The Department of Labor (DOL) issued a new rule that took effect on April 1, 2018, which expands protections for applicants applyinig for short-term and long-term disability benefits under ERISA.
In brief, the new rule helps claimants by adding additional protections to claims procedures, which include:
Right to Review and Respond. When a disability claim is denied, the reason for the denial must be provided early enough to the claimant-employee so as to allow him/her a reasonable opportunity to respond to the denial and enough time to try to rebut that information with additional medical documentation.
Expanded Notice. The insurer or plan, in denying a disability claim, must explain to the claimant-employee why the claim was denied, including explaining the reasons why the insurer/plan disagreed with the opinion of the treating physician and/or a favorable Social Security Administration determination.
Conflict of Interest. Employees of an insurer who handle disability claims, cannot be compensated (e.g., bonus) for denying claims. This applies also to medical and vocational experts who are asked to review disailibty claims.
Non-English Speakers: The insurer or plan must provide reasonable translation services to claimants who do not speak English. If a claimant resides in a county where >10% of the population is literate only in the claimant's language, then denial letters must inform the claimant in the claimant's own language about the availability of translation services.
Limitations Period: A final benefit denial letter must describe the deadline for filing a lawsuit by stating the actual calendar expiration date.