Labor Department Proposes ERISA Rule Changes
The U.S. Department of Labor has proposed modifications to the existing ERISA rules governing plan administrators that decide disability claims (29 C.F.R. 2560.503-1). The DOL is inviting comments from the public through January 19, 2016.
Nilan Johnson Lewis attorney William (Bill) Hittler consults with organizations on ERISA and employee benefits matters and is available to provide interpretation on the possible changes. He says that, if enacted, these modifications will require administrators to modify their procedures to provide for additional disclosures and to ensure that all decisions are based on a full and fair review of the relevant information in the claim file. Although these proposals relate specifically to disability benefit claims, he expects they will be cited in other contexts (health and life) as well.
Some of the proposed new rules affirm existing industry practices (such as explaining the reason a treating physician’s opinion is not entitled to preclusive effect on the claim decision), whereas others establish new obligations (including disclosure to the claimant of any new information or a new rationale during the administrative appeal process).
Following is a short list of the new proposed rules:
- Independence and Impartiality—Avoiding Conflicts of Interest
Plans would have to ‘‘ensure that all disability benefit claims and appeals are adjudicated in a manner designed to ensure the independence and impartiality of the persons involved in making the decision.’’
- Improvements to Basic Disclosure Requirements
The initial adverse determination letter must contain a discussion of the basis of the decision. This discussion would include the basis for disagreeing with the Social Security Administration’s award of benefits, a treating physician’s opinion, or other third party awarding benefits; citation to the specific internal rules, guidelines, protocols, standards or other similar criteria of the plan relied upon, or a statement they do not; and a statement that the claimant is entitled to receive copies of all documents, records, and other information relevant to the claimant’s claim for benefits.
- Right To Review and Respond to New Information Before Final Decision
- Deemed Exhaustion of Claims and Appeals Processes
Where the plan fails to adhere to the requirements of the regulations, the claimant is entitled to exercise his or her remedies unless the violations are minor.
- Coverage Rescissions—Adverse Benefit Determinations
Certain types of coverage rescissions of coverage would be characterized as an adverse benefit determination.
- Culturally & Linguistically Appropriate Notices