“Isn’t this an ACA blog?” Yes, it is. “So, why are you writing about disability plan administration?” Because they said so. The preamble to the proposed rules explains –
Inasmuch as disability and lost earnings can be sources of severe hardship for many individuals, the Department thinks that disability benefit claimants deserve protections equally as stringent as those that Congress and the President have put into place for health care claimants under the Affordable Care Act.
We’ll get to the changes, but first, understand that a benefit is a “disability” benefit, no matter what you call it, “if the plan conditions its availability upon a showing of disability.” 80 Fed. Reg. 72,016, n. 4 (Nov. 18, 2015). If your plan offers such benefits and does not apply current ACA claims processing rules to them, amendments may be required.
Broadly speaking, there are eight mandates:
- Neutral, independent decision makers;
- Full, written disclosure of reasons for claim denial;
- File access and evidence (including testimony) presentation allowed during review;
- Disclosure to the claimant of any new evidence received during the appeal;
- No decision based on new evidence or rationale until the claimant has had a fair opportunity to respond;
- Breaking a claims handling rule entitles the claimant to proceed as if she had satisfied all administrative prerequisites;
- Some rescissions are treated as adverse benefit determinations;
- Culture and language rules generally applicable to health plan notices apply here, too.
The comment deadline is January 18, 2016. When finalized, the new rules will be found at 29 CFR § 2560.503-1. Here are a few illustrations set out in the proposed rules’ preamble:
- A plan may not compensate a reviewer based on cost containment, nor may a plan choose an expert based on her record or reputation for favoring plan administrators over claimants;
- If the Social Security Administration granted disability, the reviewer must adopt that determination or explain in detail why it was rejected;
- The receipt of new evidence by the reviewer and its disclosure to the claimant near the end of the review period may entitle the claimant to an extended review period;
- If suit is permitted because the review rules were not respected, then the plan’s determination will receive no judicial deference;
- A one-sentence offer of translation services must be added to notices sent to addresses in counties with 10% or greater literacy only in a foreign language.
And, finally, DOL asks for comments about –
whether the final regulation should require plans to provide claimants with a clear and prominent statement of any applicable contractual limitations period and its expiration date for the claim at issue in the final notice of adverse benefit determination on appeal and with an updated notice of that expiration date if tolling or some other event causes that date to change.
The rationale is that ERISA borrows state statutes of limitation likely to be unknown or confusing to claimants. If one or the other must hire a lawyer to figure it out, let the plan pay for it.