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What employees should know about filing a claim for disability benefits (part II)

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Earlier this month, our blog discussed how many employees likely made the prudent decision to secure disability insurance via their employer during the recent open enrollment period, understanding that while group disability insurance is typically less exhaustive than private disability insurance, some coverage is certainly better than none.

Furthermore, we discussed these employees should derive some comfort from the fact that their group disability plan is covered by the Employee Retirement Income Security Act of 1974 (i.e., ERISA), a landmark federal law enforced by the DOL that essentially safeguards disability benefits and establishes standards for plan administrators.

In today’s post, we’ll explore the specific time period established by ERISA for plans to evaluate disability claims and provide you, the prospective claimant, with a much-needed decision concerning the availability of benefits.

Claim reviews

In general, ERISA dictates that plans have a “reasonable period of time,” meaning no more than 45 days, to render a decision on disability benefits.

If more time is needed, a plan can extend this timeframe for review by an additional 30 days and, if necessary, another 30 days. However, in either case, it must notify you in writing ahead of the expiration of the preceding timeframe, meaning before the end of the first 45-day period and before the end of the first 30-day extension.

This notification must outline why more time is needed, any unresolved issues and when a decision is expected. Furthermore, the notification sent before the end of the first 45-day period can also request additional information, providing you with sufficient time (i.e., 45 days) to supply it.

As far as issuing a final decision is concerned, the plan has either 30 days after receipt of any requested additional information or the time otherwise allotted under the circumstances ends.

It’s important to note that if any additional extensions are required outside of the aforementioned two, the plan must secure your consent. In addition, the time limits described above are counted in calendar days, such that weekends and holidays are included.

We’ll continue this discussion in a future post, exploring the rules and regulations promulgated by the DOL regarding appeals of any claim denials for disability benefits.

Source: U.S. Department of Labor, “Filing a claim for your health or disability benefits,” November 2016

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