In 2016, the Department of Labor released a final rule that now must be applied to all disability claims under ERISA (Employment Retirement Income Security Act). While employers have been working to ensure they comply with the final rule, it is important that employees also understand the new guidelines to ensure they are being treated fairly and getting the benefits they deserve.
Under the final rule, any employee that has had their claim denied must be given adequate written notice fully explaining the reasons for the denial. These reasons must be written in plain language that can be fully and easily understood. When such a claim has been denied, the employee trying to claim benefits must also be given the opportunity for a full and fair review by the fiduciary denying the claim.
When new information has been received during the appeal stage, or after the claim has been denied, plans cannot deny benefits based on this information if they did not have it when they initially denied the claim. Claimants that have been denied a claim must also be given the opportunity to review the claim file and all relevant documents pertaining to it.
Perhaps one of the biggest changes that comes with the final rule is that claims for benefits, and appeals, are decided on by an objective and independent party. Claims experts cannot be hired, terminated, or compensated based on the likelihood of that person denying benefit claims.
“This is a good step forward for any employee wishing to claim the disability benefits they deserve,” says Cade Parian of The Parian Law Firm, LLC. “The impartial review in particular, will ensure that those who need benefits receive them, regardless of the company’s profit margins.”
Plan sponsors typically have until December 31, 2018, to start abiding by these new guidelines, unless they are following something other than a calendar year plan. However, it is important for employees to understand that even when employers wait until the end of the year to make the guidelines part of their plans, they should be retroactively effective to April 2, 2018.