disability insurance claim form

New Rules for Disability Claims Take Effect on April 1, 2018

Click Here to Download: New Rules for Disability Claims Take Effect on April 1, 2018

On Jan. 5, 2018, the Department of Labor (DOL) announced that, effective April 1, 2018, employee benefit plans must comply with new requirements for disability benefit claims.

In 2016, the DOL released a final rule to strengthen the claims and appeals requirements for plans that provide disability benefits and are subject to the Employee Retirement Income Security Act (ERISA). The final rule was scheduled to apply to claims that are filed on or after Jan. 1, 2018. However, on Nov. 24, 2017, the DOL delayed the final rule for 90 days—until April 1, 2018—to give stakeholders the opportunity to submit comments on the final rule’s benefits and costs.

According to the DOL, the information it received during the delay period did not justify modifying or rescinding the final rule. Thus, the final rule will take effect without change.

ACTION STEPS

ERISA plans that include disability benefits must comply with the new procedural protections, effective for claims that are submitted after April 1, 2018. Entities that administer disability benefit claims, including issuers and third-party administrators, will need to revise their claims procedures to comply with the final rule.

ERISA Requirements

Section 503 of ERISA requires every employee benefit plan to:

  • Provide adequate notice in writing to any participant or beneficiary whose claim for benefits under the plan has been denied, setting forth the specific reasons for the denial, written in a manner calculated to be understood by the participant; and
  • Afford a reasonable opportunity to any participant whose claim for benefits has been denied for a full and fair review by the appropriate named fiduciary of the decision denying the claim.

The DOL first adopted claims procedure regulations for employee benefit plans in 1977. In 2000, the DOL updated its claims procedure regulations by improving and strengthening the minimum requirements for employee benefit plans, including plans that provide disability benefits. Effective for plan years beginning on or after Sept. 23, 2010, the Affordable Care Act (ACA) amended ERISA to include enhanced internal claims and appeals requirements for group health plans.

Additional Protections for Disability Claimants

The final rule requires that plans, plan fiduciaries and insurance providers comply with additional procedural protections when dealing with disability benefit claimants. The final rule includes the following requirements for the processing of claims and appeals for disability benefits:

  • Improvement to Basic Disclosure Requirements: Benefit denial notices must contain a more complete discussion of why the plan denied a claim and the standards used in making the decision.
  • Right to Claim File and Internal Protocols: Benefit denial notices must include a statement that the claimant is entitled to receive, upon request, the entire claim file and other relevant documents. Benefit denial notices also have to include the internal rules, guidelines, protocols, standards or other similar criteria of the plan that were used in denying a claim, or a statement that none were used.

Contact us here or call our office if you have any questions or concerns about this new procedure.