For those recovering from a workplace injury, getting disability claims payments is a necessity. The money helps them afford life and treatment, so waiting on those installments can be financially stressful. For this reason, the U.S. Department of Labor reviewed its disability claims process and issued a final ruling on Dec. 19, 2016. The ruling revises the way employees and employers file claims, as outlined by the Employee Retirement Income Security Act, and will apply to claims made after January 2018.
Why make changes?
Section 503 of ERISA, or Section 503 regulation, has undergone other reviews and changes to strengthen the legislation, weed out issues and better serve those involved. Various studies through the years have informed how the Affordable Care Act deals with disability claims in group insurance, for instance. The DOL also noted that in 2012, a survey conducted by the ERISA Advisory Council found that participants of plans covered by the act did not always have positive experiences with claims procedures. Such reviews inform updates, and the latest is no exception.
The specific review that impacted this final ruling came from public comments, which the DOL read and took into consideration. The final ruling combines a desire to give participants access to fair claims reviews and to ease administrative burdens placed on insurance plans and providers.
In an effort to improve experience and prevent conflicts of interest, the DOL ruling has added the following updates:
- Claimants should receive a notice outlining why their disability claim has been denied.
- Claimants should be given a detailed explanation of how they can file an appeal and how to review new information. This includes being given ample time to make the appeal.
- Claimants must be given access to relevant documents.
- Those making decisions about claims cannot have their employment status altered as a direct result of their decisions to approve or deny claims.
- Documents must be written in a language most people in the community understand.
- Claimants can request court reviews of plans that fail to comply with these new rules.
All of these changes make the process more transparent and are designed to reduce the number of related litigations.
"Claimants deserve to know how decisions are made," Phyllis C. Borz, Assistant Secretary for Employee Benefits Security at the DOL, said in a statement. "They and their families should also have confidence that the process and procedures are not biased against them."
A note for employers
For the most part, insurers are the ones responsible for complying with the ruling. However, employers can speak with these parties to ensure the plans they provide are compliant and right for their staff. Additionally, businesses should share relevant information with employees, such as their rights to documentation – holding sessions in the office and hanging DOL posters in the break room can educate your staff. Because the ruling won't affect claims until 2018, now is the time to ensure everything is in place before compliance is required.