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.
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.