Disability Benefit Claims

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On November 24, 2017, the Department of Labor (“DOL”) released regulations finalizing a 90-day delay on the application of new claims procedures for disability claims. The Obama-era regulations providing for the new claims procedures were set to become effective for disability claims filed on or after January 1, 2018. In the absence of additional regulatory…

A federal district court in Louisiana upheld a Texas state law prohibiting insurers from granting themselves discretion to interpret benefit plans when deciding benefit claims. These so-called “discretionary clauses” are routinely found in plans governed by ERISA and generally result in courts deferring to the plan administrator’s decisions.  As a practical matter, the current ruling…

On October 10, 2017, the Department of Labor (“DOL”) released proposed regulations that would delay for 90 days the effective date of the final disability claims procedures regulations finalized on December 19, 2016. As explained in our August 1, 2017 blog entry, the new disability claims procedures added various participant protections and rights to…

As open enrollment approaches for many benefit plans, employers and plans sponsors should check to make sure their claims procedures for disability claims are consistent with regulations that become effective for plan years beginning on and after January 1, 2018.  These regulations apply to ERISA-covered short-term and long-term disability plans, as well as retirement plans that provide disability benefits that require disability determinations by the plan administrator (as opposed to relying on a Social Security Administration determination or long-term disability plan determination).  The new disability claims procedures are largely meant to track, with some differences, the enhanced disclosure and claims procedures established for medical claims by the Affordable Care Act.  Below are the key components that employers and plan administrators should consider.

On November 18, 2015, the Department of Labor (the “Department”) published a notice of Proposed Rulemaking at 80 Fed. Reg. 222 (the “Proposed Rule”) to amend ERISA’s claims procedures (29 C.F.R. 2560.503-1) as they apply to claims for disability benefits.  One of the purposes of the Proposed Rule is to make ERISA’s claims procedures for disability claims consistent with the Affordable Care Act’s claims procedures for group health plans.  The Proposed Rule contains several components.

Twenty-five years ago, the U.S. Supreme Court ruled that courts should review an ERISA participant’s claim for benefits under a de novo standard of review unless the plan gives the plan fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan.  Since then, courts have considered what type of plan language suffices to grant plan fiduciaries discretionary authority to warrant the more deferential arbitrary and capricious standard of review.

The First Circuit recently held, in line with other circuits, that the statute of limitations for a claim of underpayment of long-term disability benefits does not accrue with each monthly benefit payment made, but instead accrues at the time the underpayment is made known to the participant when he receives his first “miscalculated” benefit award.…

Resolving a split among the Courts of Appeal, the United States Supreme Court affirmed the Second Circuit in finding enforceable a limitations provision in a long term disability ERISA plan that set forth the length of the limitations period as well as when the period commenced. The plan at issue required participants to file suit …

The First Circuit recently split from the Fourth Circuit in concluding that, absent clear plan language to the contrary, the risk of relapsing into addiction can constitute a current disability under a long-term disability plan. Colby v. Union Sec. Ins. Co., Civ. A. No. 11-2270, 2013 WL 174419 (1st Cir. Jan. 17, 2013). Welfare plan sponsors and fiduciaries should take note of the decision, not only because of its potential impact on the administration of ERISA disability plans, but also because it serves as a reminder of the importance of clear, unambiguous plan language.