers’ access to disability insurance protections. 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.” Accordingly, the substantive provisions of the Final Regulations will apply to disability benefits for claims filed “after April 1, 2018.”
With the April 1, 2018 applicability date quickly approaching, it is imperative for employers to work with their insurance carriers, third party administrators, and attorneys to ensure that all underlying disability plans/benefits and associated documentation (including any ERISA wrap plans, Code section 125 cafeteria plans, and claims denial forms) are reviewed and updated to ensure legal compliance with the requirements for claims filings beginning after April 1, 2018.
- The EBSA New Release can be found at: www.dol.gov/newsroom/releases/ebsa/ebsa20180105
- The Final Rule Delaying the Applicability Date (published 11/29/17) can be found at: https://www.federalregister.gov/documents/2017/11/29/2017-25729/claims-procedure-for-plans-providing-disability-benefits-90-day-delay-of-applicability-date\
- The Final Rule for Claims Procedures for Plans Providing Disability Benefits (published 12/19/16) can be found at: https://www.federalregister.gov/documents/2016/12/19/2016-30070/claims-procedure-for-plans-providing-disability-benefits
For highlights of the substantive provisions of the Final Regulations, please see our May 11, 2017 alert, http://www.fraserlawfirm.com/blog/2017/05/action-required-before-year-end-disability-plans-claims-and-appeals-procedures, or contact us.
Questions? Email Beth Latchana
Elizabeth H. Latchana specializes in employee health and welfare benefits. Recognized for her outstanding legal work, in both 2018 and 2015, Beth was selected as “Lawyer of the Year” in Lansing for Employee Benefits (ERISA) Law by Best Lawyers, and in 2017 as one of the Top 30 “Women in the Law” by Michigan Lawyers Weekly. Contact her for more information on this reminder or other matters at 517.377.0826 or elatchana@fraserlawfirm.com.