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Regulation and Compliance > Federal Regulation

Disability claimants may get quick access to courts

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The Employee Benefits Security Administration (EBSA) wants to set new standards for group disability benefits decision appeals and give plan members easier access to the federal courts.

EBSA is getting ready to publish a draft group disability appeals regulations in the Federal Register Wednesday.

Group disability plans come under the Employee Retirement Income Security Act of 1974 (ERISA), not the Patient Protection and Affordable Care Act of 2010 (PPACA).

But EBSA, the arm of the U.S. Labor Department that oversees group benefit plans, said it wants to base the updated group disability appeal standards on PPACA appeal standards, because it has just set final PPACA internal appeal and external review standards, and officials there believe employers will be used to the PPACA standards.

See also: 10 things you MUST know about the new PPACA regs

The current standards were set 15 years ago, officials say in a preamble to the new proposed regulations.

“Even though fewer private-sector employees participate in disability plans than in other types of plans, disability cases dominate the ERISA litigation landscape today,” officials say.

In the proposed draft regulations, EBSA would set standards for a plan’s internal appeals process, such as forbidding a plan from basing bonuses on a claim adjudicator’s denial rate.

EBSA also would issue standards for benefit denial notices, let claimants respond to new information before denial reviews were completed, and let claimants file claims in the courts immediately if a plan made errors that failed to qualify for a “minor errors exception.”

EBSA would classify an error as “non-minor” if it was found to be “reflective of a pattern or practice of non-compliance.”

Now, courts usually defer to the judgment of the plan administrator and avoid reviewing claims from scratch. 

If a plan made a group disability plan that failed to qualify for the minor errors exception, a court could review the entire dispute from scratch, officials say.

EBSA identifies Frances Steen of the EBSA Office of Regulations and Interpretations as the contact person for the regulation.