The Employee Benefits Security Administration (EBSA) of the Department of Labor recently proposed new regulations regarding claim procedures for plans providing disability benefits under the Employee Retirement Income Security Act of 1974 (ERISA). For a copy of the proposed regulations click here.
The amendments are intended to strengthen the current rules and adopt certain safeguards already made part of the Affordable Care Act. Interested parties may submit comments to the proposed changes in the regulations.
The proposed changes codify many legal standards that are already being implemented by some Federal Courts. Here is a summary of the proposed changes:
- New procedures must ensure independence and impartiality by those who make decisions regarding long term disability and short term disability claims. For example, insurance companies handling disability claims cannot provide bonuses to their employees that encourage denials.
- Denial letters must fully discuss the basis for the decision and provide a full discussion of the standards used. Letters must explain why treating doctor's opinions are not being followed. Moreover, if a claimant has been granted Social Security Disability benefits, the denial letter must also explain why the Social Security decision is not being followed.
- Claimants should be provided with a full claim file and denial letters must contain a provision advising of the right to obtain the file.
- Notice must be given to claimants regarding any new evidence before the claim decision is made. The claimants must be given an opportunity to respond to the new evidence.
- Final denials at the appeals stage cannot be based on new evidence or new rationales without first giving the claimant a chance to respond.
- Letters from disability insurance companies and plan administrators "must be written in a culturally and linguistically appropriate manner". If a claimant's address is in an area where 10 percent or more of the population is literate only in the same non-English language then, denial letters must contain a sentence regarding the availability of translation services. Such services must include: oral language services, such as a telephone hotline, written notices upon request in a language other than English and, the answering of questions and assistance with filing claims and appeals in any needed non-English language.