We’re more than a month into Spring now even if it doesn’t feel that way outside every day. If you haven’t had a chance to start your Spring cleaning at home yet, let’s get in the mood by starting on your Spring cleaning at work. We’re assuming if you’re behind schedule at home, you might also be a little behind at work too. If you’ve already updated your disability claims procedures and related plan documents, pat yourself on the back and don’t bother reading any further! But, if you’re like the rest of us…
STEP ONE: Dig out your disability claims procedures. Ready? Let’s go!
You’ve probably heard that new claims procedures apply to adverse benefit determinations for disability benefit claims filed under ERISA plans on and after April 1, 2018 – this means your procedures may need to be updated.
STEP TWO: Confirm which of your plans are subject to ERISA (remember, whether a plan is or isn’t tax-qualified isn’t part of this determination).
ERISA plans include pension plans (those designed to provide retirement income or that result in the deferral of income to termination of employment or beyond) and welfare plans (those providing medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, death, disability, death or unemployment, or vacation benefits, apprenticeship or other training programs, or day care centers, scholarship funds, or prepaid legal services).
STEP THREE: Confirm which of your ERISA plans offer a disability benefit.
A disability benefit is more than just replacement income while you’re disabled. A disability benefit includes any benefit that you receive due to disability, including, for example, accelerated vesting or distribution.
STEP FOUR: Confirm which of your ERISA plans that offer disability benefits make a disability determination under the plan.
The new claims procedures only apply if disability determinations are made under the plan, so plans that use a third-party benefit determination (e.g., disability means “disabled as determined by the Social Security Administration” or “disabled as determined under our long-term disability plan”) escape this update.
STEP FIVE: Update your disability claims procedures.
- Apply the same independence and impartiality rules to disability benefits claims as you currently apply to medical claims.
- Provide the additional information required in adverse benefit determinations.*
- Ensure that your adverse benefit determinations are provided in a culturally and linguistically appropriate manner.*
- Provide evidence and/or rationale required to ensure the claimant receives a full and fair review.*
- Understand that if you fail to satisfy all of the new claims procedure requirements, the claimant is considered to have exhausted administrative remedies and has the right to proceed to bringing suit in court.
*Full details of the requirements can be found at https://www.federalregister.gov/documents/2016/12/19/2016-30070/claims-procedure-for-plans-providing-disability-benefits.
STEP SIX: Mark updating your disability claims procedures off of your Spring cleaning list!
Dusting off your disability claims procedures may be enough to check off of your Spring cleaning list today… But, note, in addition to updating your procedures, your plan documents, summary plan descriptions, and any other documents that address disability claims procedures also may need to be updated. For qualified plans, make sure the relevant documents are updated by the end of the current plan year. Though we’re certain there are more tasks on your to-do list today, we hope we’ve been able to help you complete one. Keep that momentum going – you’ve got this!