In December 2016, the U.S. Department of Labor (DOL) announced new disability claims procedure regulations, effective April 1, 2018, for ERISA-covered plans. The new rules apply to all ERISA benefit plans that base any benefit decisions on the plan administrator’s determination of whether a person is “disabled.”
The rule applies to more than just disability plans
The new procedures also apply to retirement plans and non-qualified deferred compensation plans that provide disability benefits, but only if the plan’s definition of disability requires the plan administrator to make an independent determination that the participant is disabled. The new procedures don’t apply, if, instead, the plan ties its definition of disability to a disability determination made by the Social Security Administration, the new procedures don’t apply.
What do the new disability claims procedures require?
The new rules require that:
- The determination as to whether a claimant is disabled be made by a person who is impartial and independent;
- Notices be written in a culturally and linguistically appropriate manner;
- Claimants be given timely access to their entire claim file upon request, and the opportunity to present evidence and testimony in support of their claim during the review process; and
- Denial notices explain completely why the benefit claim was denied and provide claimants adequate time and notice to respond to the denial.
Steps to take now
Although the new rules became effective on April 1, 2018, it’s not too late to amend your ERISA-covered plans to comply with these requirements, particularly if your plans are administered on an annual basis. If you haven’t previously reviewed your applicable plans for compliance with these rules, here are some steps you should take now:
- Review your ERISA plan document provisions to determine if the new rules apply.
- Review your disability claims administrative procedures to determine if any changes are needed.
- Amend your plans and summary plan descriptions as necessary.
- Make sure your benefits administrators are complying with the new requirements.
Also ensure that any claims for disability benefits filed since April 1, 2018, comply with the new disability claims procedures. If they don’t, a claimant whose disability claim was denied will be able to avoid the internal claims-review process and seek court review of the denial directly.
If you’re not sure whether your plans comply, please email us at email@example.com.