The Federal Department of Labor has issued its new and final regulations regarding disability related claims.
If your long-term disability claim is governed by the federal law ERISA, which is the Employee Retirement Income Security Act (Read my previous blog on this topic here.), these new claims regulations are geared at trying to make the claims process fairer and give greater protections to claimants. The most important thing you need to know about those regulations is they take effect on January 1, 2018, and will only apply to claims filed on or after January 1, 2018.
In terms of the details regarding the regulations, they contain specific requirements for the insurance companies handling these types of claims. First, they attempt to create rules so that the insurance companies or claims administrators will not have conflicts of interest and will review the claims on an impartial basis.
You would think, as a fiduciary, that these insurance companies and claims administrators would already do that, given that they have a fiduciary responsibility to do so, but in light of their past history, The Department of Labor determined that they needed to make specific rules about how the employees of insurance companies responsible for evaluating long-term disability claims get compensated, to make sure that the compensation itself is not tied to any performance related to the denial or termination of long-term disability claims.
In addition, insurance companies and claims administrators are subject to expanded disclosure requirements. They are required to get much more specific about the reasons why they are denying or terminating a claim. If they are ignoring the Social Security Administration (SSA) and the findings of the SSA, they must be specific about the medical reasons as to why they’re not following a finding by the SSA, as well as many additional rules requiring greater specificity as to why they are denying or terminating a claim.
In addition to that, disabled claimants can review and respond to new information that the insurance company or claims administrator relies upon during the appeals process. When an appeal has actually been submitted, and the insurance company or claims administrator is reviewing the appeal that denied or terminated a long-term disability claim, they have to give the opportunity to the claimant to respond to that new and additional information, giving the disabled claimant a greater opportunity for a fair review. Other parts of the rule that are also important to the rights of claimants who submit long-term disability claims on or after January 1, 2018. I will be discussing the details concerning those in a future blog post. If you have any questions regarding the changes in this process or any other aspect of a long-term disability claim or insurance recovery matter, feel free to contact my office.
Evan S. Schwartz
Founder of Schwartz, Conroy & Hack