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.
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.
Section 503 of ERISA requires every employee benefit plan to:
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.
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:
On Nov. 24, 2017, the DOL delayed the applicability of the final rule by 90 days—until April 1, 2018. According to the DOL, after the final rule was published, concerns were raised that its new requirements would impair workers’ access to these benefits by driving up costs. The DOL concluded that, consistent with President Donald Trump’s policy on alleviating unnecessary regulatory burdens, it was appropriate to give the public an additional opportunity to submit comments on the potential impact of the final rule.
On Jan. 5, 2018, the DOL announced that the final rule will take effect on April 1, 2018, without any changes. According to the DOL, it received over 200 letters from stakeholders regarding the final rule. However, the information it received did not establish that the final rule imposes unnecessary regulatory burdens or significantly impairs workers’ access to disability insurance benefits.