The Employee Retirement Income Security Act (ERISA) was first enacted in 1974. Since that time, the act has undergone a number of changes and amendments to help protect employees with private health and pension plans. This includes regulation of most private employer disability benefit regulations. Just before the new year, the Department of Labor issued new ERISA disability benefit regulations.
In 1977, the Department of Labor issued “Section 503,” which established the minimum requirements for claims procedures of employee benefit plans covered by ERISA. Section 503 was amended in 2000 to establish new timeframes for claims procedures and add additional requirements, which was intended to reduce the number of lawsuits filed over health and disability benefits disputes. However, disability benefit disputes continued to dominate ERISA litigation.
Most employees covered by ERISA have health benefits and/or pension benefits. Comparatively, a much smaller percentage of employees have private disability benefit plans. However, from 2006 to 2010, ERISA litigation involving long-term disability claims accounted for almost two-thirds of cases. The Department of Labor examined the ERISA regulations and found that practices were inconsistent with existing regulations regarding disability claims involving Section 503.
The Employee Benefits Security Administration under the Department of Labor published new claims procedures for plans providing disability benefits on December 12, 2016. The new rule goes into effect on January 18, 2017, applying to disability benefits claims filed on or after January 1, 2018.
Under the revised rules, claims and appeals are to be decided independently and impartially. Those who decide the claims should not have an incentive to deny claims, such as bonuses based on denials, or contracting with medical experts based on their reputation for denying disability.
Additionally, denial letters are to includes specific information, including why the plan did not agree with certain health care professionals or Social Security Administration disability determinations. Letters should also include a notice of the claimant's right to access their claim documents and files, and detail any guidelines relied on by the plan to deny the claim. If the plan makes a denial based on new evidence, the claimant is to be given notice and an opportunity to respond before the plan denies the appeal.
When a plan fails to follow their own claims procedures, a claimant may be able to file a lawsuit before exhausting the plan's claims procedures. Additionally, if the plan retroactively rescinds disability coverage, the claimant can proceed through the plan's appeals process.
According to the Department of Labor, the new rule “revises and strengthens the current rules primarily by adopting certain procedural protections and safeguards for disability benefit claims that are currently applicable to claims for group health benefits pursuant to the Affordable Care Act. “
Greg Paul has 16 years of experience fighting for his clients to make sure they get the disability benefits they deserve. We represent individuals and families who have been denied benefits by their insurance company or plan administrator. You have a limited time to appeal your disability denial, so do not delay. If you have been denied short-term or long-term disability benefits, contact our office for a free consultation.