The U.S. Department of Labor has announced a final rule requiring that plans, plan fiduciaries, and insurance providers comply with additional procedural protections when dealing with disability benefit claimants.
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“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, quoted in a press release. “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.”
The new rule is designed to ensure that disability 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.
The rule also requires that plans avoid potential conflicts of interest among those individuals making decisions on benefits claims and appeals. For example, a claims adjudicator could not be hired, promoted, terminated, or compensated based on the likelihood of his or her denying claims.
The final rule is effective 30 days after its publication in the Federal Register, and can be viewed here. Changes to the claims procedure process are generally applicable to disability benefit claims submitted on or after January 1, 2018. Read the fact sheet.