Changes to the Disability Benefit Landscape
Employee disability benefit plans now must comply with new requirements designed to strengthen the claims and appeals process.
The Department of Labor’s (DOL) requirements, effective April 1, 2018, apply to plans governed by the Employee Retirement Income Security Act (ERISA).
Section 503 of ERISA requires employee benefit plans to:
• Provide claimants adequate notice, in writing, if their benefit request is denied.
• Give claimants whose request was denied a reasonable opportunity to have their case reviewed.
The DOL’s final rule includes details about what the reports should include, such as a discussion of reasons for the denial and what actions claimants must take to request a decision review. Plan administrators must also take steps to avoid conflicts of interest.
In related news, fewer Americans are seeking Social Security disability benefits. The federal government previously was concerned the program would run out of money by 2023. Because claims have decreased so much, the government now believes there will be enough money until 2032.
Observers attribute the decrease in claims to a strong economy and more lower-skilled jobs available that don’t require manual labor.
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