New Disability Insurance Regulations Designed to Provide Safeguards for Policy Holders
New regulations will affect employers and plan administrators who offer short-term and long-term disability plans.
New Employee Retirement Income Security Act (ERISA) regulations will change how employers handle disability claims and appeals. The U.S. Department of Labor's revised regulations became effective April 1, 2018.
If you offer your employees group disability plans, be sure to check if you and your vendors comply with the new regulations.
New Regulations
- Insurers cannot give bonuses to claims examiners or medical experts for denying claims. The purpose of the new regulation is to make sure claims and appeals are decided impartially.
- Insurers must send a detailed letter explaining the reason a claim is denied, the explanation must include why the insurer did or didn't agree with the disability determinations; an outline of company rules or guidelines the insurer used to determine the claim; and information about the claimant's right to access their claim file and relevant documents.
- Claimants have the right to appeal the decision within 45 days. Check your plan to ensure an appeal process is included.
- Plan administrators must follow procedures when retroactively rescinding a disability plan. Claimants don't have to go through a plan's claims procedures (including the appeal process) if the plan administrator does not follow the procedures. Plan administrators must respond within 10 days in writing when the claimant requests an explanation.
- Communications must be understood by all policyholders. Translation services — written and oral — should be available to claimants who speak languages other than English. In counties where at least 10 percent of the population doesn't speak English, denial letters must include a statement in that language about the availability of translation services.
- When claimants are denied benefits, they must receive an exact deadline for bringing a suit. The notification must include a description of the contractual limitations period and the actual calendar expiration date.
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