On Monday, December 19, the United States Department of Labor (DOL) published final changes to ERISA regulations governing disability plan administration. According to the DOL’s fact sheet, the purpose of the changes is to promote fairness for claimants and strengthen the regulations regarding disability claims determinations and appeals to align them with the Affordable Care Act (ACA) protections applicable to group health plans.
The finalized changes to ERISA (Employee Retirement Income Security Act) regulations largely follow the regulations proposed last year, which ReedGroup reported on in November 2015. ReedGroup submitted comments to the DOL’s proposed ERISA regulations and the DOL considered our comments as reported in the DOL’s preamble to the final regulations.
The final regulatory changes impact initial disability claim determinations and appeals administration processes, as well as benefit denial notifications. The regulatory changes include:
- Conflict of interest criteria: adds specifics addressing the impartiality and independence of claims adjudicators, service providers, and vendors; for example, financial incentives and employment decisions cannot be tied to claim outcomes;
- Expand benefit denial notice information: requires benefit denial notices to expand upon the reasons and criteria relied upon when denying benefits, including detailed explanation for disagreeing with the claimant’s treating physician or a Social Security Administration determination;
- Provide claimant a right to review and respond to new information, such as a physician review report or transferable skills assessment, as soon as it is available and determined to be relied upon during the appeal process and before an appeal-level denial is issued;
- Consequences if the plan does not adhere to the claims processing rules or if plans are retroactively rescinded, requiring a detailed explanation from the plan of the claim processing violation;
- Non-English language notices: the plan must make translation services available to certain claimants who speak languages other than English, such as oral languages services to assist with claim and appeal filing, translated notices upon request, and information to claimants about how to receive these language services; and
- Contractual limitations period: if the plan sets forth a limitation period in which the claimant can bring suit for a denial of benefits, then the benefit denial notification must include a description of the contractual limitations period and the expiration date.
What You Should Do
Disability plans, employers, third party administrators (TPAs), and consultants must review the new regulations and spend 2017 preparing changes to:
- ERISA-governed disability plans and related documents;
- notifications and letters;
- service and vendor contracts; and
- administration and appeals processes.
What Reed Group Is Doing
Reed Group is analyzing the regulations and will spend the first part of 2017 implementing the changes in our disability management and appeals services and software. ReedGroup will update our disability administration and appeals processes, assess impacts to other services that may run concurrently or overlap with disability claims, such as Family and Medical Leave Act (FMLA) and leave or return-to-work accommodations under the Americans with Disabilities Act (ADA). ReedGroup staff will be trained on all service and process changes.
If you are a ReedGroup disability client, your account management, and delivery team will be working with you to revise plan-related service documentation, notifications, and letters.
ReedGroup is prepared to have all clients compliant with the new ERISA requirements for disability claims filed on or after the January 1, 2018, effective date.