DOL Rule to Boost Transparency of Disability Claims Process

It can be challenging for workers seeking disability benefits from an employer-sponsored plan to understand the process and why their claim is approved or denied, according to DOL's rationale for the rule.

A final rule published recently by the U.S. Labor Department aims to build protections that ensure the fairness, transparency, and accuracy of the disability benefits claims process, according to the agency, which published the rule Dec. 19. It is scheduled to take effect 30 days after publication, in the final week of January 2017.

It can be challenging for workers seeking disability benefits from an employer-sponsored plan to understand the process and why their claim is approved or denied, according to DOL's rationale for the rule, which requires that plans, plan fiduciaries, and insurance providers comply with additional procedural protections when dealing with disability benefit claimants.

"Disability benefits are a lifeline for workers who are unable to work after becoming disabled," said Assistant Secretary for Employee Benefits Security Phyllis C. Borzi. "Claimants deserve to know how decisions are made. They and their families should also have confidence that the process and procedures are not biased against them."

It will ensure that claimants receive a clear explanation of why a claim was denied, their rights to appeal a denial, and their right to review and respond to new information developed by the plan during the course of an appeal, and it requires that plans avoid potential conflicts of interest among those individuals making decisions on benefits claims and appeals. A claims adjudicator could not be hired, promoted, terminated, or compensated based on the likelihood of his denying claims, according to DOL, which said the rule follows a 2015 proposal that generated 145 public comments from plan participants, consumer groups representing disability benefit claimants, plan sponsors, employer groups, insurers, and trade groups representing disability insurance providers.

Improvements in the claims procedure process are generally applicable to disability benefit claims submitted on or after Jan. 1, 2018, DOL's news release stated.

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