On April 1, 2018, the U.S. Department of Labor (DOL) implemented new procedures for processing disability claims.  This change impacts employer-sponsored plans, which deal with disability claims.  The Society of Human Resource Management recommends amending plans as needed, with the significant change in procedure processing.  The final rule was published in the Federal Register in December of 2016 and initial implementation was scheduled for January 1, 2018.  In November 2017, the DOL delayed the rollout of the new procedure until April 1, 2018.

Federal Register: Claims Procedure for Plans Providing Disability Benefits

90 Day Delay Information

The 5 changes for disability claims:

  1. “Requires that the reason for a denied claim be provided as soon as possible and sufficiently in advance of the date that the plan’s decision on appeal is due, to give the claimant a reasonable opportunity to respond.
  2. Ensures that disability claimants receive a clear explanation for why their claim was denied, as well as information on their rights to appeal a denial and to review and respond during the course of an appeal to any new or additional evidence the plan relied on in connection with the claim.
  3. Requires that a claims adjudicator cannot be hired, promoted, terminated or compensated based on the likelihood of denying claims.”[i]
  4. The new procedures can impact disability claims under the employee benefit plan, which is covered by the Employee Retirement Income Security Act (ERISA). In some circumstances, this can impact retirement plans, as well as medical coverage and other perks.  “Nonqualified deferred compensation or supplemental retirement plans…may have different benefit terms or entitlements based on disability.”[ii]
  5. “If employers have fully insured plans, they should monitor their insurance providers to ensure that the new procedures are being followed, Mindy said. For the most part, insurers have started implementing these procedures,” and they have reason to do so, since the courts can hold them liable as plan fiduciaries for a fully insured plan, he noted.  For self-funded plans, typically managed by a third-party administrator (TPA), there’s obviously more for plan sponsors to look at” because the employer bears greater liability for noncompliance.”[iii]

The reporting and disclosure guide for employee benefit plans outlines the required steps plan sponsors and organizations need to take when communicating changes to the summary plan description or summary of material modifications.  The modifications should outline the claims procedures and distribution should take place 120 days after the end of the plan year in which the change is made or as outlined in the reporting disclosure guide.  As discussed in previous articles, we continue to see significant changes in laws and compliance requirements.  Ensure your organization is working with your plan sponsors to communicate the required information.

Reporting and Disclosure Guide for Employee Benefit Plans

 

– Matthew Burr, HR Consultant

 

 

 

[i] https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/new-disability-claims-procedures-take-effect.aspx

[ii] https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/new-disability-claims-procedures-take-effect.aspx

[iii] https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/new-disability-claims-procedures-take-effect.aspx

 

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Published by Mathew W. Burr, MJ-LEL, MBA, MHRIR, GPHR, SHRM-SCP, SPHR, CPHR-INT, Chartered CIPD

Mathew W. Burr, MJ-LEL, MBA, MHRIR, GPHR, SHRM-SCP, SPHR, CPHR-INT, Chartered MCIPD Lean Six Sigma Black Belt ABOUT: Matthew Burr has over 18-years of experience working in the human resources field, starting his career as an Industrial Relations Intern at Kennedy Valve Manufacturing to most recently founding and managing a human resource consulting company; Burr Consulting, LLC, Talentscape, LLC and Co-Owner of Labor Love, a Labor, and Employment Law poster printing company. Prior to founding the consulting firm, the majority of his career was heavy industry manufacturing and healthcare. He specializes in compliance auditing, training labor and employment law, conflict resolution, performance management, labor, and employment relations. Matthew has a generalist background in HR and operations, while providing strategic HR and operational solutions to his clients, focusing on small and medium sized organizations. He works as an Adjunct at Alfred State University, Tompkins Cortland Community College, and Montgomery Community College. He successfully designed an HR Concentration in the business management major that aligned with both SHRM and HRCI certifications, providing opportunities for students to sit for both the SHRM-CP and aPHR certifications upon completion of the degree, concentration, and internship hours as an Assistant Professor of Management at Elmira College (Retired January 2022). Matthew is also the SHRM Certification Exam Instructor, with a current pass rate of 92% on the SHRM-SCP and 83% pass rate on the SHRM-CP and a combined 88% on both exams over a 7-year period of instructing the course (Elmira College, Collin College & The College of St. Rose). Matthew works as a trainer at Tompkins Cortland Community College, Corning Community College, Broome Community College, and HR Instructor for Certification Preparation for the Human Resource Certification Institute (HRCI). He also acts as an On-Call Mediator and Factfinder through the Public Employment Relations Board in New York State, working with public sector employers and labor unions. PUBLICATIONS: Matthew has over 70+ publications including, American Bar Association (ABA) Experience Magazine, Cornell HR Review, Business Insider, New York State Bar Association (NYSBA), PayScale, Society of Human Resource Management (SHRM), and Expert 360 (in Australia). In early 2017, he published his first book, “$74,000 in 24 Months: How I killed my student loans (and you can too!),” proceeded by his second book, which was published in January 2021, “Slay the Student Loan Dragon: Tips and Tricks on How to Conquer the Student Loan Game” and his most recent book, “Unbox Your HR Career” in July 2023. VOLUNTEER WORK: Matthew is currently the New York State Society of Human Resource Management (NYSSHRM) District-Director. EDUCATION & TRAINING: Additional Training & Development:  SHRM Workplace Coaching and Mentoring Recertification Program, 2020  SHRM Foundation Employing Abilities @Work Certificate, 2020  SHRM Foundation Veterans at Work Certificate Program, 2018  Delta County Chamber of Commerce: Delta Force Leadership Program, 2013 FEATURED IN & ON: Matthew was featured on CNN Money, Fast Company, Fits Small Business, Fox News, Magnify Money, Monster.com, My Twin Tiers, Namely, Student Loan Hero, Smart Sheet and CEO Blog Nation, Human Resource Certification Institute (HRCI), Society of Human Resource Management (SHRM). Burr Consulting, LLC Capabilities Statement General Information: Burr Consulting, LLC Owner: Matthew W. Burr Mission Statement: “Strategically Aligning HR as a Partner for the Success of Your Business” Contact Information: Burr Consulting, LLC What's New in HR Blog Talentscape, LLC Labor Love, LLC (Labor Posters) The HR Support Center The Upstate HR Podcast (607)227-4386 Matthew@Burrconsultingllc.com Facebook: Burr Consulting, LLC LinkedIn: Burr Consulting, LLC Twitter: @Burrconsulting Online Certification Verification: Credibly Dun & Bradstreet (D&B) Number: 080776443 NAICS Codes: 541612, 923130, 54161, 541611, 541613, 611430, 541618, 561312, 561311 SIC: 8742, 8748, 9441, 8748001, 8748026 Our Services HR MANAGEMENT New Hire Orientation; Temporary HR Support; Recruiting and Application Tracking; HR Compliance (ADA, FMLA); Employee Handbook; Policy and Procedure; HRIS; HR Audits; Job Profile Design and Revision; HR Key Performance Indicators; EEO Reporting and Classification; State Unemployment Insurance Services TRAINING & TRAINING DEVELOPMENT Organizational Development; Employee Relations; Workplace Violence; Harassment & Sexual Harassment; Union Awareness; Managerial EMPLOYEE & LABOR RELATIONS Employee Relations Training; Conflict Resolution; Mentoring; Workplace Investigations; Labor Contract Costing; Mediation & Arbitration Prep; Fact-Finding; Workplace Investigations; Coaching & Counseling; Performance Reviews; Contingency Plan Development; Contingency Plan Training; State of New York Public Employment Relations Board (PERB)PERB Mediation and Fact-Finding Panels (Albany, NY covering the Elmira, NY Area) HIRING & RECRUITMENT Applicant Tracking Systems; Metric Development; Interview Training; Workforce Planning; Recruitment; Interviews; Job Offers; New Hire Process POLICY & COMPENSATION Group Plans – Healthcare, Dental, Vision, Group Life, Short- and Long-Term Disability; Retirement – 401(k), Profit Sharing, Roth; Workers Compensation; Total Compensation Design and Strategy; Deferred Compensation Plans; Salary Surveys; Reward Systems; Online Payroll; Customized Payroll Processing; Employee Self Service; Customized Reporting HR COMPLIANCE MATERIALS Burr Consulting, LLC is excited to announce a new partnership with Labor Love LLC, expanding our services to include HR printed materials compliant with industry standards.

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