The Department of Labor recently announced that the delay of its Final Rule regarding disability claims procedures is, in fact, final. This means that all employee welfare plans that provide benefits based on a determination of disability, including health plans, stand-alone disability benefits, 401(k), pension, and other retirement plans must have these new procedures, including new contract provisions, in place by April 1, 2018. I know what you are thinking....."How do I update my plans for this?" Well, that is the beauty of HR Cubed. Our platform automatically updates all of your self-funded plans and documents (i.e., WRAP plan, etc.) for this April 1, 2018 deadline. Fully-insured plans? Sure, no problem. Although the carrier is responsible for this update, we got you covered just in case they are not as quick as HR Cubed. With the fully-insured plan as part of the WRAP plan, we update those provisions to ensure you are compliant (even when others don't)!
Any plan governed by ERISA that has provisions for disability determinations must implement new claims procedures, whether that be long-term disability benefits, most short-term disability plans, group health plans, stand-alone disability benefits, 401(k), pension, and other retirement plans. These new procedures must be in place by April 1, 2018 and apply to all disability related claims received on or after April 1.
The new procedures won't apply to non-ERISA arrangements.
What do affected plan sponsors need to do?
For employers that maintain insured disability plans, you will want to communicate with the insurance carrier to discuss how the new procedures will be applied and documented. However, on the documenation front, HR Cubed has you covered (see above).
Employers with self-funded disability plans or retirement plans with benefits based on disability determinations will need to update plan documents and summary plan descriptions to reflect the new requirements. These employers will also need to update their claims procedures, to include the new claims denials and appeals requirements outlined briefly below. Again, HR Cubed has you covered here!
Self-Insured with TPA
Additionally, if an employer is self-funded but has a third-party administrator (“TPA”), the employer should amend the TPA administrator agreement to ensure the TPA is handling claims in compliance with this new rule and in compliance with the plan documents.
What are the new requirements?
Similar to the new claims requirements for group health plans under the Affordable Care Act, new requirements for disability claims include but are not limited to:
The individual who decides a disability claim must not have any conflict of interest or incentive to deny or approve the claim. This includes certain aspects of that individual’s compensation, promotion, termination, etc.
Claim denial notices must be both culturally and linguistically appropriate, including assistance with filing claims in non-English languages.
Certain appeals procedures must be put into place, such as providing the claimant, free of charge, with any new or additional evidence considered, relied upon before the administrator may deny an appeal.
Potential ‘penalty’ of faster access to litigation and court decision for claimants for whom the plan administrator did not comply with the new claims denials and appeals procedures.
Again, employers with applicable ERISA benefits plans must have these new procedures, including new contract provisions, in place by April 1, 2018.
Important to note, however, is that by the time you finished reading this post, HR Cubed would have already updated all your requisite documents and saved you time and money.
And yes, we get it! It's pretty cool what HR Cubed can do for your peace of mind!