Today the U.S. Department of Labor’s (DOL) Employee Benefits Security Administration announced a Notice of Proposed Rulemaking (NPRM), proposing a 90-day delay to the applicability of the ERISA disability claims handling regulations. The DOL’s NPRM is set for official publication on Thursday, October 12th.  In December of 2016, the DOL issued a Final Rule amending the ERISA disability claims handling regulations (Final Rule). The Final Rule was effective January 17, 2017 and applied to disability claims filed on or after January 1, 2018. More information about the Final Rule can be found here, including ReedGroup’s webinar.

In response to concerns that the Final Rule would escalate plan costs, increase litigation, and impair workers’ access to benefits, the DOL is proposing to delay the applicability of the Final Rule for 90 days, moving the date of applicability from January 1, 2018 to April 1, 2018. As part of this proposed delay, the DOL is also providing the public additional opportunity to submit comments and data concerning the potential impact of the ERISA disability regulation amendments. The DOL’s NPRM action is consistent with President Trump’s Executive Order 13771 to reduce regulations by identifying at least two existing regulations to be repealed when an agency proposes a new regulation.

The DOL is seeking comment on both the proposal to delay the applicability of the Final Rule and the impact of the January 17, 2017 Final Rule. The public has 15 days from October 12th to submit comments regarding the proposed delay of applicability and 60 days from October 12th to submit data and comments concerning the impact of the Final Rule.

The DOL determined that it needs additional information from the public to determine that the Final Rule does not impose unnecessary costs and adverse consequences and to assess whether there are alternatives to ensure the full and fair review of disability benefit claims. Specifically, the DOL is focused on:

  • the amended regulation requiring plans to provide claimants with additional information created during the appeals process; and
  • the requirement that plans provide information in an adverse benefits decision (a denial) to claimants who need the decision translated in a non-English language.

Among other explicitly requested feedback, the DOL is soliciting itemized cost estimates on a provision-by-provision basis for the amendments. The DOL is also encouraging comments regarding other aspects of the Final Rule.

What the DOL’s NPRM means

Upon the conclusion of the 15-day comment period, the DOL is likely to move the current date the Final Rules are applicable from January 1, 2018 to April 1, 2018. Employers, third party administrators (TPAs), carriers, and disability plan participants who feel strongly about this proposed delay should submit comments as follows:

  • Federal eRulemaking Portal: Follow the instructions for submitting comments.
  • Email: Include RIN 1210-AB39 in the subject line of the message.
  • Mail: Office of Regulations and Interpretations, Employee Benefits Security Administration, Room N-5655, U.S. Department of Labor, 200 Constitution 3 Avenue, NW, Washington, DC 20210, Attention: Claims Procedure for Plans Providing Disability Benefits Examination.

Those that wish to submit additional data and comments about the impact of the Final Rule should read the NPRM (currently only available in the unpublished version until the official October 12th publication in the Federal Register) and then prepare comments for submission no later than 60 days following the October 12th publication date.

As ReedGroup frequently does with proposed rulemaking that impacts our clients, we are assessing the impact of the amendments and the areas of specific feedback sought by the DOL. Because ReedGroup is a TPA for ERISA-governed disability plans, ReedGroup plans to submit comments to the DOL.  Stay tuned for further announcements as the NPRM continues to progress through the DOL’s regulatory process.

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