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4 Steps for Compliance with the New Disability Claims Procedures

January 16, 2018

Authors

Meredith Jacobowitz and Lisa Van Fleet

4 Steps for Compliance with the New Disability Claims Procedures

January 16, 2018

by: Meredith Jacobowitz and Lisa Van Fleet

Did you read our post “Work Now, Party Later,” advising you to do just that in response to the new Department of Labor rule governing disability claims procedures? If so—party on! If not, we hope you enjoyed your holiday celebrations, because it is now time to work.

On January 5, the Department of Labor announced its decision that the new disability claims procedure rules will take effect on April 1 of this year. Here is our suggested plan of attack for employers:

Step 1: Review our previous blog post to familiarize yourself with the new rules.

Step 2: Identify which of your plans offer disability benefits.

Remember to check both your ERISA qualified and nonqualified plans.

Step 3. Determine whether you need to amend your plan and/or SPD.

Under the new rules, participants who file a disability claim must receive an expanded explanation of their adverse

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ACA Facelift to Disability Claims Process Could Affect All Plans

December 20, 2016

Authors

Chris Rylands and Steven Schaffer

ACA Facelift to Disability Claims Process Could Affect All Plans

December 20, 2016

by: Chris Rylands and Steven Schaffer

claimIt might be tempting to conclude that the recent Department of Labor regulations on disability claims procedures is limited to disability plans.  However, as those familiar with the claims procedures know, it applies to all plans that provide benefits based on a disability determination, which can include vesting or payment under pension, 401(k), and other retirement plans as well. Beyond that, however, the DOL also went a little beyond a discussion of just disability-related claims.

The New Rules

The new rules are effective for claims submitted on or after January 1, 2018. Under the new rules, the disability claims process will look a lot like the group health plan claims process.  In short:

  • Disability claims procedures must be designed
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DOL’s Proposed Amendments to the Claims Procedure For Plans Providing Disability Benefits

December 8, 2015

Authors

benefitsbclp

DOL’s Proposed Amendments to the Claims Procedure For Plans Providing Disability Benefits

December 8, 2015

by: benefitsbclp

Recently, the DOL released proposed amendments to the current procedural rules for employees claiming disability benefits under an ERISA plan. The proposed rules enhance existing procedures, mirror the procedural protections for claimants contained in the PHS 2719 Final Rule, and update the ERISA claims procedures (set forth in ERISA Section 503) to align with these standards.

Summaries of the major provisions follow:

  • Independence and Impartiality – avoiding conflicts of interest. All claims must be adjudicated in a manner which ensures that the persons making the decision are independent and impartial. The proposed rules specify that this independence and impartiality requirement mandates that decisions involving the hiring, compensation, termination, promotion, or similar matters of individuals making claims-related decisions, such as a claims adjudicator or medical experts, cannot be made based on the likelihood that the individual will support the denial of disability benefits.
  •  Enhanced
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11th Circuit: Claimant’s Attorney’s Protest Letter Doesn’t Constitute Administrative Appeal for Exhaustion Purposes

November 14, 2012

Authors

Bard Brockman

11th Circuit: Claimant’s Attorney’s Protest Letter Doesn’t Constitute Administrative Appeal for Exhaustion Purposes

November 14, 2012

by: Bard Brockman

The Eleventh Circuit Court of Appeals recently issued an opinion that provides guidance on what constitutes an appeal for purposes of exhausting administrative remedies under ERISA § 503.  In Florida Health Sciences Center, Inc. v. Total Plastics, Inc. (Nov. 6, 2012), the Court held that a participant’s written protest to the signing of a subrogation agreement did not constitute an administrative appeal of the plan administrator’s claim denial.  To read a copy of the Eleventh Circuit’s opinion, click here.

The case involves tragic facts.  Kristy Schwade’s infant son started to exhibit symptoms of “shaken baby syndrome” when he was five months old.  The cause of the condition was ultimately traced to a daycare provider, who later pled guilty to aggravated child abuse.  Doctors determined that the child had incurred catastrophic and permanent brain damage, which required hospitalization and continuous medical treatment.  The child later died at age four.

For

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District Court’s Remand To Plan Administrator Is Not Final And Appealable

April 23, 2012

Authors

Bard Brockman

District Court’s Remand To Plan Administrator Is Not Final And Appealable

April 23, 2012

by: Bard Brockman

The Eleventh Circuit Court of Appeals recently ruled that a district court’s remand of a benefits claim to the plan administrator is not appealable to the circuit court. For a copy of the court’s opinion in Young v. Prudential Ins. Co., 2012 WL 538955 (11th Cir. Feb. 21, 2012), click here.

The plaintiff in Young submitted a claim for long-term disability benefits, which was denied by Prudential. After she exhausted her administrative appeals, the plaintiff sued for benefits. On cross motions for summary judgment, the district court found in favor of the plaintiff and remanded the case to Prudential for reconsideration of whether the plaintiff was disabled. The district court clerk then entered what purported to be a final judgment and closed the case. Prudential initiated an appeal to the Eleventh Circuit, and while that appeal was pending, Prudential (in its capacity as plan administrator)

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E.D. of Michigan Retirees Must Arbitrate Claim for Medical Benefits, Despite Anti-Arbitration Provision in CBA

January 13, 2012

Authors

benefitsbclp

E.D. of Michigan Retirees Must Arbitrate Claim for Medical Benefits, Despite Anti-Arbitration Provision in CBA

January 13, 2012

by: benefitsbclp

An Eastern District of Michigan court recently ruled that retired union members must arbitrate their claims seeking a lifetime of fully-paid retiree medical benefits under a CBA (UAW v. Kelsey-Hayes Co., E.D. Mich., No. 2:11-cv-14434-JAC-RSW, 12/22/11).

Prior to the plaintiffs’ retirement in the late 1990s, their collective bargaining unit and their employer entered into a CBA which required that the employer would pay the full cost of medical coverage for eligible retirees and their spouses. However, in September 2011, the employer’s successor announced that, effective January 1, 2012, it would discontinue its current healthcare plan for Medicare-eligible retirees and surviving spouses.

The union, on behalf of the retirees, filed this lawsuit alleging that they were entitled to a lifetime of fully-paid medical benefits and that the defendant employers’ conduct breached the terms of the parties’ CBA as well as their fiduciary duties under ERISA. In response, the defendants filed a

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Ninth Circuit Ruling: Insurer “logical defendant” in lawsuit to recover ERISA plan benefits

September 6, 2011

Authors

benefitsbclp

Ninth Circuit Ruling: Insurer “logical defendant” in lawsuit to recover ERISA plan benefits

September 6, 2011

by: benefitsbclp

On June 22, 2011, an en banc panel of the Ninth Circuit Court of Appeals issued its much anticipated decision in Cyr v. Reliance Standard Ins. Co., 642 F.3d 1202 (9th Cir. 2011) (en banc). Considering the issue of whether ERISA section 1132(a)(1)(B) authorizes actions to recover plan benefits against an insurer, the Court overruled prior decisions and held that a claimant may sue an insurer directly for unpaid benefits, even if that insurer is not the plan administrator.

 In that case, Plaintiff Laura A. Cyr (“Cyr”) collected long-term disability benefits based on her compensation. While on long-term disability, Cyr sued her former employer for pay discrimination because of her sex. Cyr and the former employer settled that claim and the former employer retroactively adjusted Cyr’s salary. Cyr then approached the long-term disability insurer, Defendant Reliance Standard Life Insurance Company (“Reliance”) about adjusting her disability payments

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