ACA News & Publications

ACA Pathways: DOL Delays New Requirements For Disability Benefit Claims

December 05, 2017

The Department of Labor (DOL) has delayed the effective date of a final rule until April 1, 2018 (https://www.gpo.gov/fdsys/pkg/FR-2016-12-19/pdf/2016-30070.pdf) to strengthen the claims and appeals requirements for disability benefit plans that are subject to the Employee Retirement Income Security Act (ERISA). The rule, released by the DOL on December 16, 2016, had initially been scheduled to apply to claims filed on or after January 1, 2018.

According to the DOL, the rationale for the 90-day delay is to address concerns that the final rule will impair workers' access to disability benefits by driving up costs and increasing litigation. During the delay, the DOL will review the final rule to determine whether it is unnecessary, ineffective or imposes costs that exceed its benefits, consistent with the President's executive order earlier this year on reducing regulatory burdens.

Summary of the Final Rule

The new rules would provide additional protections for disability claims similar to protections provided for health care claims under the Affordable Care Act. They would not apply to self-funded arrangements that are considered "payroll practices," in which the employer merely continues the salary of the employee while disabled. They would only apply to disability plans that are subject to ERISA (for example, plans where an insurer pays the benefits to the claimants). The final rule includes the following requirements for the processing of claims and appeals for disability benefits:

  • Additional disclosure requirements for benefit denial notices
  • Right to obtain entire claim file and internal protocols used in denying a claim
  • Right to review and respond to new information before a final decision
  • Independent and impartial claims and appeals adjudication free of conflicts of interest
  • Rescissions of coverage generally subject to the claims and procedures' rules
  • Notices to be written in a culturally and linguistically appropriate manner

Action Steps

Sponsors of ERISA plans that include disability benefits should continue to monitor the status of the final rule. If the new requirements take effect, entities that administer disability claims will be required to provide new procedural protections to disability claimants.

For More Information
For more information about this ACA Pathways or about any other health care reform-related provisions, please contact your Burnham Benefits consultant or Burnham Benefits at:

Burnham Benefits
949.833.2983
inquiries@burnhambenefits.com


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