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Will the Disability Claims Rules make policies more expensive?

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In 2001, the Department of Labor issued a rule that laid out claims and appeals procedures for disability and health plans sponsored by employers. The regulation of these plans fell under the employee Retirement Income Security Act. In 2015, the Affordable Care Act implemented how disputes for health benefit claims would be handled.

The DOL's Disability Claims Rules were proposed in November 2015. Once the rule is finalized, it takes 60 days before it can take effect. The proposed rule makes it easier for individuals covered by employee-sponsored disability insurance to seek a reversal of claims denials. Specifically, it states there will be:

-- Impartial adjudicators. No bonuses would be allowed for those who meet a certain number of claim denials.

-- Increased disclosure requirements: The reasons for any claims denials must be provided, including whether the denied claim may not have been denied by Social Security standards or other third parties.

Should these requirements not be met, an employee could file a lawsuit against the insurance carrier. The courts wouldn't consider the carrier's evidence for denying a claim.

Those who support the proposed rule say it is needed because there are more claims than ever and there are more disability claims lawsuits now, too. Those who oppose the proposed rule say that it would raise the administration costs, which would end up being passed on to consumers. This, the opposition believes, would result in fewer employers providing disability benefits to their employees.

For those that have had a disability insurance claim denied, the rule sounds promising. In many cases, help from an experienced attorney is highly recommended. The disability insurance policies, claims and denials are very complex and the assistance of a lawyer can be valuable.

Source: benefitspro.com, "Proposed rule could encourage more voluntary disability offerings," Nick Thornton, accessed Oct. 26, 2016

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