DOL Issues Final Regulations on Claims Procedure for Plans Providing Disability Benefits

On Dec. 16, 2016, the DOL published final regulations concerning claims procedure for plans providing disability benefits. As background, in November 2015, the EBSA proposed regulations related to disability plan claims procedures (covered in the Nov. 17, 2015, edition of Compliance Corner). The proposed regulations were written to amend ERISA’s rules to better align them with PPACA’s internal claims appeal rules for health plans.

The final regulations are very similar to the proposed regulations in that they require more detailed disclosures and notices, independence and impartiality of those persons making the decision on disability benefits claims, deemed exhaustion of claims and appeals if plans do not adhere to the claims processing rules, the treatment of rescissions as adverse benefit determinations, and culturally and linguistically appropriate notices.

Some notable changes from the proposed regulations include the following:

  • The list of examples of persons involved in the decision-making process who must be insulated from the plan’s conflicts of interest has been modified to expressly include vocational experts along with claims adjudicators and medical experts.
  • The final rule clarifies that adverse benefit determinations must contain a discussion of the basis for disagreeing with the views of medical or vocational experts whose advice was obtained on behalf of the plan in connection with a claimant’s adverse benefit determination, without regard to whether the advice was relied upon in making the benefit determination.
  • The final rule requires notices of adverse benefit determinations on review to include a description of any applicable contractual limitations period and its expiration date.

The final regulation will be effective 30 days following the Dec. 19, 2016, publication. The improvements in the claims procedure process are generally applicable to disability benefit claims submitted on or after Jan. 1, 2018.

Plan sponsors involved in the adjudication of disability claims should review these regulations to implement the new procedures in a timely manner.

Final Rule »
Fact Sheet »