DOL Proposes to Strengthen Claims
Procedures for Disability Benefits
Provided by Kistler Tiffany Benefits
• The ACA requires health plans to comply with strict • The proposed rule would revise and
requirements for determining benefit claims and
strengthen existing claims procedures for
adjudicating appeals.
disability benefits to make them more
consistent with the ACA’s requirements for
• According to the DOL, disability benefit claimants
health benefits.
deserve the same claims procedures protections.
The proposed rule
would amend the
DOL’s claims
procedure
regulations for
ERISA plans in
order to provide
stronger
protections for
disability benefit
claimants.
On Nov. 18, 2015, the Department of Labor
(DOL) issued a proposed rule to strengthen the
claims and appeals requirements for plans that
provide disability benefits.
Because disability and lost earnings can create
severe hardships for individuals, the DOL
believes that disability benefit claimants
deserve protections as stringent as those that
apply to health care claimants.
The DOL will accept comments on the
proposed rule until Jan. 19, 2016, and may
make changes to the proposed rule before it is
finalized. The new guidance on disability
benefit claims procedures is expected to take
effect 60 days after it is issued in final form.
Disability Benefits
For purposes of the proposed rule, a benefit is
considered a “disability benefit” if the claimant
has to be disabled in order to obtain the
benefit. It does not matter how the benefit is
characterized or whether the plan as a whole is
a pension plan or a welfare plan. If the claims
adjudicator must make a determination of
disability in order to decide a claim, the claim
must be treated as a disability claim for
purposes of the DOL’s claims procedures.
ERISA Claims Procedures
Section 503 of ERISA requires every employee
benefit plan to:
 Provide adequate notice in writing to any
participant or beneficiary whose claim for
benefits under the plan has been denied,
setting forth the specific reasons for the
denial, written in a manner calculated to be
understood by the participant; and
 Afford a reasonable opportunity to any
participant whose claim for benefits has
been denied for a full and fair review by
the appropriate named fiduciary of the
decision denying the claim.
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. In July 2010, the DOL published
This Compliance Bulletin is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.
.
an interim final rule on the ACA’s enhanced
claims procedures for group health plans. The
DOL issued a final rule on the ACA’s claims
procedure requirements on Nov. 18, 2015—
the same time it issued the proposed rule on
disability benefit claim procedures.
Additional Protections for Disability Benefit
Claimants
According to the DOL, even though fewer
private-sector employees participate in
disability plans than in other types of plans,
disability cases “dominate the ERISA litigation
landscape today.”
Aging workers initiate more disability claims, as
the prevalence of disability increases with age.
As a result, insurers and plans looking to
contain disability benefit costs often
aggressively dispute disability claims. This
aggressive position, coupled with the
inherently factual nature of disability claims,
motivated the DOL to propose strengthening
the claims procedure requirements for
disability benefit claims.
The proposed rule would extend the ACA’s
procedural requirements for health care
claimants to disability benefit claimants. These
requirements include provisions that seek to
ensure that:
 Claims and appeals are adjudicated in
manner designed to ensure independence
and impartiality of the persons involved in
making the decision;
 Benefit denial notices contain a full
discussion of why the plan denied the claim
and the standards behind the decision;
 Claimants have access to their entire claim
file and are allowed to present evidence
and testimony during the review process;
 Claimants are notified of and have an
opportunity to respond to any new
evidence reasonably in advance of an
appeal decision;
 Final denials at the appeals stage are not
based on new or additional rationales
unless claimants are first given notice and a
fair opportunity to respond;
 If plans do not adhere to all claims
processing rules, the claimant is deemed to
have exhausted the administrative
remedies available under the plan, unless
the violation was the result of a minor error
and other specified conditions are met;
 Certain rescissions of coverage are treated
as adverse benefit determinations, thereby
triggering the plan’s appeals procedures;
and
 Notices are written in a culturally and
linguistically appropriate manner.
Source: DOL, Employee Benefits Security
Administration (EBSA)