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– Bill B.
New regulations for long-term disability claims
On April 1, 2018, the Department of Labor’s new regulations governing claims for disability benefits under ERISA will take effect.
The new rule was created to provide new protections to workers for dealing with insurers and plan administrators when their claims for disability benefits are denied.
This action ensures that disability claimants will receive a full and fair review of their claims, as required by ERISA section 503. This final rule will promote fairness and accuracy in the claims review process and protect participants and beneficiaries in ERISA-covered disability plans. The rule will help many disabled individuals avoid financial and emotional hardship by ensuring that they receive benefits that otherwise might have been denied by plan administrators, without the fuller protections provided by this final regulation.
All plans subject to ERISA are affected by the new Rule including:
The Department of Labor announced the rule in December 2017 to take effect after January 1, 2018, but the rule was delayed by 90 days to allow the Department of Labor to consider objections by employers and insurers who contended the new procedures would increase disability plan costs and increase litigation.
In the end, the rule was not changed and strict compliance with the new procedures is required. If a plan fails to follow the new requirements, the claimant will be deemed to have exhausted his or her administrative remedies and may file suit against the plan on the basis that the plan did not provide a reasonable claims procedure.
If you have been denied disability benefits don’t give up! Contact a Disability lawyer at 512-454-4000 for a free consultation and get the benefits you deserve.
Specifically, the rule provides the following improved procedures for processing disability benefit claims and appeals:
- Improvement to Basic Disclosure Requirements. If a claim is denied, the claimant must receive a clear explanation of why the claim was denied as well as the standards and other criteria used to reach the determination.
- Right to Claim File and Internal Protocols. Claim denials must include a notice that the claimant has a right to a complete copy of their file. The denial must also include a copy of the protocol used in denying the claim including internal guidelines, standards, and other criteria, or a statement saying none were used.
- Right to Review and Respond to New Information Before Final Decision. A plan may not deny benefits on appeal based on new or additional evidence that was not included when the benefit was denied at the claims stage unless the claimant is given notice and a fair opportunity to respond.
- Avoiding Conflicts of Interest. A claims adjudicator cannot be hired, promoted, terminated or compensated based on the likelihood of denying claims.
- Deemed Exhaustion of Claims and Appeals Process. Plans cannot prohibit a claimant from seeking court review of a claim denial based on a failure to exhaust administrative remedies under the plan if the plan fails to comply with the claims procedure requirements unless the violation was the result of a minor error.
- Certain Coverage Rescissions are Adverse Benefit Determinations Subject to the Claims Procedure Protections. Certain withdrawals of coverage shall be treated as adverse benefit determinations (denials) triggering a plan’s appeals procedures. Rescissions for non-payment of premiums is not covered under this provision.
- Notices Written in a Culturally and Linguistically Appropriate Manner. This provision adopts the ACA standard for group health benefits notices and provides that claim denials and appeal denials may need to include a statement in a non-English language regarding the availability of language assistance.
By instituting these new requirements, the Department of Labor has acknowledged that the old ERISA rules are inadequate from a claimant’s perspective.
“…[group] disability cases dominate the ERISA litigation landscape today. …Insurers and plans looking to contain disability benefit costs may be motivated to aggressively dispute disability claims. Concerns exist regarding conflicts of interest impairing the objectivity and fairness of the process for deciding claims for group health benefits.” All this is good news as the new regulations will provide new layers of protection for short-term and long-term disability claimants.
Disability benefits are an important source of income for those who are unable to work. If you not able to work due to accident or illness, you may be eligible for Long-term Disability or Social Security Disability benefits. If you have applied for benefits and been denied, contact the attorneys at Bemis, Roach and Reed for a free consultation. Call 512-454-4000 and get help NOW.
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