Consumer Protections Strengthened in New U.S. DOL Rule on Applications for Disability Benefits

The U.S. Department of Labor moved on Friday to make bolster consumer protections for employees applying disability benefits under employer-sponsored plans

Under the final rule issued on Friday,  plans, plan fiduciaries, and insurance providers comply with additional procedural protections when dealing with disability benefit claimants.

The aim of the rule is to improve the fairness, transparency and accuracy of the disability claims process, the agency said.

Among the rule’s requirements:

  • Disability claimants must receive a clear explanation of why a claim was denied, their rights to appeal a denial and their right to review and respond to new information developed by the plan during the course of an appeal.
  • Plans must avoid potential conflicts of interest among those individuals making decisions on benefits claims and appeals. For example, a claims adjudicator could not be hired, promoted, terminated or compensated based on the likelihood of their denying claims.

The final rule is effective 30 days after its publication in the Federal Register (tomorrow, Dec. 19), and can be viewed here. Improvements in the claims procedure process are generally applicable to disability benefit claims submitted on or after Jan. 1, 2018.

There’s also a fact sheet that comes with the rule that you can read here.

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