The Department of Labor (DOL) has issued its final regulations that are intended to strengthen the rules for participants and beneficiaries for disability claims procedures. Davenport Evans employment lawyers Jean H. Bender explains in the latest Employment Law eNews. The final rules are set to go into effect on, and all applicable plans must be compliant by, April 1, 2018. Employee benefit plans that provide for disability benefits and thus have disability claims procedure provisions are subject to these final rules. The final rules set out a number of new requirements that all applicable plans must incorporate before April 1, 2018.
The new regulations contain a number of general requirements. For example, under the new rules, all adjudicators, or individuals that determine disability benefit claims, must be independent and impartial. This new rule mirrors the independence and impartiality test that the Affordable Care Act (ACA) instituted for group health plan claims and appeals.
The new rules also have increased the disclosure requirements for adverse disability determinations. In the event an adverse benefit determination is issued the Plan Administrator will be required to more fully explain the basis for such adverse determination. This includes discussions as to why the decision maker disagrees with experts who evaluated the patient.
Claimants now have a right to respond to new information before a final decision is rendered. The new rules update the disability claims procedures by allowing a claimant the opportunity to review and respond to new or additional evidence or the rationale the decision maker incorporates into the adverse benefit determination on appeal. Moreover, the claimant is entitled to this information before the adjudicator issues the decision.
The final rules create a deemed exhaustion provision. In the event the plan at issue fails to comply with the requirements of the claims procedure rules, the claimant is deemed to have exhausted all administrative remedies. While the rule does contain a restrictive exception, this provision provides an avenue for claimants to go directly to court.
The final rules increase the duties of plan administrators and fiduciaries in assessing and rendering disability claims decisions. We recommend you work with your benefits consultants and legal counsel to review all existing employee benefit plans and corresponding plan documents and amend them to comply with these new rules by March 31, 2018.
For questions, contact Davenport Evans employment lawyers at 605-336-3880 or [email protected].
Davenport, Evans, Hurwitz & Smith, LLP, located in Sioux Falls, South Dakota, is one of the state’s largest law firms. The firm’s attorneys provide business and litigation counsel to individuals and corporate clients in a variety of practice areas. For more information about Davenport Evans, visit www.dehs.com.