Andrew Puzder, chief executive officer of CKE Restaurants Inc., could be the official in charge of overseeing compliance with the new group disability claim regulations. (Photo: Screen capture)

The Obama administration’s Employee Benefits Security Administration has rejected pleas from disability insurers and plan administrators and forged ahead with an overall of group disability plan claim procedures.

Related: Labor’s disability claim proposal firestorm: Where the explosions are

EBSA, an arm of the Department of Labor, is preparing to publish final group disability claim determination regulations in the Federal Register Monday.

The regulation will apply to group disability claims filed on or after Jan. 1, 2018.

EBSA is replacing the current determination procedure rules with rules based the procedures developed for group health plans, in response to the Affordable Care Act benefits decision and decision review standards.

The new regulation set standards for group disability denial notices, let claimants respond to new information while claim reviews are under way, set new claim reviewer impartiality rules, and give claimants quick access to the courts if plan administrators are making significant claim error errors.

The impartiality section forbids plan administration firms making “decisions regarding hiring, compensation, termination, promotion, or other similar matters with respect to any individual … based upon the likelihood that the individual will support the denial of benefits,” according to the regulation text.

Insurers and administrators objected to the section that gives claimants quick access to the courts if administrators appear to be making any errors other than minor errors.

EBSA says in the introduction to the regulations that some commenters argued claimants would use insignificant missteps in claims management practices as an excuse to go to court.

EBSA does not believe the typical claimant will do that, officials say.

EBSA felt it had to do something about group disability claims, because long-term disability plan claim disputes accounted for 64.5 percent of the employee benefits caseload from 2006 through 2010, officials say.

“Insurers and plans looking to contain disability benefit costs may be motivated to aggressively dispute disability claims,” officials say.

The Affordable Care Act beefed up protections for group health plan enrollees involved in claim decision disputes, and an independent advisory group told EBSA to take another look at the disability claims process, officials say.

EBSA is completing work on the claim procedures regulations shortly before President Obama is due to leave office. 

Federal law lets Congress kill regulations completed during the 60 legislative days at the end of the outgoing president’s last year in office.

Republicans in Congress have told the Obama administration that they will look hard at any regulations completed late in Obama’s term, or “midnight regulations.”

Andrew Puzder, the chief executive officer of Carpinteria, California-based CKE Restaurants Inc. and President-elect Donald Trump’s pick to be the next labor secretary, has taken a strongly pro-employer, pro-plan stance on health benefits disputes in the past.

Republicans are still determining what kind of ability the next administration will have to cancel Obama administration regulations, modify the regulations, postpone the regulations’ effective date, or decline to enforce the regulations’ provisions.

Related:

Disability claimants may get quick access to courts

Court pans group disability plan wording

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