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ERISA plan regulations protect disability claimants

In April 2018, new procedures for processing disability claims went into place for ERISA benefits plans. These changes, developed by the federal Department of Labor, are designed to provide additional protections for workers dealing with insurers or plan fiduciaries who deny disability benefits claims. The reforms mandate that employee benefit plans must provide a reason for a denied claim as quickly as possible. This reason must be provided in enough time before the appeal deadline to allow the plan member to respond adequately.

In addition, the rule changes require that people who make a disability claim to their ERISA benefits plan must receive a complete explanation of why their claim was denied. They must also receive information about how they can appeal the decision and respond to the plan's claims. They mandate that plan claims adjudicators cannot be hired, fired, penalized or rewarded for their claim denial practices.

While the new rules refer specifically to disability coverage, including both short-term and long-term plans, they can also affect medical plans and retirement funds. These guidelines apply to all claims to employer-provided plans that require a decision as to whether an employee is disabled for benefits purposes. For example, some retirement plans may have exceptions for disability retirement, and some profit-sharing plans could provide specific frameworks for disabled workers to continue to receive benefits.

Workers whose disability claims were denied on or after April 1 may file a lawsuit if the decisions do not meet the guidelines specified in these regulations. A violation of these rules might help a claimant move more quickly to court outside of an internal process for reviewing claims. Employees who have faced claims denials for their employer-funded benefits plans may consult with an ERISA benefits attorney about their options to take action and seek the benefits they need.

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