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Disability plans

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[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) ] (Roberts Bartolic)
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)
DOL Proposes Delaying Implementation of Disability Claim Regs
"There will be a 15-day period for comments on the proposal to extend the applicability date. There will also be a 60-day period to submit 'comments providing data and otherwise germane to the examination of the merits of rescinding, modifying, or retaining the rule' ... Carriers insuring approximately 18 million LTD plan participants estimated that the Final Rule would cause average premium increases of 5% to 8% in 2018, which would be expected to result in an equivalent reduction in covered employees." (Robinson & Cole LLP)
Long-Term Disability Insurance Gets Little Attention But Can Pay Off Big Time
"[As] employers continue to shift benefit costs onto employee shoulders, long-term disability is no exception. Increasingly, they're offering the coverage as a 'voluntary' benefit, meaning employees pay the entire premium. The upside is that if employees pay for the coverage themselves with after-tax dollars and they ever become disabled and need to use the coverage, the benefits will be tax-free.... Although voluntary coverage has a tax advantage, ... leaving it up to employees, especially if they're choosing among several other voluntary coverage options like cancer insurance, critical illness coverage and yes, pet insurance, increases the odds they'll skip buying long-term disability coverage." (Kaiser Health News)
Annual Statistical Report on the Social Security Disability Insurance Program, 2016
"Disability benefits were paid to almost 10.2 million people. Awards to disabled workers (706,448) accounted for 88 percent of awards to all disabled beneficiaries (799,330). In December, payments to disabled beneficiaries totaled more than $11.3 billion." (U.S. Social Security Administration [SSA])
[Guidance Overview] DOL Final Regs on Disability Claims Procedures: January 1 Implementation May Be Best Practice
"Despite the pending OMB review, because January 1, 2018, is quickly approaching, ... plan sponsors [should] review their claims procedures, health and welfare plan documents, retirement plan documents, summary plan descriptions (SPDs), disability claims and appeals denial notices, and any other forms and documents containing claims procedure information, and update them to comply with the Final Rule. Although it might be possible to retroactively amend plan documents after January 1, 2018, [the authors] suggest completing any necessary updates by January 1, 2018, to ensure full compliance." (Nixon Peabody LLP)
New Expectations for Vocational Assessments of 'Any Occupation'
"[M]ost ERISA [disability] plans require an assessment, say after 24 months, whether the claimant can perform 'any occupation.' This review usually involves a Vocational Assessment examining what 'other occupations' and earnings are available given the claimant's education, skills and experience.... Courts are placing higher burdens on vocational experts when establishing what 'other occupations' the claimant can assume. For example, using median wage data may not be sufficient in certain circumstances." [Flaaen v. Principal Life Insurance Co., No. 15-5899 (W.D. Wash. Sept. 27, 2017)] (Lane Powell PC)
Insurer Owes Disability Benefits Despite LinkedIn Posts
"Principal was wrong to conclude that it didn't owe benefits to the truck driver, who had an associate's degree in media design and had some experience with video production, the judge said ... Principal said the truck driver was capable of earning between $49,525 and $65,395 in public relations and sales jobs based on his experience. The judge sided with the truck driver, who said that all of his video work was done on an amateur basis and that he couldn't be reasonably expected to break into such competitive fields." [Flaaen v. Principal Life Ins. Co., No. 15-5899 (W.D. Wash. Sept. 27, 2017)] (Bloomberg BNA)
Paid Family and Medical Leave Programs: State Pathways and Design Options (PDF)
28 pages. "[S]tates seeking to implement paid family and medical leave in the future face a range of program design choices with regard to system structure, funding, and administration. This brief discusses the growing need for paid leave, the pathways to existing paid leave programs in the U.S. and abroad, and design options and challenges facing states seeking to adopt new systems in the coming years." (National Academy of Social Insurance [NASI])
ERISA Does Not Preempt Montana's Mental Health Parity Law
"A federal district court in Montana has ruled that ERISA did not preempt Montana's mental health parity law, as applied to an ERISA group disability income plan, and that the Montana law required the plan to provide a participant the same benefits for a mental health illness that it would apply if the disability had been physical." [Sand-Smith v. Liberty Life Assurance Co. of Boston, No. 17-0004 (D. Mont. Sept. 20, 2017)] (Thomson Reuters Practical Law)
[Guidance Overview] Here in 14 Weeks: New Rules For Disability Benefit Claims (PDF)
"Improvement to basic disclosure requirements ... Right to claim file and internal protocols ... Right to review and respond to new information before final decision ... Avoiding conflicts of interest ... Deemed exhaustion of claims and appeal processes ... Certain coverage rescissions are adverse benefit determinations subject to the claims procedure protection ... Notices written in a culturally and linguistically appropriate manner." (Cowden Associates, Inc.)
Discovery of Claims Procedures to Assess Compliance with DOL Regs? Not So Fast.
"[F]ailing to follow [DOL] claims regulations can result in the court using the de novo review standard ... But the court still may apply the abuse of discretion standard: if the plan can establish: [1] it has procedures in full conformity with DOL regulations, and [2] its failure to follow regulations was inadvertent and harmless. So, what is the plan's burden of proof to establish that it has procedures in conformity with DOL regulations? ... [D]oes Plaintiff get to conduct discovery into claims procedures, and the way you handled the specific claim?" [Capretta v. Prudential Ins. Co., No. 16-1929 (S.D.N.Y. Aug. 28, 2017)] (Lane Powell PC)
Court Finds Pregnancy is Not a Pre-existing Condition for Subsequent Disability Claim
"The court concluded that the policy would essentially require a claimant to be in perfect health at the time of obtaining the policy before the policy would benefit the claimant during the succeeding 12-month period, which would be next to impossible for anyone.... [T]he Eleventh Circuit rejected the insurer's 'but for' argument (i.e., that but for the insured's pregnancy, she would not have developed high blood pressure; but for her high blood pressure, she would not have developed preeclampsia; but for her preeclampsia, she would not have suffered a stroke; and, finally, but for her stroke, she would not have become totally disabled) on the basis that it required too many links." [Bradshaw v. Reliance Standard Life Ins. Co., No. 16-11125 (11th Cir. Aug. 31, 2017; unpub.)] (The Wagner Law Group)
[Guidance Overview] Nonqualified Plans May Need to Be Updated for New Disability Claims Procedure Regs
"While nonqualified deferred compensation plans are generally exempt from most of the substantive provisions of [ERISA], Nonqualified Plans are still subject to ERISA's enforcement provisions, including claims regulations implementing section 503 of ERISA. For that reason, a Nonqualified Plan must contain claims procedures that comply with the ERISA claims regulations for resolving participant claims under Nonqualified Plans." (Trucker Huss)
Eleventh Circuit: Healthy Pregnancy Is Not a Pre-Existing Condition for Disability Caused By Stroke (PDF)
"Bradshaw had a healthy pregnancy and no other pre-existing medical conditions when she bought a disability-insurance policy ... [N]ine days after Bradshaw gave birth to her daughter, tragically, Bradshaw suffered a debilitating stroke. So Bradshaw filed a claim for long-term disability benefits with Reliance, which Reliance denied ... because of Bradshaw's healthy pregnancy at the time she purchased her policy; Reliance asserted that qualified as a pre-existing condition that 'contributed to' Bradshaw's stroke.... Reliance's determination was unreasonable. So we reverse and remand the case to the district court for an award of ERISA benefits." [Bradshaw v. Reliance Standard Life Ins. Co., No. 16-11125 (11th Cir. Aug. 31, 2017; unpub.)] (U.S. Court of Appeals for the Eleventh Circuit)
When Bad Surgery Results Create New Disabling Conditions: Still Excluded from Disability Plan Coverage by the Pre-Existing Condition Exclusion?
"Pre-existing condition exclusions can be difficult to apply, especially when addressing whether a new disabling condition relates back to a pre-existing condition. But this new case shows how a new disabling condition resulting from a 'bad surgery' may still be excluded under the pre-existing condition exclusion." [Haddad v. SMG Long Term Disability Plan, No. 16-1700 (E.D. Cal. Aug. 22, 2017)] (Lane Powell PC)
Are Your Plans Impacted by the New Regs on Disability Claims?
"The Final Rule governs employee benefit plans subject to ERISA that offer disability benefits, not just disability plans. In addition to disability plans, it is not unusual for a retirement plan to provide disability benefits. It is also common for ERISA-covered benefit plans to waive premiums or provide some other form of benefit in the event of a disability." (Graydon Head & Ritchey LLP)
The DOL's Final Rule on Disability Claims Procedures: What Changes Do You Need to Make?
"[1] [D]enial notices must contain specific reasons for an adverse determination and basis for departing from previous rulings... [2] [C]laimants must be informed of their right to request and obtain the entire file upon denial of a claim, not just upon denial of an appeal.... [3] [B]enefit denial notices must be updated to include the plan's internal rules, guidelines, protocols and criteria used to adjudicate the claim[.]" (Graydon Head & Ritchey LLP)
DOL to Review Disability Claims Procedure Regs
"DOL recently announced that it will review ERISA's disability claims procedures regulations for questions of law and policy to determine if they should be amended, delayed, or withdrawn. The regulations ... were finalized in December 2016 and slated to take effect for claims made on or after January 1, 2018 ... An announcement of this nature is fairly uncommon so it is likely, but not a certainty, that DOL will delay and/or amend the final regulations." (The Wagner Law Group)
DOL Announces Review of Regs on Disability Claims
"[T]hese rules also apply to ERISA-governed retirement plans that make disability determinations.... While nonqualified retirement plans are exempt from many ERISA requirements, the claims procedures requirement is not one of them.... These new disability claims procedure regulations do not apply to any plan (health and welfare plan or qualified/nonqualified retirement plan) that provides a benefit the availability of which is conditioned on a finding of disability made by a party other than the plan itself." (Porter Wright Morris & Arthur LLP)
State Offset Statutes Put Brakes to Insurer's Effort to Half Disability Benefits
"A recent ruling from the [Second Circuit] looked at whether a disability insurer could properly offset an insured's personal-injury recovery and decided that Section 5-335 of the New York General Obligations Law precluded the claimed offset. Section 5-335 provides that personal-injury settlements 'shall be conclusively presumed' not to include 'any compensation for the cost of health-care services, loss of earnings or other economic loss[es]' that 'have been or are obligated to be paid or reimbursed by an insurer.' The court held that the New York statute survived an [ERISA] pre-emption challenge and precluded Aetna's efforts to reduce Savatore Arnone's disability benefits." [Arnone v. Aetna Life Ins. Co., No. 15-2322 (2nd Cir. June 22, 2017)] (DeBofsky, Sherman & Casciari, PC)
[Guidance Overview] Administration Looks to Delay or Amend Disability Claims Regs
"The [DOL's] regulatory agenda was updated on July 20 to include a project to 'delay or amend' the final regulations on disability claims procedures. The abstract included for this agenda item indicates that the DOL is reviewing the final regulations for 'questions of law and policy' and schedules a notice of proposed rulemaking for September 2017.... Although the DOL's updated agenda clouds the future of these regulations, it is possible they will take effect as scheduled in the same or similar form." (Willis Towers Watson)
[Guidance Overview] Disability Claims Procedures Must Comply with New Regs Starting in 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 ... 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 [ACA]. [Here] are the key components that employers and plan administrators should consider." (Proskauer's ERISA Practice Center)
District Court Allows Veteran to Proceed with Claim Employer Reduced His Salary by Disability Benefits Amount
"Refusing to dismiss a former marine's USERRA discrimination claim, a federal district court in Florida found that he sufficiently alleged that the employer reduced his pay by the amount of disability benefits he received from the Department of Veterans Affairs (VA), which was the same as claiming that military service was the 'motivating factor' for the adverse decision.... [T]he court rejected the owner's assertion that he could not be individually liable, because the employee claimed the owner exercised control over the terms of employment and was the individual who made the adverse pay decision." [Rimbey v. The Mucky Duck, Inc., No. 17-103 (M.D. Fla. June 29, 2017)] (Wolters Kluwer Law & Business)
Disability Plan Can't Offset Pension Benefits Rolled Into IRA
"The Verizon SPD warned that certain benefits offset long-term disability benefits, including 'pension plan benefits from a Verizon pension plan if you elect to receive them.' The case turned on the phrase 'elect to receive.' ... [T]he 5th Circuit held that because the pension benefits were rolled over into an IRA, [the participant] did not 'receive' them. Thus, MetLife could not offset those pension benefits." [Thomason v. Metro. Life Ins. Co., No. 16-10634 (5th Cir. July 18, 2017; unpub.)] (Thompson Coburn)
[Guidance Overview] The Case for Tackling the New Disability Claims Procedures Before Year-End
"[K]ey changes implemented by the new rule are ... [1] New independence and impartiality provisions.... [2] Enhanced review rights.... [3] New deemed exhausted provisions.... [4] Expanded definition of adverse benefit determination.... [5] New culturally and linguistically appropriate standards.... [6] New disclosure requirements." (Benefits Bryan Cave)
Anatomy of an ERISA Disability Benefit Claim (PDF)
"Because the administrative record is often limited to the evidence that was before the administrator at the time it made the final claims decision, perfecting the claim and appeal is arguably the most important part of any benefits claim." (Plaintiff Magazine)
Why Do More New Englanders Receive Disability Insurance Benefits for Mental Disorders?
"A greater share of people in New England states receive Social Security Disability Insurance (DI) benefits for mental disorders than the share nationwide.... [E]vidence suggests that demographics and economics play a large role, as does greater access to health insurance and health care." (Urban Institute)
CalPERS Announces New Disability Retirement Mandates and Local Agency Audits
"CalPERS announced that it is auditing the industrial disability retirement (IDR) process for 60 contracting agencies.... [B]ecause many local agencies do not have a formal policy that sets forth the procedures for determining disability and industrial disability retirement, agencies should strongly consider adopting such a policy in light of the due process concerns related to the separation process and CalPERS' direction that such a policy is necessary." (Liebert Cassidy Whitmore)
Geographic Patterns in Social Security Disability Receipt
"In 2015, 1.8 percent of all 18- to 65-year-olds across the country received DI benefits because of mental disorders. That recipiency rate was markedly higher in Maine, New Hampshire, Rhode Island, and Vermont. The evidence suggests that access to and treatment from the health care system (which tend to be better in New England states) may help people identify their illnesses and contact the DI program and other services." (Urban Institute)
Second Circuit: New York Law Prohibits Insurance Company from Offsetting Personal Injury Settlement Against Long Term Disability Benefits
"Arnone argued that, because he is a New York resident who was employed in New York and injured in New York, N.Y. Gen. Oblig. Law Section 5-335 applies to his settlement and prohibits Aetna from reducing his LTD benefit.... [T]he court found that: [1] section 5-335 would prohibit Aetna's offset action as a matter of law and, for that reason, would render its decision arbitrary and capricious; [2] section 5-335 is a law that regulates insurance and is saved from express preemption under ERISA; [3] the Plan's choice of law provision sets forth only which jurisdiction's law of contract interpretation and contract construction will be applied, it does not bind the court to apply the full breadth of Connecticut law[.]" [Arnone v. Aetna Life Ins. Co., No. 15-2322 (2d Cir. June 22, 2017)] (Roberts Bartolic)
ERISA Plan Choice-of-Law Provisions: Disability Claim Reviewed Under Abuse of Discretion Standard of Review
"The Court rejected Plaintiff's argument that de novo review should apply because Indiana law disfavors discretionary review.... Courts are not consistent on what effect choice-of-law provisions have on the standard of review. Many courts have determined, for example, that state law prohibitions of discretionary clauses fall within ERISA's savings clause and are not preempted by ERISA." [Kalnajs v. The Lilly Extended Disability Plan, No. 16-62 (W.D. Wis. June 14, 2017)] (Lane Powell PC)
Court Questions Insurer's About-Face on Paying Disability Benefits
"The court was clearly skeptical of an insurer's decision that overturned nearly eight continuous years of benefit payments for a chronic, degenerative medical condition. Although the case was not entirely clear-cut, the actions taken by Unum following Hart's rejection of a buyout offer were suspicious and resulted in the court's determination that there was no reasonable basis for Unum's findings." [Hart v. Unum Life Ins. Co. of America, No 15-5392 (N.D. Cal. May 24, 2017)] (DeBofsky, Sherman & Casciari, PC)
[Guidance Overview] DOL Final Rule Regarding Disability Claims and Appeals Now in Effect
"Plan sponsors should review health and welfare and pension plans to determine if they are subject to the final rule. Most plans will have already made this determination in response to the original regulations issued in 2000, but if the responsibility for making the disability determination has changed through the years, plan language [should] be reviewed and revised as necessary. Summary plan descriptions (SPDs) must be amended to add language implementing the new rules. In addition, a determination should be made as to whether document language and administrative practices remain in alignment." (Segal Consulting)
Quick Responses to Claimant's Typical Challenges to Disability Benefit Denials
"[T]he claims administrator determined Chen could perform a sedentary job and terminated benefits after 19 years.... The Court rejected Plaintiff's argument that Standard had made inconsistent prior decisions.... The Court rejected Plaintiff's argument that Standard had failed to consider the Social Security determination.... The Court rejected Plaintiff's argument that Standard 'cherry-picked' the record.... It is OK to consider Claimant's vacation travel to Europe, Hawaii in determining whether she is disabled." [Chen v. CenturyLink, No. 15-1651 (D. Col. May 18, 2017)] (Lane Powell PC)
Last Week's Notable ERISA Decisions, from a Plaintiff's Perspective
Contains summaries of the facts and results in 25 recent ERISA-related court decisions, which are considered to be notable by this plaintiffs' law firm. The case descriptions are sorted by subject matter and jurisdiction, and include links to the court opinions. (Roberts Bartolic)
Lincoln National Ducks Political Consultant's ERISA Lawsuit
"Lincoln properly offset a former lawyer's disability benefits to account for money he received as a freelance political consultant, a federal judge ruled May 16. The lawyer argued that Lincoln wrongly offset his benefits before he reported this consulting income for tax purposes -- a practice he said affects beneficiaries across all Lincoln-issued disability policies. The judge rejected this claim because the lawyer hadn't first raised it through Lincoln's internal procedures." [Barber v. Lincoln Nat'l Life Ins. Co., No. 17-0034 (W.D. Ky. May 16, 2017] (Bloomberg BNA)
Most Americans Not Protecting Their Paychecks with Disability Insurance
"[A]mong employed Americans who do not have short- or long-term disability insurance provided by their employer, 43 percent say the reason is because their employer does not offer it. Only 14 percent say the reason they don't have it is because they cannot afford coverage; a combined 34 percent don't have policies through their employer due to other obligations or expenses they feel are higher priorities (12 percent), don't see the value (12 percent), or say 'I am healthy and don't need it' (14 percent)." (OneAmerica)
[Guidance Overview] Action Required Before Year-End: Disability Plans Claims and Appeals Procedures
"The newly issued final regulations took effect on January 18, 2017 and will apply to all disability benefits claims filed on or after January 1, 2018.... [Employers should] work with their disability plan insurance carriers, third party administrators, and attorneys to ensure that all underlying disability plans and associated documentation (including any ERISA wrap plans, Code section 125 cafeteria plans, and claims denial forms) are reviewed and updated to ensure legal compliance with the requirements for claims filings beginning January 1, 2018. The final regulations are lengthy, comprehensive, and require detailed review and analysis." (Fraser Trebilcock)
ERISA Benefits and a Claimant's Bankruptcy: When Judicial Estoppel Requires Dismissal of Lawsuits Seeking Long Term Disability Benefits
"The key is to determine when the 'potential cause of action' accrued. And a recent case says those claims 'accrue' when the claimant receives the initial benefit denial letter." [Byrd v. Wellpoint Flexible Benefit Plan and Anthem Life Ins. Co., No. 17-008 (E.D. Mo. May 2, 2017)] (Lane Powell PC)
Disability: The Underappreciated Risk
"Employers can help their employees by educating them ... and by offering and encouraging participation in group long-term disability insurance. Wellness programs that detect health risks before they become chronic conditions can reduce the risk of disability. And, thanks to regulations issued in 2014, it now may be easier for employers that sponsors DC plans to protect their workers from the short- and long-term financial ruin that often accompanies a disability." (Bryan, Pendleton, Swats and McAllister, LLC)
[Guidance Overview] Death of the Substantial Compliance Doctrine?
"The days of the substantial compliance doctrine ... appear to be at an end in the Second Circuit. But plan fiduciaries expecting to rest easy, because their ERISA disability benefits litigations are likely to arise elsewhere, should think again. On December 16, 2016, the DOL issued final revisions to the Claims Procedure regulation ... [P]lan fiduciaries can likely expect courts all over the country to increase scrutiny of administrators' claim handling procedures, especially with respect to disability claims." (Jackson Lewis P.C.)
[Guidance Overview] New Claims Procedure Requirements for Disability Claims
"[If] a plan treats a participant as being disabled, based [solely] on being granted an award of a Social Security disability benefit, the plan's claims procedures would not have to reflect or apply the prior or new rules in the regulations that apply to disability claims.... If the plan retains any other requirement for treating a participant as being disabled, such as the plan administrator retaining any authority to challenge and deny such treatment despite the grant of a Social Security disability award, then the plan would have to handle a participant's claim for a disability benefit wholly or partly in accordance with the (prior and new) rules in the regulations relating to disability claims." (Cary Kane ERISA Lawyer Blog)
[Guidance Overview] The DOL's Revised Regs Applicable to Disability Benefit Claims
"The easiest requirement to meet will be the inclusion of a statement as to when the limitations period will expire ... Writing decisions in a culturally and linguistically appropriate manner also should not present too much difficulty.... Insurers and benefit plans will also need to instruct their claims personnel and any consultants they retain on how to address conflicting opinions and Social Security findings. It will no longer suffice to simply note disagreement or assert that Social Security utilizes different standards." (DeBofsky, Sherman & Casciari, PC)
[Guidance Overview] DOL Boosts Disability Claimant Protections
"During the review process, disability claimants must be guaranteed the right to present evidence supporting their claim and to respond to any new information prior to the final decision. They must also be given notice and a fair opportunity to respond if benefits are to be denied on appeal based on new evidence or rationales not used to deny the benefit at the claims stage." (Fisher Phillips)
Disability Plans Must Follow Claims Procedures Final Rule
"[T]he DOL is attempting to create a more comprehensive review of disability claims, clearly hoping to reduce the need for participants to resort to litigation and reduce difficulties participants experience with delayed claims processing ... A defined benefit pension plan may be affected by these regulations ... [T]he regulations will impact only those pension plans under which a plan fiduciary -- rather than the employer's long-term disability insurer -- makes an independent determination of a participant's disability." (Society for Human Resource Management [SHRM])
[Guidance Overview] DOL Finalizes Regs on Disability Plan Claims Procedures (PDF)
"The vast majority of employers offering disability benefits buy long-term disability insurance, in which case the burden of complying with the new claim processing regulations falls predominantly on the insurer. Additionally, employers typically offer short-term disability benefits through a payroll practice (e.g., salary continuation). Payroll practices are not subject to ERISA, and so the new rules would not apply to those types of arrangements." (Lockton)
Leave Management Continues to Vex Employers, but Outsourcing and Integrated Systems Help
"Outsourcing of [FMLA] administration continues to increase ... 34 percent of employers with 50 or more employees outsource FMLA leave to a third-party administrator (TPA). 45 percent of employers with 1,000 and more employees do so. 80 percent of employers that also outsource management of short-term disability (STD) and long-term disability (LTD) leave do so through the same TPA that manages FMLA leave on their behalf." (Society for Human Resource Management [SHRM])
[Guidance Overview] ERISA Disability Claim Regulations Get a Facelift
"Plans must ensure independence and impartiality of persons involved in claims determinations ... [P]ractitioners, employers, and administrators should expect that plaintiffs will use the rule in litigation to engage in broad-reaching 'conflict' discovery.... [W]hile the rule is intended to reduce conflict and claim disputes, it probably does little to change how plans already operate on this front.... [It] threatens to increase discovery and litigation costs, contrary to ERISA's goals." (Lathrop & Gage, LLP)
Are Your 'Voluntary' Benefit Plans Subject to ERISA?
"[T]here are four requirements of the voluntary plan safe harbor.... The benefit plan must be completely voluntary and employee paid, with no employer contributions made in any form for any employees.... [T]he employer must not endorse the plan. In simple terms if you endorse it, you own it (for purposes of ERISA) ... Finally, under the safe harbor, employers are prohibited from receiving any compensation that exceeds reasonable reimbursement for collecting and remitting premium payments." (Graydon Head & Ritchey LLP)
Seven Things to Know About Limited Discovery in ERISA Long-Term Disability Cases
"[D]iscovery in ERISA cases is generally limited because of the 'significant ERISA policy interests of minimizing costs of claim disputes and ensuring prompt claims-resolution procedures.' Various circuits have different tests on when additional discovery may be taken beyond the administrative record. And, if limited discovery is allowed, then what discovery is allowed? [A] recent case ... highlights the point." [Aitken v. Aetna Life Ins. Co., No. 16-4606 (S.D.N.Y. Jan. 19, 2017)] (Lane Powell PC)

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