New ERISA Regulations for Disability Benefits

Late last year, the Department of Labor’s Employee Benefits Security Administration (EBSA) published its final regulations regarding the ERISA process that will affect all claims for benefits filed after the 1st of January, 2018.

Applicability of the New Regulations

The new rules apply to all ERISA-qualifying plans that provide disability benefits, including short-term and long term disability plans. The regulations also apply to any other plans that condition the availability of benefits upon the plan’s determination that the participant is disabled, such as 401(k) plans and pension plans. However, the regulations will not apply if a pension plan provides a benefit conditioned upon disability, but the finding is made by someone other than the plan, such as the Social Security Administration for purposes other than determining benefits under the plan.

Claim Denials

The new regulations add certain regulations to the application process for benefits under ERISA. For instance, the regulations make clear that claims and appeals need to be determined impartially and independently and that administrators should not be encouraged to issue a denial of claims. This means that administrators are prohibited from:

• Offering bonuses to adjudicators based on how many denials they make; and
• Working with a medical expert because of his or her reputation for affecting the outcome of cases.

When issuing denial letters, adjudicators are also required to include specific information, such as:

• An explanation regarding why the adjudicators disagreed with the views of professionals or with disability decisions made by the SSA;
• Notice about the claimant’s rights to access his or her file; and
• Any internal rules that the adjudicators relied upon in making their determination.

Finally, denial letters must be appropriate based on culture and linguistics, which could require administrators to take the following steps:

• Issue letters in a different language upon request; and
• Include a statement in denial letters in the predominant language of the recipient that language services are available.

Appeal Denials

The regulations also address changes to the appeals process. For instance, if a denial is based on new evidence, claimants are required to be provided notice and a reasonable opportunity to issue a response before an appeal can be denied. Letters for a denied appeal must also include information about any time limits involved with filing a lawsuit, such as the date that the limitation period expires. Furthermore, claimants will now no longer be barred from filing a claim in court because they failed to exhaust the plan’s internal claims procedures, but only if the plan itself did not comply with its procedures. However, this is only true for major failures. Finally, retroactively rescinding coverage is now considered a denial of benefits for the purposes of triggering the appeals process.

Contact us Today to Speak With an Experienced Long Term Disability Lawyer

The new rules could have important repercussions for employees who receive benefits under an employer-sponsored plan, so if you live in Chicago and were denied disability benefits, please contact Bartolic Law at (312) 635-1600 to schedule a free consultation with a skilled long term disability attorney today.