F

N FRANKEL & NEWFIELD, P.C.

ATTORNEYS AT LAW

Justin C. Frankel*
Jason A. Newfield*

“Admitted in NY, CT and PA
October 18, 2017

585 Stewart Avenue
Suite 312
Garden City, NY 11530

Tel: (516) 222-1600
Fax: (516) 222-0513

www.frankelnewfield.com

Office of Regulations and Interpretations,
Employee Benefits Security Administration
Room M-5655

US. Dept. of Labor

200 Constitution Avenue NW

Washington D.C. 20210

Re: Claims Procedure Regulations for Plans Providing Disability Benefits
Examination
RIN No.: 1210-AB39

Regulation: 29 C.F.R. §2560.503-1

Dear Deputy Assistant Secretary Hauser,

I write as an advocate for those disabled employees who are not familiar enough with the
perils of ERISA to share the potential import of the regulations, and to share my great
concern about. any delays in implementation. My firm represents claimants in ERISA
disability litigation throughout the country. We see first-hand the impact upon
unsophisticated claimants arising from the significant disparity of rights in these cases,
some of which are being positively impacted through the implementation of these
regulations.

The Department’s proposed delay of the final regulations raise serious issues regarding
transparency in the rule-making process. The Department finalized rules, after an
extensive notice and comment period that provided 60 days and yielded numerous
comments from various stakeholders. Insurers and plans, and the organizations that
represent them, came out in force. Many of industry comments suggested that there were
cost issues associated with implementing the rules. Those comments weré highly
speculative and rarely were supported by any relevant data. As well, many industry
comments asked for more time to adjust to the new rules, a request that the Department
honored by significantly delaying the effective date.

Now we are told that other input is being relied upon - information that could have been
contributed during the proper notice and comment period but somehow was not. The
ERISA participants and their representatives have no way to respond to this input, since it
is not being made available.. The public is not being told why this post notice and
comment information is more valuable than what was collected during the notice and
comment period itself.


EN FRANKEL & NEWFIELD, P.C.

Page 2

It seems quite apparent that there were meetings with industry representatives, and that
the industry and certain members of Congress sent letters addressing issues more
favorable to the insurance community, but the content of these meetings and letters are
not entirely disclosed. How can this be fair? The industry apparently referenced a
“confidential” study that predicts a significant, but not well articulated, increase in
premiums. Moreover, it is curious that the very short 15-day notice and comment period
does not even provide time for an individual to make a FOIA request to uncover what is
influencing this process.

To make matters worse, the industry study that the Department is now proposing seems
to allow for this process to recede even further into the shadows. The industry will
collect data in a way that will be hidden from the public, and based on this, the
Department proposes to make a new decision on how to protect participants’ rights
reasonable procedures in the adjudication of the disability benefits. How such an
endeavor can be fair defies explanation. Indeed, it seems designed to permit an entirely
unscientific massaging of facts to favor one set of interests over another. There is no way
that participants can effectively comment or provide their own “study,” since they are not
in possession of the data and could not muster the resources to process it, even if they
were. Moreover, we do not even know what the data is being predicated upon,
assumptions being accounted for, or any other detail.

I do not assume that the industry is correct in estimating that premiums for group
disability benefits would increase by 5-8%. (While it may be predictable that premiums
would rise in Vermont in response to a mental health parity statute, it is less clear that
enhanced process-based rules would have even a fraction of that effect.) It simply defies
any basis of logic to make such a broad leap in pricing due to refining the claim process.

But to the extent that premiums would be increased to avoid illusory coverage, ERISA
participants would likely welcome this and it would present no additional burden to
public programs. If the difference in premiums is the difference between paying
something for nothing and paying something for something, the argument surrounding
the increase, regardless of how great, rings hollow. To the extent the Department thinks a
delay is needed to prevent such an increase, this needs to be reconsidered, as the costs
will not outweigh the benefits even in the worst-case scenario.

I request that the effective date of the regulations not be delayed, since the reason for
doing so lacks the necessary transparency and undermines the sense of trust and fairness
that should inhere in this rule-making process.
Thank you considering my comments,
FRANKEL & NEWFIELD, P.C.

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Jason Newfield, Esq.