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News Items, by Subject

Disability plans


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One Sure-Fire Way to Engage Employees in Voluntary Benefits
"One way is to understand what employees might need given their life stage, family situation or other variables. To help employees sort this out, here are few scenarios of how voluntary benefits could help employees[.]" (Voya)
District Court Finds Two-Decade Pattern of Insurer's 'Extraordinary' Steps to Deny Disability Claims
"The court queried whether Reliance based its denial on substantial evidence. Its answer: No.... The court then queried whether Reliance has a conflict of interest. Its answer: Yes. The court found over 100 decisions in the last 21 years criticizing Reliance's disability decisions.... [T]he court noted that Reliance submitted no evidence showing that it has taken steps to mitigate its conflict of interest.... [T]he court found that Reliance abused its discretion by denying Nichols' benefits." [Nichols v. Reliance Standard Life Ins. Co., No. 17-42 (S.D. Miss. June 29, 2018). (Kantor & Kantor)
Court Focuses on Definition of 'Regular Occupation' in Disability Benefits Dispute
"[The district court found that] [1] The fact that Unum requested additional information and proof that plaintiff satisfied the elimination period after relying on information provided by plaintiff's employer does not qualify as a moving target.... [2] [T]he Dictionary of Occupational Titles is an acceptable source for nationwide job descriptions and classifications." [Dahlka v. Unum Life Ins. Co. of Am., No. 17-245 (W.D. Wis. June 12, 2018)] (Lane Powell PC)
Employer's Endorsement of Long-Term Disability Policy Created ERISA Plan
"[T]his insurer sought to avoid state-law claims... [T]he employer was not a party to the lawsuit.... [T]he court did not address whether the employer believed its program qualified for the voluntary plan safe harbor or complied with ERISA. Nevertheless, the case serves as a warning to employers seeking to avoid the application of ERISA to these types of arrangements[.]" [Stolebarger v. Prudential Ins. Co. of Am., No. 17-6161 (N.D. Cal. May 18, 2018)] (Thomson Reuters / EBIA)
Migraine Impacts Employers in Both Health Care Spend and Lost Productivity
"[F]rom 2011 to 2015, employees treated for migraine had higher health care costs on average than employees without migraine treatments -- a difference of about $2,000 per year. Employees treated for migraine also had an average of 2.2 more sick days per year, at a cost of almost $600 in wages and benefits.... Employees who take short-term disability leave for migraine miss an average of 38 work days per episode--an economic loss to their employer of about $10,400." (Integrated Benefits Institute)
Insurer's Payment of Reduced Benefits Not a Fiduciary Breach
"Contrary to the widow's [assertion], LINA did not have a fiduciary duty to notify her husband that he had not completed the evidence of insurability requirement needed for the full amount of supplemental benefits. The plan documents showed that the circumstances in this case resulted not from any fault of LINA but, rather, from the employer's errors in failing to fulfill its fiduciary duties." [Gordon v. CIGNA Corp., No. 17-1188 (4th Cir. May 15, 2018)] (Wolters Kluwer Law & Business)
Ninth Circuit Holds That Substantial Contribution Standard Applies to AD&D Policy Exclusion
"[T]he court held that the substantial contribution standard applies in interpreting the concepts of cause and contribution in the exclusion for 'any loss caused or contributed to by illness or infirmity.' Applying this standard, the court found that diabetes did not substantially cause or contribute to the amputation where Dowdy suffered a deep infection related to the original injury and the fracture itself was slow to heal. For these reasons, the court found that Plaintiff is entitled to benefits." [Dowdy v. Metropolitan Life Ins. Co., No. 16-15824 (9th Cir. May 16, 2018)] (Kantor & Kantor)
Disability Benefits Claims May Settle Faster Under New Claims Procedures Regs
"If the plan administrator fails to strictly comply with the new rules, then the Labor Department has strongly suggested that any court review of a disability claim denial should be under a de novo standard.... In California, de novo review always will occur for litigated insured disability benefit claims. This is the case even if the new Labor Department rules are precisely followed by the plan administrator and if the plan is well drafted to give decision discretion to the plan administrator." (Bob Blum Mediation)
[Guidance Overview] New DOL Claims Procedures for Disability Benefits: Action Items to Stay in Compliance
"Review and identify all company-sponsored employee benefit plans to determine if the plan conditions benefits, including the payment or vesting thereof, on a determination of disability.... Amend claims procedures and update notices, Summary Plan Description and third-party service provider agreements ... Employees involved in making disability claims determinations should be trained on the new requirements imposed under the Final Regulations." (Buchanan Ingersoll & Rooney PC)
[Guidance Overview] DOL's Final Rule on Disability Claim Procedures Take Effect
"The Disability Claims Regulations deem a claimant to have exhausted all administrative remedies if a plan fails to strictly adhere to all of the DOL claims regulations, so it is vital for the plan administrator or follow these requirements.... The special rules require [a plan] to provide oral language services ... that would answer questions in the applicable non-English language and provide assistance with filing claims and appeals in such language; provide, upon request, a notice written in such language; and include in the English versions of all notices, a written statement prominently displayed in any applicable non-English language clearly indicating how to access the language services provided by the plan." (Friday Eldredge & Clark LLP)
Two Ways the New DOL Disability Claims Regs Will Change Litigation
"The new regulations allow for the court to substitute de novo review in cases where an insurer failed to strictly adhere to the regulations.... There are several strategic advantages to agreeing to de novo review, depending on your administrative file." (Lane Powell PC)
[Guidance Overview] New DOL Disability Claims Regs Now Effective
"[M]ost notable ... is the DOL's new 'deemed exhausted' rule, under which a claimant is deemed to have exhausted the administrative remedies available under a plan -- and is therefore permitted to proceed immediately to litigation -- if a plan fails to strictly adhere to any of the claims procedures[.]" (Robinson & Cole LLP)
[Guidance Overview] Expanded Disability Claims Procedure Rules Become Effective in Three Days
"Plan sponsors need to review their plans to determine whether such plans provide disability benefits and, if so, whether the rule applies. This review should encompass not only short- and long-term disability plans, but also ERISA-governed retirement, severance and 'top hat' plans that provide disability benefits.... [A]ppropriate steps should be taken to amend plan documents, prepare necessary participant communications and confirm proper administration of any disability claims filed on or after April 1." (McGuireWoods)
Sixth Circuit Affirms Finding That AT&T Did Not Violate Current DOL Disability Claims Regs
"AT&T's welfare benefit plan doesn't owe disability benefits to a worker who said the company violated federal regulations by consulting the same doctor when considering her initial claim and her subsequent appeal. The worker accused AT&T of violating the Labor Department's standards for evaluating disability benefit claims, including a provision prohibiting plan administrators from using the same doctor to evaluate both the initial and appeal phases of a worker's claim for benefits." [Castor v. AT&T Umbrella Benefit Plan No. 3, No. 17-3400 (6th Cir. Mar. 26, 2018; unpub.)] (Bloomberg BNA)
Part-Time Employee Entitled to Disability Benefits
"LINA argued it based its decision on updated medical evidence reviewed by case managers, an on-staff physician, and an independent board certified clinical neuropsychologist.... Looking at the definition of residual disability in the plan, LINA needed medical evidence to show [the employee] was capable of performing each and every material duty ... on a full-time basis. While LINA had discretion in interpreting and administering the plan, this discretion did not permit LINA to ignore the language of the plan." [Van Steen v. Life Ins. Co. of North America, Nos. 16-1405, 16-1421 (10th Cir. Jan. 2, 2018)] (McAfee & Taft)
[Guidance Overview] Prepare to Address Disability Claims Under All Types of Benefit Plans Differently, Starting April 1, 2018
"Does a third party (external) reviewer determine if disability exists? If so, either the plan document, insurance contract or service agreement needs to require that that third party comply with the new DOL rules.... Many benefit plans detail claims procedures only in the SPD; in that case, the plan document might not need to be updated, but a summary of material modifications should be provided to plan participants outlining the disability claims procedure changes." (Frost Brown Todd LLC)
Don't Amend Executive Comp Plans Yet for New Disability Claims Rules
"It is likely that all or a portion of the benefits earned or accrued before 2018 under non-qualified deferred compensation, executive retirement, and severance plans will be exempt from the $1 million deductibility limits of Code Section 162(m) under the grandfathering provisions of the transition rule.... Do not amend your non-qualified deferred compensation, executive retirement, and severance plans now in order to preserve the exemption." (Winston & Strawn LLP)
[Guidance Overview] Will Your Plan Need to Follow the New Disability Claims Procedures on April 1?
"Affected plans can include welfare plans (including 'wrap' plans with short-term disability and long-term disability benefits), certain pension plans, and 401(k), 403(b), and non-qualified 'top hat' deferred compensation plans ... Any plan for which disability is determined by the plan administrator or its delegate, and not by the Social Security Administration or a disability insurer, must be administered in accordance with the new rules beginning April 1, 2018, and the plan's claims procedures must comply in form with the new rules." (Husch Blackwell)
Third Circuit Adopts Plan-Friendly Interpretation of a 'Mental or Nervous Disorder' Limitation
"The Third Circuit stated that the plan's language made clear that to remain eligible for benefits beyond 24 months, it was the plaintiff's burden to 'prove she was totally disabled from any occupation solely due to a physical condition.' The Third Circuit further explained that the terms of the mental nervous limitation in the plan ... means 'that benefits may be terminated when physical disability alone is insufficient to render a claimant totally disabled.' " [Krash v. Reliance Standard Life Ins. Group, No. 17-1814 (3d Cir. Feb. 12, 2018)] (Seyfarth Shaw LLP)
[Guidance Overview] Are Your Qualified and Nonqualified Employee Benefit Plans in Compliance with the New ERISA Disability Claims Regs?
"[W]here a plan does not provide for its own fiduciaries to make a determination of disability -- but instead defers to the determination made by the administrator of another plan (like the employer's long-term disability plan) -- then only the terms of the other plan need to be amended. Examples include health plans that extend eligibility, or deferred compensation plans that provide accelerated vesting, to claimants who are receiving benefits under the employer's long-term disability plan or Social Security Disability Insurance (SSDI)." (Katten Muchin Rosenman LLP)
[Guidance Overview] New Disability Claims Procedures Take Effect April 2, 2018
"Plan sponsors should start by identifying which of their ERISA plans allow for an exercise of discretion by a claims administrator in determining the disability status of a participant.... [It] is this exercise of discretion -- rather than the application of an impartial, objective standard -- that implicates the Final Rule. Accordingly, claims under a health plan, a long- or short-term disability plan, or even a retirement plan could be affected." (Verrill Dana LLP)
[Guidance Overview] New Disability Claims Procedure Regulations Take Effect on April 1, 2018
"If the new claims procedures are not followed, then the claimant will be deemed to have exhausted administrative remedies. As a result, the claimant would be allowed to immediately file a lawsuit to seek a review of the disability determination. The court reviewing the claim would not be required to give any deference to the prior decision of the plan as a result of the failure to follow the new claims procedures." (Duane Morris LLP)
Is Your Short-Term Disability Program Covered by ERISA?
"To determine whether a plan fits within this safe harbor exception, the label and intent of the employer are not controlling. Instead, an employer must answer these 4 questions ... [1] Who is getting paid? ... [2] How much are the payments? ... [3] What source is the payment coming from? ... [4] Why are the payments being made?" (Graydon)
[Guidance Overview] New ERISA Claims Procedures for Plans Providing Disability Benefits Effective April 1, 2018
"Appeal denial notices should be revised to include the time limitation as to when a claimant can bring a claim in federal court under Section 502(a). All notices must also be presented in a culturally and linguistically appropriate manner, which means that the plan must provide oral language services to claimants such as answering questions in a non-English language and providing assistance with filing claims in any applicable non-English language." (Holland & Knight)
[Guidance Overview] New ERISA Disability Benefit Claims and Appeals Rules Take Effect April 2, 2018
"The new rules will apply to disability benefit claims under both pension and welfare plans, but only if the plan's claims adjudicator must make a determination of disability in order to decide the claim. If a plan conditions eligibility for benefits on a finding of disability by a third party, such as the Social Security Administration (SSA) or an employer's long-term disability plan, the plan is not subject to the new rules. Plans may be amended to condition eligibility on a determination of disability made by the SSA or the employer's long-term disability plan to avoid the application of the new rules[.]" (Hanson Bridgett LLP)
[Guidance Overview] DOL Says New Disability Claim Regs to Apply April 1
"The 2016 amendments add a new requirement applicable during the claim appeal phase: a plan must give a claimant reasonable time to review and respond to 'new or additional evidence' or a 'new or additional rationale' for denying his or her claim.... [The DOL] places no limits on the amount of back-and-forth required. Nor is there any adjustment in the time allowed for rendering a decision in order to accommodate this additional procedure.... [T]he preamble also suggests that when the claimant does respond, if the response prompts further review by a medical professional, which is likely (and may be required by the regulations), the plan may need to send the matter to the claimant for another response, and so on." (Ogletree Deakins)
Claim Denial Letter Is Only as Good as the Analysis Contained in the Medical Examiner's Report
"Don't rely on the mere conclusions by the independent reviewer and inform your independent medical reviewer that the reasons for the conclusions are as important as the conclusions themselves. That is because ... your denial letter is only as good as the analysis/reasons stated in the IME report." [Westfall v. Liberty Life Assurance Co. of Boston, No. 16-2921 (N.D. Ohio Feb. 28, 2018)] (Lane Powell PC)
Compliance Issues That Should Be on Your Radar Screen for 2018
"Employers finalizing their 2017 reporting should be aware of issues raised by the IRS in 2015 employer shared responsibility assessment letters (Letter 226J) that the agency began to send last fall.... New disability rules apply in April.... Wellness plan rules in flux.... Mental health parity in crosshairs again.... Expected guidance on HRAs." (Mercer)
[Guidance Overview] New Claims Procedures for Disability Benefit Claims Take Effect
"The new rules intend to offer additional procedural protections and safeguards to claimants seeking disability benefits under an ERISA plan.... [C]laimants must receive an opportunity to review and respond to new evidence or rationales developed by the plan while an appeal is pending.... [D]isability benefit denial notices must contain a 'discussion of the decision' when the plan does not follow a Social Security Administration disability determination or otherwise contradicts the views of the treating professionals." (Latham & Watkins)
[Guidance Overview] April 1, 2018 Is Fast Approaching -- Are Your Disability Claims Procedures Ready?
"To avoid claimants being deemed to have exhausted the plan's claims procedures, enabling them to sue the plan with the favorable de novo standard of review, the claims procedures of all plans providing a disability benefit must be reviewed against these final regulations. This includes disability, pension, defined contribution plans (401(k) and 403(b)) and nonqualified deferred compensation plans." (Foley & Lardner LLP)
[Guidance Overview] No Further Delays for Enhanced Disability Claims Procedures
"For plans where the administrator will retain the discretion to make disability determinations, the plan sponsor should, prior to April 1, [1] ensure that plan administrators and benefits staff are aware of, and will follow, the new rules in practice; [2] update plan documents and SPDs to reflect the new procedures; and [3] update ABD letters, disability claims forms, communications, notices, company intranet, and employee handbooks[.]" (McCarter & English)
[Guidance Overview] Don't Overlook Death and Disability Benefits in Reporting Potential Payments Upon Termination of Employment or Change in Control
"Many companies' equity incentive plans or award agreements provide for full or partially accelerated vesting upon an executive's termination of employment due to death or disability.... Compliance and Disclosure Interpretation (C&DI) Question 126.02 states that the Instruction 5 standard that the 'scope' of arrangements not discriminate in favor of executive officers would not be satisfied where the awards to executives are in amounts greater than those provided to all salaried employees -- which is nearly always the case." (Winston & Strawn LLP)
Facebook Has a New Friend: Disability Insurers
"Social media monitoring is a growing practice in which insurers or third party investigators review a person's online footprint for information relevant to their claimed disability.... Some insurers use third-party investigative firms to run social media checks on people claiming disability. At those firms, business is booming." (Bloomberg BNA)
[Guidance Overview] Disability Claims and Appeals: How the New Regs Affect Retirement Plans
"403(b) plans generally ... rely on the determination made by other sources, such as the Social Security administration or the employer's LTD carrier. So, 403(b) plans will be spared from the most significant components of the revised regulations.... 403(b) plans should update internal procedures for handling an appeal from a denial of disability benefits to comply with the new regulations." (PlanPILOT)
[Guidance Overview] New Disability Claims Procedure Rules Take Effect April 1 (PDF)
"The Final Rule is very likely to increase the administrative costs and burdens of administering disability benefits under ERISA plans and is likely to make it easier for claimants to pursue their claims in court. Key changes to the procedures that ERISA plans must use to process disability claims include: ... [1] Disclosure of the basis for disagreeing with a third party.... [2] Right to review and respond to new information before final decision.... [3] Strict compliance and possible de novo review." (Groom Law Group)
[Guidance Overview] New York Paid Family Leave Is Now in Effect
"[If] you haven't done so already, [you must] obtain PFL coverage from your insurer, similar to the way in which you've secured disability coverage under New York's Disability Benefits Law (DBL).... While you were permitted to start making deductions last summer, as of January 1, 2018, you are required to make these deductions.... You should educate your employees about the new law in several ways ... This law differs from FMLA and requires employers and employees to complete forms and provide information that is distinct from what is required by the FMLA." (Mintz Levin)
[Guidance Overview] DOL Changes Disability Claims and Appeals Regs
"If your self-insured STD benefit is, in fact, subject to ERISA, you'll need to amend your plan documents.... If your self-insured STD benefit is, in fact, subject to ERISA and you are making disability determinations in-house, consider looking for an advise-to-pay vendor.... Review the definition of 'disability' or 'disabled' in your other ERISA-covered benefit plans (e.g., profit-sharing, 401(k), defined benefit, non-qualified deferred comp, top-hat, etc.) and consider whether and to what extent you should change that definition." (ERISAfire)
[Guidance Overview] No More Delays! DOL Says New Disability Claims Rules Take Effect April´┐Ż2
"[1] Identify all ERISA-covered plans sponsored by the employer that provide disability benefits.... [S]hort-term disability (STD) plans may or may not be subject to ERISA.... In addition, some retirement plans have disability-based provisions and could be caught up in the new rules. [2] Confirm that all ERISA-covered plans that provide disability benefits have updated claims procedures in effect on April 2.... [T]he procedures should be in writing and ready to be implemented by this date.... [3] Update summary plan descriptions (SPDs) to include the new procedures, and distribute the revised SPDs." (Mintz Levin)
[Guidance Overview] Disability Claims Regs Become Effective April 1, 2018
"To be subject to the final rule, the important inquiry is not how a plan is characterized (as either a welfare plan or a pension plan) but rather how the determination for disability is made under the terms of the plan.... [If] a claims adjudicator must make a determination of disability in order to decide a claim, the plan is subject to the final rule.... [If] the determination of a disability is made by a party other than the plan itself ... a claim for such benefits is not treated as a disability claim and is not subject to the final rule." (Morgan Lewis)
Updates for the New Year in Benefits and Executive Comp
16 topics are addressed. "[E]mployers should verify that all claims based on determining a disabled status will be handled in compliance with the new rules beginning on April 1, 2018, regardless of the type of ERISA plan involved.... A provision permitting qualified disaster withdrawals [from 401(k) plans] for '2016 disasters' was enacted.... Because some retirement plans had historically excluded [moving expense] reimbursements from compensation for plan purposes, employers will need to verify now that such amounts are included ... [An] employer may not receive a deduction for any qualified transportation fringe benefit under Code section 132(f) provided to an employee, unless the transportation is provided for the safety of the employee." (Winstead PC)
No Further Delay for Disability Claim Procedure Rules, DOL Says
"The Final Rule adds several new requirements for the processing of claims and appeals for disability benefits, including the following: Explanation of reasons for denial ... Statements regarding claim file and internal protocols ... Limitations on denials based on new information ... Avoidance of conflicts of interest ... Deemed exhaustion of claims procedures ... Coverage rescissions ... Communication requirements in non-English languages." (Winston & Strawn LLP)
[Guidance Overview] DOL Sets April 1 as Applicability Date for Final Disability Claim Regs
"Although the news release indicates that the DOL has decided on an April 1 applicability date, the regulatory provision modified by the November delay specifies that the regulations will apply to claims filed after (not on) April 1, 2018. Plan sponsors and administrators will need to administer claims under two sets of rules, depending on when the claim was filed. And keep in mind that the disability claim regulations affect any benefit claim that involves a determination of disability by the claims adjudicator, not just claims under disability plans." (Thomson Reuters / EBIA)
[Guidance Overview] DOL Green-Lights Disability Claims Regs
"The regulations will apply to most -- but not all -- claims where benefits are conditioned on a finding of disability. This may include certain benefits under retirement plans, in addition to benefits under long-term disability plans and some short-term disability plans.... [T]here are significant exceptions where the regulations will not apply.... A chart [comparing current law with] the new regulations is provided[.]" (Vorys)
[Opinion] American Benefits Council Letter to DOL on Claims Procedure for Plans Providing Disability Benefits
14 pages. "[We] urge the Department to [1] delay the application of the Final Rule as long as needed to permit the Department to engage in fulsome analysis of the potential effects of the Final Rule's provisions, and [2] take the necessary steps to strike a more appropriate balance between the goal of ensuring a full and fair review of all claims with the need for continued employee access to affordable disability coverage." (American Benefits Council)
Short-Term Delay in Disability Claims Procedures Includes Very Short Fuse
"Some carriers or other providers may have already changed their systems to comply with these new rules and therefore will not see a point in changing their processes at this point. If the delayed effective date will apply, then employers need to make sure to get any necessary plan amendments in place before January 1, 2018 and be prepared to communicate this change to participants." (HUB International)
Missing an Appeal Decision Deadline Can Change Policy Terms
"Employers have the right to amend long term disability plans at any time, and to apply the amended version even to employees receiving benefits under the original plan. But which policy applies during a lawsuit? The policy in effect when the ERISA cause of action accrued. And 'accrual' can occur when the claims administrator fails to render an appeal decision by the deadline prescribed in the ERISA regulations." [Vaccaro v. Liberty Life Assurance Company of Boston, No. 16-3220 (N.D. Cal. Nov. 20, 2017)] (Lane Powell PC)
[Guidance Overview] Implementation of Final Rule on Disability Claims Procedures Formally Delayed
"For employers that maintain insured disability plans, communication with the insurance carrier to discuss how the new procedures will be applied and documented will be important. Employers may consider amending their retirement plans so that the definition of disability relies on the determination of a third party, such as the Social Security Administration or the employer's long-term disability carrier. In that case, the disability claims rules generally would not apply to the retirement plan." (Dickinson Wright PLLC)
Disability Claims Procedure Regs Delayed ... for the Last Time?
"EBSA currently remains unconvinced that the revised claims procedures are overreaching. In the preamble regarding the delay, it states that based on information and data provided to date, no substantive changes or delay past April 1 is warranted. However, through December 11, 2017 interested parties may submit comments, data and 'convincing factual support' for EBSA's review." (Mayer Brown)
[Official Guidance] Text of DOL Final Regs: Delay of Applicability Date for Claims Procedure for Plans Providing Disability Benefits
23 pages. "This document delay s for ninety [90] days -- through April 1, 2018 -- the applicability of a final rule amending the claims procedure requirements applicable to ERISA-covered employee benefit plans that provide disability benefits (Final Rule). The Final Rule was published in the Federal Register on December 19, 2016, became effective on January 18, 2017, and was scheduled to become applicable on January 1, 2018. The delay announced in this document is necessary to enable the [DOL] to carefully consider comments and data as part of its effort, pursuant to Executive Order 13777, to examine regulatory alternatives that meet its objectives of ensuring the full and fair review of disability benefit claims while not imposing unnecessary costs and adverse consequences." (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])
[Official Guidance] Text of DOL Additional Relief for Employee Benefit Plans, Participants and Beneficiaries Impacted by Hurricane Maria and October 2017 California Wildfires
"The [DOL] will not treat any person as having violated the provisions of Title I of ERISA solely because they complied with the verification procedures of IRS Announcement 2017-15.... [The DOL] will not -- solely on the basis of a failure attributable to Hurricane Maria -- seek to enforce the provisions of Title I with respect to a temporary delay in the forwarding of such payments or contributions to an employee pension benefit plan to the extent that affected employers, and service providers, act reasonably, prudently and in the interest of employees to comply as soon as practical under the circumstances.... With respect to blackout periods related to Hurricane Maria, the [DOL] will not allege a violation of the blackout notice requirements solely on the basis that a fiduciary did not make the required written determination....

"The Department recognizes that [group health] plan participants and beneficiaries may encounter an array of problems due to Hurricane Maria and the California Wildfires. The guiding principle for plans must be to act reasonably, prudently, and in the interest of the workers and their families who rely on their health plans for their physical and economic well-being. Plan fiduciaries should make reasonable accommodations to prevent the loss of benefits in such cases and should take steps to minimize the possibility of individuals losing benefits because of a failure to comply with pre-established time frames." (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])

New ERISA Disability Claims Procedures: Action Steps for Plan Sponsors (PDF)
"[T]he requirement that a plan administer may not prevent a claimant from seeking court review for failure to exhaust administrative remedies appears to open the door to more proceedings. The regulations suggest that in this instance, a court should apply a de novo standard of review ... This alone may provide incentive for claims administrators to ensure timely and accurate reviews." (Boutwell Fay LLP)
Text of Fifth Circuit Opinion Rejecting Insurer's Argument That Discretionary Authority Transfers to SPD (PDF)
"The Summary Plan Description explains that certain benefits offset the long-term disability benefit amount, including '[p]ension benefits from a Verizon pension plan, if [the beneficiary] elect[s] to receive them.'... MetLife argues that selecting a trustee-to-trustee transfer constitutes 'electing to receive' pension benefits, while Thomason argues that such a transfer cannot be an election to receive the funds because he has no control over them ... We do not reach the actual meaning of 'elect to receive' under the Plan. Instead, we determine that the Summary Plan Description is ambiguous and thus we construe it in Thomason's favor." [Thomason v. MetLife, No. 16-10634 (5th Cir. July 18, 2017)] (U.S. Court of Appeals for the Fifth Circuit)
Timing Is Everything: Tenth Circuit Overturns Insurer's Disability Decision as Arbitrary and Capricious
"The more unexpected result is the Court's finding that a claimant's last day worked and date of disability may be the same. This defies the typical interpretation many administrators use where the date of disability follows the last day worked.... Further, the Court found it was unreasonable for the administrator to rely on the employer's assertions alone. This case thus serves as a reminder to conduct an independent investigation." [Owings v. United of Omaha Life Ins. Co., No. 16-3128 (10th Cir. Oct. 17, 2017)] (Seyfarth Shaw LLP)
[Opinion] Joint Comment Letter to DOL on Proposed Extension of Applicability Date for Regs Governing Claims Procedure for Plans Providing Disability Benefits
"[We] strongly support delaying the applicability date of the Regulation for a period sufficient to allow the Department to consider the effects of the Regulation and any necessary changes. Not only does a 90-day delay provide insufficient time for insurance carriers and employers to implement changes to comply with the Regulation, but we also do not believe the Proposed Delay will provide sufficient time for the Department to review comments and data provided by stakeholders, determine next steps, and issue a proposed final rule consistent with the requirements of the Administrative Procedure Act." (American Benefits Council and 15 other employer organizations)
DOL Proposes 90-Day Delay of Disability Claims Regs
"[T]he 2016 final claims regulations might be delayed, modified or even withdrawn altogether. Given the uncertainty, employers that provide disability benefits impacted by the 2016 claims regulations ... should consider delaying the implementation of any changes until the DOL's plan with respect to these rules becomes clearer." (Willis Towers Watson)
District Court Rules That Disability Claimant Is Entitled to Discovery About Insurance Company's Attorney-Client Communications
"Regarding Plaintiff's distrust of Aetna to include all relevant information in the administrative record, ... the court articulated 12 observations and rulings about discovery ... The court also considered the fiduciary exception to the attorney-client privilege.... [and] concluded 'that the fiduciary exception permits discovery of attorney-client communications between Aetna and its in-house counsel before the lawsuit was filed and might permit discovery of post-lawsuit communications before the final benefits decision was made.' " [Johnston v. Aetna Life Ins. Co., No. 17-20996 (S.D. Fla. Oct. 16, 2017) ] (Kantor & Kantor)
DOL Proposes 90-Day Delay of Disability Claims Procedures Rules
"Some retirement plans may consider making amendments to avoid having to comply with the special rules for disability claims procedures altogether. Where a plan provides a benefit conditioned on an independent disability finding made by a party other than the plan, such as the Social Security Administration or the employer's long-term disability plan, the claim is not treated as a disability claim. As such, the plan would not have to comply with special disability claims procedure rules." (Michael Best)
Beware of These Four Disability Insurance Contract Details
"And/or provisions dictate when a disability insurance policy pays.... Employers should have a firm grasp on what, if any, pre-existing conditions prevent a member from making a disability claim.... [S]ome Return to Work clauses allow a partial return to work, while others do not.... [It's] important to know how claims would pay out if someone with variable pay went on disability. Familiarize yourself with this clause and ensure it's appropriate to your specific workforce." (Corporate Synergies)
[Guidance Overview] DOL Publishes Proposed Rule to Delay Implementation of New ERISA Disability Claims Regs
"[Some of the information] the DOL wants to consider ... [1] the number of disability claims that are filed and denial rates for such claims ... [2] how often plans rely on new or additional evidence or rationales during the claims review process ... [3] loss ratios and the breakdown of expenses (claims, sales, claims processing, etc.); [4] aggregate, average, and median benefits paid and ages of claimants; [5] the projected litigation costs associated with the new procedural requirements for disability claims provided in the Final Rule; [6] the number of new claims that will be granted that, but for the provisions in the Final Rule, would have been denied, and the value of those benefits[.]" (Lane Powell PC)
[Guidance Overview] What to Do -- or Not Do -- with the Disability Claims Rules?
"At this point, it is unclear what, if any, modifications might be considered to the final rules. Because ERISA-governed plans are already required to include adequate claims procedures, following existing procedures should be sufficient during this interim review." (Holland & Hart LLP)
 
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