The U.S. Department of Labor has issued new regulations affecting how disability claims are handled under ERISA plans that provide disability benefits or base receipt of benefits on the existence of a disability.  While most of the new rules are effective as of January 1, 2018, certain provisions are applicable now, namely that plans must provide in a participant’s adverse benefit determination notice both the internal guidelines relied upon and an explanation of the clinical judgment on which the disability denial is based.

The new rules are not limited to disability plans.  They also apply to any retirement plans, medical plans, and other welfare plans where a participant’s disability has an impact under the plan and the existence of a disability is not based on an independent party’s determination, such as, for example, where an employee’s disabled status references disability as determined by the Social Security Administration or another employee benefit plan (like a long-term disability plan).

Plan sponsors and administrators of ERISA plans that have a disability feature need to take action now to analyze their plan documents, including summary plan descriptions, administrative practices and procedures, and participant notices, to determine the applicability and impact of these new rules and what documentary and procedural changes are needed to ensure compliance with the new rules.

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