On January 5, 2018, the Department of Labor (DOL) announced that April 1, 2018, will, in fact, be the applicable date for implementing the remaining changes under the Final Rule amending the claims procedures for ERISA plans providing disability benefits (including retirement plans). In a previous client alert on this subject, we reported that the DOL was delaying the full implementation of the Final Rule in order to examine its potential impact. (You can read this alert by clicking here.)
After collecting roughly 200 sets of written comments from stakeholders, the DOL determined that the Final Rule does not impose unnecessary regulatory burdens or significantly impair participants and beneficiaries’ access to disability insurance benefits. The Final Rule is intended to give participants and beneficiaries new procedural protections when dealing with plan fiduciaries and insurance providers who have denied their claims for disability benefits under a plan subject to the Employee Retirement Income Security Act (ERISA).
Background on the Final Rule Amending Disability Claims Procedures
In a previous client alert on this subject, we provided a detailed listing of the changes called for by the Final Rule. You can read this alert by clicking here. Briefly, these are the topics impacted with change as of April 1, 2018:
- Independent and Impartial Review of Claims
- Notices to be Culturally and Linguistically Appropriate
- Improvement to Disclosures
- Right to Review and Respond to New Information before a Final Decision is Made
- Deemed Exhaustion of ERISA Administrative Remedies (where a plan fails to adhere to all the requirements in its claims procedure regulation)
- Coverage Rescission is an Adverse Benefit Determination
What This Means for ERISA Plans
ERISA plan sponsors will need to review claims procedure language – as it relates to disability benefits – to determine whether updates are required to plan documents, summary plan descriptions, or any standalone claims procedure documents. Equally important, plan sponsors will need to ensure that the new rules are implemented in their plan administration.
Note: Michael Best Paralegal, Teresa M. Como, contributed to the development of this content.