The U.S. Department of Labor (DOL) has decided to let major new group disability insurance claim review standards take effect April 1, officials have announced.

The Employee Benefits Security Administration (EBSA), the DOL division in charge of employee benefits matters, agreed in November to push the effective date back to April 1, from Jan. 1, to give disability insurers, employers, and benefit plan administrators and trade groups more time to prove that the new regulations would hurt the group disability market.

The DOL received about 200 comment letters after it postponed the effective date of the regulations, but "only a few comments responded substantively to the department's request for quantitative data to support assertions that the final rule would drive up disability benefit plan costs by more than the department had predicted, cause an increase in litigation, and consequently reduce workers' access to disability insurance protections,' officials say in an announcement of the decision.

"The information provided in the comments did not establish that the final rule imposes unnecessary regulatory burdens or significantly impairs workers' access to disability insurance benefits," officials say.

DOL officials completed work on the group disability claim regulations shortly before Donald Trump became president.

DOL officials have also uphold some other Obama-era standards in recent months.

On Thursday, DOL officials released proposed association health plan regulations that would prohibit an association health plan from using health status information other than age when deciding whether to admit an employer, or when setting rates for an employer's employees.

In November, at a House hearing, DOL Secretary Alexander Acosta testified at a House committee hearing that, although DOL has put off using some compliance guidelines associated with the DOL fiduciary rule, the rule itself is still in effect, and the principle that retirement advisors must act in customers' best interest is still in effect.

The regulations

The new group disability claim regulations:

Set standards for the completeness of claim denial notices.
Let claimants respond to new information while claim reviews are in progress.
Establish new claim reviewer impartiality standards.
Give claimants the ability to go to court if plan administrators violate the claim review standards.

Advocates for group disability claimants argue that disability plans now treat claimants poorly, reject many claimants who have already qualified for Social Security Disability Insurance benefits, and use procedures that conflict with the goals of the Employee Retirement Income Security Act of 1974 (ERISA).

Group disability insurers, employers, benefit plan administrators, and groups for disability plan and sponsors have argued that the new regulations will lead to more, time-consuming exchanges of information between plans and claimants, and that the court access provisions could lead to a big increase in litigation.

Instant Insights /

Trump's team to let major disability claim regs take effect

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