As reported in our December 2017 Comp & Benefits Alert, the Department of Labor had extended the effective date of the new regulations for disability claims until April 1, 2018. On January 5, 2018, the DOL announced that there would be no further extensions. Thus, now is the time to review plans, revise claims procedures, revise summary plan descriptions, prepare or edit appeal forms, and confirm that plan administrators are ready to handle disability claims in accordance with the new ERISA rules.
Plans to Review
Disability. All insured disability plans, long term disability and short term disability, need to comply with the new rules. If your plan is administered by a third party administrator (TPA) or insurer, you need to confirm with the TPA or insurer that they have revised the disability policy and claims procedures to comply with the new rules. If you sponsor a self-funded disability plan that is an ERISA plan, you will need to revise the plan and its claims procedures. If your disability plan is a payroll practice not subject to ERISA – typically short term disability programs – it is not subject to the new rules.
Other. ERISA plans are subject to the new rules if benefits are triggered by a determination of disability unless the disability determination is made by a third party or relies on a Social Security determination of disability. These plans can include:
- 401(k) plans
- Pension/retirement plans
- Group health/medical plans
- Severance plans
- Nonqualified deferred compensation plans
Steps to Take
The new rules make changes or improvements in numerous aspects of the basic ERISA claims procedures, including:
- Independent, impartial adjudication procedures
- Full disclosure of reasons for denials
- Claimant access to all relevant documents
- Opportunity to respond to new evidence during appeals
- Appeal rights triggered by rescissions
- “Culturally and linguistically appropriate” language for notices
Plan documents and summary plan descriptions need to incorporate the changes.
The new rules apply to disability claims filed on or after April 1, 2018. In transition, you should consider how your plan defines when a claim is filed and whether your plan has a procedure to date stamp receipt of claims and notices.