Preston Rutledge, the head of EBSA Preston Rutledge (Photo: Shawn T. Moore/DOL)

The U.S. Department of Labor appears to be letting major new group disability insurance claim standards take effect Sunday.

The new regulations set new standards for claim reviews, and they may make it easier for claimants to sue in federal court if the claimants can show that the claim administrators failed to follow proper procedures.

(Related: Trump’s Team to Let Major Disability Claim Regs Take Effect)

The Employee Benefits Security Administration (EBSA), the department arm that oversees benefits programs subject to the Employee Retirement Income Security Act of 1974 (ERISA), developed the rules during the administration of Barack Obama.

After President Donald Trump entered office, his administration postponed the effective date of the regulations, from the original effective date of Jan. 1, 2018, but officials ultimately decided to let the regulations take effect once the extension had ended. officials argued that employers and insurers had failed to provide concrete evidence that the regulations would reduce access to group disability coverage or increase prices.

How Preston Rutledge, the new EBSA administrator, implements the new regulations could hint at how he will handle other Labor Department regulations under EBSA’s jurisdiction, such as group health plan mental health benefits parity regulations, and the retirement plan fiduciary rule.

Steven Mindy, a partner at Alston & Bird who handles benefits and ERISA litigation, said in an email interview about the new regulations that they affect plans other than group disability insurance plans.

The old Labor Department disability claim regulations applied to any ERISA plan in which benefits decisions depended, at least in part, on determinations about whether the claimants were disabled, Mindy said.

The same will be true for the new rules, Mindy said.

“For example,’ he said, “disability claims procedures apply to disability retirement provisions when the claim is based on whether or not the participant is disabled. The new rules have caused sponsors to pay more attention to this requirement.”

Retirement plans and other ERISA plans with a disability-related claim trigger can avoid problems related to disability claim procedures by having an outside entity determine whether a claimant is disabled Mindy said.

— Read Feds Officially Delay Obama-Era Group Disability Regs, a Little on ThinkAdvisor.

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