Effective for any claims made on or after April 1, 2018, the decision to grant or deny benefits under an ERISA-covered plan will be governed by new rules. Since insured plans are subject to the claims procedures set forth in the insurance booklets, carriers will need to modify the claims procedures outlined in their policies and certificates of coverage. All other plans that are subject to the ERISA claims procedures will need to be reviewed and modified.
The scope of this rule is broad since disability determinations that are subject to the ERISA claims procedures, are made under welfare benefit plans, retirement plans and even top-hat programs (i.e., plans maintained for a select group of management or highly-compensated employees).
The new rules follow more closely the claims process and timelines for health care benefit claims. The only way to avoid the complexity of these new rules is to have the disability determination made by a third party. For example, even under a top-hat or retirement plan, the plan administrator may rely on a determination of disability made by the Social Security Administration or by the carrier under another program.
Any plan or program that may provide benefits upon a determination of disability (that is not insured with the insurance carrier making such determination) should be reviewed to determine whether you want the plan administrator to retain discretion over the disability determination or rely on a third-party to make that call. Depending upon your decision and current plan terms, you may need to amend plan provisions, claims procedures and summary plan descriptions.