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Northwest OH Legal Blog

Tuesday, October 24, 2017

New Disability Regulations—No More Kicking the Can!

The Department of Labor(DOL) issued final regulations on December 19, 2016 that significantly modify the procedures and forms associated with disability claims’ denials for qualified health and retirement plans that base disability determinations on the decisions reached by plan administrators, plan sponsors or Trustees in the case of multi-employer benefit plans.  The final regulations will apply to disability benefits claims filed on or after January 1, 2018.  Many plan sponsors and trustees have been tabling emphatic actions to comply with these regulations because rumors were swirling regarding their repeal.

While the DOL announced in July 2017 that it is reviewing these regulations, some seven months after their passage, for “questions of law and policy” it is highly unlikely that the final regulations will be revised or reversed in their entirety.  Therefore, plan sponsors and Trustees should move forward in changing their plans, summary plan descriptions (SPD’s), disability application forms and denial letters to comply with the main purpose of these final regulations to meet the January 1, 2018 deadline. 

Most of these changes will take place when the definition of “Total and Permanent Disability” is explained.  If a plan does not rely on a third-party’s definition, such as that of the Social Security Administration or an outsourced long-term disability plan, the discretionary manner in which Total and Permanent Disability is defined using impartial and specific parameters with scientific judgements must be disclosed for disability denials.  Furthermore, impartiality must be used when a plan retains medical or vocational experts to assist them in making disability determinations.  Benefits’ denial notices must include detailed explanations for denials after December 31, 2017 and if new information is relied upon when considering a participant’s appeal, the participant must be informed of such “new” information and must have the chance to respond to or rebut it. Other key compliance measures include notices that are culturally and linguistically appropriate and opportunities for participants to go directly to the courts to enforce their rights if plan sponsors fail to comply with these new regulations.

The changes that must be made for plans to prove that they are in compliance are plainly set out in Article II of the Final Regulation, 29 CFR Part 2560.  The final regulations may be explored in their entirety at the following link:

https://www.gpo.gov/fdsys/pkg/FR-2016-12-19/pdf/2016-30070.pdf#page=1.

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With an office located in Toledo , OH Allotta Farley Co., L.P.A. serves clients throughout northwest OH with various legal matters. Areas of service include Allen County, Ashland County, Auglaize County, Crawford County, Defiance County, Erie County, Fulton County, Hancock County, Hardin County, Henry County, Huron County, Lucas County, Marion County, Mercer County, Morrow County, Ottawa County, Paulding County, Putnam County, Richland County, Sandusky County, Seneca County, Van Wert County, Williams County, Wood County, Wyandot County.

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