What is the regulation?
In January 2018, The Department of Labor (DOL) issued a final rule amending its claims and appeal procedures (29 C.F.R. § 2560.503-1) for ERISA* covered plans to provide additional procedural rights for disability claimants. This amendment is applicable to disability claims filed on or after April 1, 2018. The following is a summary of the rule's most important provisions.
Who is impacted by the new regulation?
Claimants, disability insurers, and claims administrators are impacted by the regulation, although it is important for employers and brokers to be aware of and understand the changes.
What are the new requirements/amendments?
Claims Denial Notices
Notices should be provided in the applicable non-English language if 10% or more of the county population speaks that language. The following information also must be included in all benefit denial and appeal denial notices:
- The claim administrator's rationale, standards, reasons, internal rules or protocols used to deny a claim, and whether the rationale differs from other sources such as the Social Security Administration, and reviewing physicians or other experts
- The claimant's right to a copy of the claim file
- The disclosure of any guidelines relied on in making a claim decision
- Certain disclosures regarding the time period within which the claimant can file suit
- During an appeal, if the claim administrator obtains new information, it must be shared with the claimant, and the claimant must be provided an opportunity to respond to that information.
- Similarly, if the claim administrator identifies a new rationale while adjudicating an appeal, claimants must also be provided the opportunity to review and respond.
- Claimants may submit a letter complaining of any perceived procedural violations, and require the claim administrator to respond within ten days.
Claimants can file suit before completing the appeal process for any alleged violation of the ERISA Claims Procedure regulation requirements. The amendment includes a provision ("safe harbor" for claims administrators) that allows the court to determine if the lawsuit will proceed, or if the claim should be returned to the claim administrator to complete its' review.
What Guardian issued products are impacted?
The updated regulation applies to all ERISA covered disability claims, including most of Guardian's group Short and Long Term Disability products (excluding State Mandated Disability and New York Paid Family Leave), Life insurance Waiver of Premium for disability provisions, Accident Disability Riders on Accident policies, and Administrative Services Only Disability plans. There is no difference in compliance between fully insured and self-funded claims.
Is Guardian prepared to comply?
Yes, Guardian is fully prepared to comply with the new regulations. All disability claims and appeals filed on or after the April 1st effective date will be provided with Amended ERISA Disability Claims Procedures as part of the claim or appeal acknowledgement. These new procedures have been filed with the state departments of insurance. Upon approval, all impacted Guardian in force plans will be amended to include the updated language, which may vary by state.
For more information, contact your Guardian Group Sales or Service Representative.