HR News, Human Resources

DOL Postpones New Disability Claim Rules

Hey Compliance Warriors!

The new rules for the procedures on how to handle disability claims have been delayed from being effective January 1, 2018 to April 1, 2018. Read on for more on this…

Article via: www.mondaq.com

“On December 16, 2016, the Department of Labor issued final rules amending the claims procedures applicable to employee benefit plans that provide disability benefits and are subject to ERISA.  The final rules were to have been effective January 18, 2017 and apply to claims on or after January 1, 2018.  (See our January 2017 Comp and Benefits Brief for a summary of the changes made.)  Recently, the DOL delayed the date the rules are first applicable to claims from January 1, 2018 to April 1, 2018.

Under pressure from insurers and to satisfy the Executive Order 13777 that calls for reducing regulatory burdens by repeal or amendment, the DOL has provided a 90-day delay and has invited submission of data and information by December 11, 2017 that may show why the rules will result in unwarranted cost and reduction in disability coverage.  It is not clear whether insurers can submit information that persuades the DOL to delay, amend or terminate the new rules.

The new rules clearly apply to long term disability plans and most insurers are prepared to make required changes.  However, the rules may also apply to short term disability plans, unless the short term disability benefits are provided under a payroll practice.  Retirement plans such as 401(k) or pension plans may also provide disability benefits that would trigger the more detailed claims procedures.  Whether employers handle claims under these plans, or contract out claims administration to a third party, these plans should be prepared for the new claims procedures.

For plans where disability benefits are tangential to the basic delivery of benefits, there may be some ways to modify the disability benefits or the definition of disability to avoid the more cumbersome new rules.”

For more information:


Until Next Time, Be Audit Secure!

Lisa Smith


About Lisa Smith

Lisa Smith is CEO of Andere Development, LLC and Chief Content Developer at BeAuditSecure.com. Follow her on Twitter, connect with her on LinkedIn, and listen to her Small Business Spoonfuls Podcast. 

Log in or Register to save this content for later.