Improvements Expected for Disability Insurance Benefits Claims Handling Procedure
In late 2015, the Department of Labor (DOL) Employee Benefits Security Administration (EBSA) issued a Proposed Rule designed to strengthen the current procedural protections governing claims for disability insurance plans governed by the Employee Retirement Income Security Act of 1974 (ERISA). Presently, ERISA regulations require disability insurance plans to perform full and fair reviews of insured workers’ disability benefits claims. In practice, however, these regulations frequently fall short. The DOL has recognized the need to revise the current regulations to ensure disability benefit claimants receive a fair review of their denied claims.
The notice and comment period was open through January 19, 2016. Numerous comment letters were submitted. While the rule has not yet been finalized, it is expected to enhance claimants’ rights to full and fair reviews of their disability insurance benefits claims. This is good news for workers!
Proposed Rule Curtails Unfair Claim Denials by Disability Insurance Companies
Hawks Quindel disability benefits lawyers are excited about the Proposed Rule because it calls out some of the standard practices of insurance companies which, on a gut level, we know are biased, unfair and wrong. For instance, our clients are often frustrated that an insurance company can deny their claim when the clients’ own treating physicians – who have known them and treated their medical conditions for years – restrict them from returning to work. Sometimes, the insurance company has obviously enlisted a biased medical professional hired specifically to provide an opinion favorable to the insurance company.
Under the Proposed rule, in cases where the claimant’s doctors and/or the Social Security Administration have determined that he or she is disabled, disability insurers must explain why they disagree with the favorable disability determinations prior to making an adverse disability determination.
Denial Incentives Would Be Illegal for Claims Representatives or Medical Experts
Among other proposals, the DOL regulation would require administrators to “ensure that all disability benefit claims and appeals are adjudicated in a manner designed to ensure the independence and impartiality of the persons involved in making the decision.” This means it would be illegal for insurance companies to hire or compensate their claims representatives or medical experts on the basis that they were more likely to make decisions that would support the denial of benefits. We frequently call out plans for relying on a limited pool of medical experts with a demonstrated history of rejecting evidence of disability.
Denial Must Be Explained, Client Given Opportunity to Respond
The proposed regulations require plans to provide a claimant with any new or additional evidence considered or generated by the plan prior to denying a disability claim on appeal. For example, if the plan hires a medical expert to review the claim file and that expert opines the claimant is not disabled, the plan must provide a copy of the opinion to the claimant to allow him or her to respond prior to making a final decision the claim.
The Hawks Quindel disability benefits team is monitoring the DOL proposed regulations and their impact on disability claims. In the meantime, we continue to emphasize issues related to improper bias, conflict of interest, and substandard claim assessments when appealing wrongful denials of disability benefit claims. If you have questions about your short or long term disability insurance benefits claims handling process, please contact one of the Madison disability benefits lawyers at (800) 610-0040 or (608) 257-0040 for a free evaluation of your case.