ERISA FAQ: What Is the “Final Rule,” and How Does It Affect Your Valid Claim for Disability Benefits?
The Employee Retirement Income Security Act of 1974 (ERISA) created an administrative appeal that people with group or employer-sponsored disability insurance policies generally had to exhaust before taking their valid claims to federal court. The administrative appeal was designed to give group or employer-sponsored disability insurers a second chance to review a bad-faith denial, thus avoiding preventable litigation.
Over the years, it became clear that asking a group or employer-sponsored disability insurance company to overturn a wrongful denial of benefits and reinstate disability payments was not going as Congress had originally planned. Remember, insurance is a for-profit business, administrative appeals with a group or employer-sponsored disability insurance company seldom sided with beneficiaries. This resulted in the needless and harmful withholding of benefit payments and the unnecessary expenditures of costs and attorney fees for the claimant.
For this reason, the Department of Labor adopted the “Final Rule,” which went into effect April 1, 2018. This rule serves two primary purposes: First, it requires group or employer-sponsored disability insurance companies to give claimants a clear, detailed explanation as to why they originally denied their valid claims, including specifying how exactly insurance company-paid reviewing doctors disagreed with your treating physicians. Second, it prevents group or employer-sponsored disability insurers from firing/punishing adjusters who approve valid claims or promoting/incentivizing adjusters who uphold bad-faith ERISA preempted denials.
The award-winning group ERISA and seasoned employer-sponsored disability lawyers at DarrasLaw have followed the Final Rule since it was proposed in 2015. We understand the new legal rights, consumer protections, and group or employer-sponsored disability benefits afforded to claimants under ERISA because we helped make the law.
DarrasLaw’s top-rated group or employer-sponsored disability lawyers will fight to ensure you benefit from these important changes. If you’re preparing to file an administrative appeal after a wrongful denial of your group or employer-sponsored disability benefits, call our office today at (800) 458-4577 or contact us online to schedule your completely free consultation and free case review.
Administrative Appeals and ERISA Litigation Before the Final Rule
If you have a group or employer-sponsored long-term disability plan, federal ERISA law generally governs your claim for benefits. ERISA does not generally afford group or employer-sponsored long-term disability claimants the same litigation rights or any strong consumer protections that individual disability policyholders have.
With an ERISA plan, you must generally file a comprehensive, exhaustive administrative appeal with your group or employer-sponsored disability insurance company before you can even file a federal ERISA lawsuit. The catch, however, is that your entire litigation record is the only evidence you’re typically allowed to introduce during your federal ERISA lawsuit. Your federal case will be limited to the medical records, statements, and documentation you and your carrier used in the underlying claim and that was submitted during administrative appeal.
Your group or employer-sponsored disability insurer knows this, so it likes to downplay the importance of submitting all medical, vocational, and occupational evidence and tries to confuse you about the real medical and legal issues. If your carrier can trick you into submitting incomplete or insufficient evidence during your administrative appeal, it can subsequently limit your chance of success in your federal ERISA lawsuit.
Over the years, with the help of the national renowned disability litigators at DarrasLaw, legislators and regulators caught onto and are beginning to take notice of the lack of consumer protections in these administrative appeals.
The “Final Rule”
In the government’s attempt to reform the administrative appeals process, the Department of Labor’s Final Rule adopted the following beneficiary friendly amendments and additions to how it regulates ERISA:
- Detailed benefit denial disclosures – If your group or employer-sponsored long-term disability insurance company wrongfully denied your benefits, your denial letter must now contain more than a mere “we deny” sentence. Your group or employer-sponsored disability insurer must detail why it denied your valid claim and explain the precise standards it used when making its wrongful denial. If the group or employer-sponsored disability insurance company-paid doctors disagreed with your treating doctors or the Social Security Administration, they must explain in plain, understandable English exactly why.
- Procedures for new information – Your group or employer-sponsored disability insurer may not deny your benefits based on “new information” submitted or discovered during your administrative appeal without giving you time to review and respond to the new information.
- Exhaustion of remedies – It has now become easier to bring an ERISA case in federal court if your group or employer-sponsored disability insurer fails to abide by these new claims processing and administrative appeal rules. If you, with the help of your group or employer-sponsored disability attorney from DarrasLaw, present evidence of these departures to the court, it may find you’re entitled to collect your valid claims plus get reimbursed for your attorney fees and interest.
- Conflicts of interest – Your group or employer-sponsored disability insurer is also required to implement procedures to ensure that an independent and impartial person evaluates your administrative appeal. If the insurance company-paid physicians or its adjusters reviewing your valid claim appear biased, or the group or employer-sponsored disability insurance company selected them because of their high claims rejection rate, you may file a claim for violation of the Final Rule.
- Changes to claims protocols – Any denial notice must now contain a statement regarding your legal right to your entire insurance file, which you can review with the experienced group or employer-sponsored disability ERISA attorneys at DarrasLaw to see what’s missing or how to perfect your appeal. Your group insurer must also include a list of the guidelines and standards used to deny or terminate your disability benefits so you and your lawyers know what the rules are.
Although the Final Rule just went into effect, group and employer-sponsored long-term disability insurers have known about it for several years. The Department of Labor even granted group and employer-sponsored long-term disability insurers an additional 90 days to comment on and prepare for its implementation. Group insurers now have no excuse if their actions do not conform to these new, friendlier ERISA standards.
The Final Rule and You
This new rule has been a long time coming, and the experienced group or employer-sponsored disability and ERISA attorneys at DarrasLaw advocated for the new consumer protections it brought. With new ERISA standards in place, your group or employer-sponsored disability insurer may find wrongfully delaying, denying, or terminating your benefits more difficult. It also protects compassionate claims adjusters fearful of overturning wrongful denials and potentially gives you a quicker and more fruitful avenue to federal court.
Your group or employer-sponsored long-term disability insurance is now required to set forth the claim reason specifics as well as the medical reasons for your bad-faith denial. It’s now easier for the top-rated employer-sponsored and award-winning group ERISA disability attorneys at DarrasLaw to identify the key issues in your disability case and help you understand the evidence you need to gather to support your valid claim.
Contact DarrasLaw’s Top-Rated Long-Term Group and Employer-Sponsored ERISA Lawyers Now to Discuss Your Long-Term Disability Claim
If you’re preparing to file a valid claim for long-term group or employer-sponsored disability benefits, the ERISA claim game has changed. Nationally renowned disability lawyer Frank N. Darras and his stellar team of top-rated group or employer-sponsored disability ERISA attorneys are continuing to hold insurance companies accountable under the Final Rule every day.
To discuss how the Final Rule affects your group or employer-sponsored ERISA case or to schedule a completely free policy analysis and free claim consultation, contact us at (800) 458-4577 or online. Frank N. Darras and his firms have recovered nearly $1 billion in wrongfully denied and delayed benefits for his clients, and with the Final Rule in place, we’re ready to recover even more.