WASHINGTON – It can be challenging for workers seeking disability benefits from an employer-sponsored plan to understand the process and why their claim is approved or denied. To improve the fairness, transparency and accuracy of the disability claims process, the U.S. Department of Labor has announced a final rule requiring that plans, plan fiduciaries, and insurance providers comply with additional procedural protections when dealing with disability benefit claimants.
“Disability benefits are a lifeline for workers who are unable to work after becoming disabled,” said Assistant Secretary for Employee Benefits Security Phyllis C. Borzi. “Claimants deserve to know how decisions are made. They and their families should also have confidence that the process and procedures are not biased against them.”
The new rule ensures that disability claimants receive a clear explanation of why a claim was denied, their rights to appeal a denial and their right to review and respond to new information developed by the plan during the course of an appeal. The rule also requires that plans avoid potential conflicts of interest among those individuals making decisions on benefits claims and appeals. For example, a claims adjudicator could not be hired, promoted, terminated or compensated based on the likelihood of their denying claims.
The final rule follows a 2015 proposal that generated 145 public comments. Interested parties included plan participants, consumer groups representing disability benefit claimants, plan sponsors, employer groups, individual insurers and trade groups representing disability insurance providers.
The final rule is effective 30 days after its publication in the Federal Register, and can be viewed here. Improvements in the claims procedure process are generally applicable to disability benefit claims submitted on or after Jan. 1, 2018. Read the fact sheet.