New Disability Claims Regulations Take Effect for All Plans April 1, 2018
As noted in our previous blog post, The New Disability Claims Regulations: They Don’t Only Apply to Disability Plans, the Department of Labor (“DOL”) issued regulations that revise the ERISA claims procedure regulations for all employee benefit plans that provide disability benefits (the “New Regulations”). These rules can impact not only short-term and long-term disability plans but also qualified retirement plans (e.g., a 401(k) plan), nonqualified retirement plans, and health and welfare plans. The New Regulations were published in the Federal Register on December 19, 2016, and are based on the Affordable Care Act’s enhanced claims and appeals regulations for group health plans. They originally were scheduled to take effect for all claims for disability benefits filed on or after January 1, 2018.
After DOL announced it was considering amending or delaying the New Regulations, it issued a final rule, published on November 29, 2017, formally delaying the effective date to April 1, 2018.
On January 5, 2018, DOL announced in an EBSA News Release that the New Regulations will take effect without modification on April 1, 2018. Despite receiving around 200 comment letters, DOL determined that the comments ultimately did not establish that the New Regulations impose unnecessary regulatory burdens or significantly impair workers’ access to disability insurance benefits.
Now that we know the New Regulations will take effect April 1, 2018, employers may wish to refocus on these New Regulations as soon as possible to ensure that they meet this deadline. As we previously explained here, it may take some time for an employer to comply. After an employer determines which plans (if any) might be subject to the New Regulations, it must decide whether to comply with the new requirements, or to amend its definition of disability so that the determination of disability is made by a third party. Either way, plan amendments, as well as coordination with various service providers and insurers, may be required.