New disability claims regs about to take effect: Are you in compliance?

When the DOL first delayed the new disability claims procedures regs (from Jan. 1 to April 1, 2018), there was hope that the burdensome regs would be scraped altogether.

But the new administration said it’s letting the regs stand. That means finance pros only have a few months to make sure their plans will comply will the significant changes.

Key changes

Here are some of the highlights of the new disability claims regs, which take effect on April 2:

• Denial notices must explain completely why the benefit claim was denied.
• Plans must give “adequate time”
  to respond to claim denials.
• Plans must give claimants (i.e., employees) timely access to their entire claim file upon request.
• Plan must write notices in a culturally and linguistically appropriate manner.
• Claimants can request court reviews of denials if the plan doesn’t follow the proper claims process.

If these look familiar, it’s because they mirror many of the protections that were added to medical claims procedures under the ACA.

3 must-take steps

To avoid running afoul of the new ERISA’s disability claims procedures, here are some best practices:

• Identify all ERISA-covered plans that provide disability benefits, long-term disability (LTD) plans, short-term disability plans (STD) and anything else. Virtually all LTD plans are subject to ERISA, but certain STD plans are not. Those STD plans may be exempt from the new regs. However, certain plans you wouldn’t expect to be subject (i.e., retirement plans) may be.
• Review all of your disability claims procedures. How many specific processes need to be updated?
• Amend all necessary plans and other plan documents. This includes summary plan descriptions.