The US Department of Labor (DOL) recently announced that it is moving forward with implementing its final rule on disability claims procedures effective April 1, 2018. The final rule imposes procedural protections and consumer safeguards on disability claims similar to those that apply to group health plans under the Affordable Care Act.
What plans are subject to the final rule?
A benefit is a disability benefit, subject to the final rule, if the plan conditions its availability to the claimant upon a showing of disability. To be subject to the final rule, the important inquiry is not how a plan is characterized (as either a welfare plan or a pension plan) but rather how the determination for disability is made under the terms of the plan. For example, if a claims adjudicator must make a determination of disability in order to decide a claim, the plan is subject to the final rule. In contrast, if the determination of a disability is made by a party other than the plan itself (such as the Social Security Administration or the employer’s long-term disability plan), then a claim for such benefits is not treated as a disability claim and is not subject to the final rule. For example, if a pension plan determination for disability is conditioned on the determination for disability under the plan sponsor’s long-term disability plan, then the pension plan is not subject to the final rule. Note, however, that the long-term disability plan in this example is still subject to the final rule.