From: Susan Grabarsky 

Sent: Monday, December 11, 2017 10:35 PM

To: EBSA, E-ORI - EBSA

Subject: RIN 1210-AB39

December 11, 2017

VIA EMAIL ONLY: e-ORI@dol.gov 

Office of Regulations and Interpretations,

Employee Benefits Security Administration

U.S. Dept. of Labor

200 Constitution Avenue NW

Washington DC 20210

Re: Re-Examination of Claims Procedure Regulations for Plans Providing 

Disability Benefits

RIN No.: 1210-AB39

Dear Deputy Assistant Secretary Hauser, 

We are attorneys who represent claimants and their beneficiaries in employee welfare 

benefit matters. We have evaluated, litigated, and resolved many thousands of ERISA 

disability insurance cases over the past 25 years. Our practice includes all states of 

ERISA claims issues: at the claim level, appeals of adverse claim decisions, litigation in 

the district court, and at the court of appeals.

We previously wrote to request that the Secretary of Labor not delay the effective date 

of the Final ERISA Claims Regulations (“Final Rules”) adopted on December 19, 2016. 

Thank you for the opportunity to comment further on this matter.

We have read the comments submitted by insurance industry representatives against 

the backdrop of the full text of the Final Rules adopted one year ago. It appears the 

industry representatives are re-arguing the same objections which the DOL carefully 

considered prior to adopting the Final Rules. They have not offered any new 

information, which was not available prior to the adoption of the Final Rule, to justify 

violating the requirements of the Administrative Procedures Act (APA) of 1946 (5 U.S.C. 

§551 et seq.). These late objectors are seeking to undo the Final Rules after the fact, in 

a manner that lacks transparency and undermines the sense of trust and fairness that 

should be inherent in the rule-making process.

Notably, the industry argues if the Final Rules go into effect there will be an increase in 

costs that will increase premiums, ultimately resulting in less access to disability 

benefits for the American worker. This argument was made in various industry 

comments to the proposed rules before adoption of the Final Rules one year ago. The 

industry had ample opportunity to provide data supporting their argument prior to the 

adoption of the Final Rules – and they did. The Department properly considered the 

data and concluded that the purported increase in costs would not outweigh the 
benefits. An agency is not required to “conduct a formal cost-benefit analysis in which 

each advantage and disadvantage is assigned a monetary value.” Michigan v. 

Environmental Protection Agency, 135 S. Ct. 1699, 2711 (2015).

The Department has asked for additional data addressing whether costs increased, 

resulting in less access to disability benefits, in response to the last set of rules applying 

to ERISA disability plans that became effective in 2002. Data from the Bureau of Labor 

Statistics shows that instead of decreased access, participation in employer-based 

disability insurance actually increased following those changes and has continued to 

increase steadily between 1999 and 2014. https://www.bls.gov/opub/btn/volume4/disability-insurance-plans.htm.

This steady increase in access to disability insurance occurred despite numerous court 

decisions since 2002 addressing conflicted decision-making, deemed exhaustion, the 

need to discuss and explain adverse benefits decisions, the participant’s right to 

respond to new evidence, and the need to explain the basis for disagreement with 

Social Security decisions. As you know, these are the same principles codified in the 

Final Rules. The BLS data shows that whether they increased costs or not, they did not 

decrease access to disability benefits; indeed, the opposite was found.

The Department has also asked for data about whether disability premiums increased 

and employee access decreased in response to the adoption of statutory bans on 

discretionary language clauses in disability policies by some states. During the time 

period of the BLS study, many states enacted discretionary clause bans. This includes, 

but is not limited to, Arkansas Admin. Code 054.00.101-4 (2013); Cal. Ins. Code 

§10110.6 (2012); Colo. Rev. Stat. §16-3-1116 (2008); 50 Ill. Admin. Codes 2001.3 

(2005); Md. Code ann. Ins. §12-211; Mich. Admin. Codes. R. 500.2201-2202 (2007); 

R.I. Gen. Law §§ 27-18-79; Tex. Admin. Code §3.1202-1203; Tex. Ins. Code 

§1701.062, §1701.002 (2011); WAC §284-96-012 (2009). Whether or not costs rose 

after implementation of these statutory bans, according to the BLS data worker access 

and participation in disability plans continued to increase.

Further, during the period covered by the BLS data, two major insurers with significant 

market share, UNUM and CIGNA, were examined by the states for poor claims handling 

and became subject to fines and Regulatory Settlement Agreements that raised the bar 

for their claims 

administration. http://www.maine.gov/pfr/insurance/publications_reports/exam_rpts/200

4/unum_multistate/unum_multistate.html; 

http://www.maine.gov/pfr/insurance/publications_reports/exam_rpts/2009/pdf/cigna_mcr

eport_2009.pdf; https://www.insurance.ca.gov/0400-news/0100-press 

releases/2013/release044-13.cfm. Many of the claims handling reforms required by 

these Regulatory Settlement Agreements go even further than the principles codified in 

the Final Rules. Yet even during this period, according to BLS data, access and 

participation increased.
Based on the foregoing, we respectfully dispute any claim that employee access to 

disability insurance plans will decrease in response to the codification in the Final Rules 

of the principles set forth in the case law, state discretionary clause bans, and 

Regulatory Settlement Agreements. Accordingly, we are writing to discourage the 

Department from modifying or further delaying the final disability claims regulations 

(Final Regulation on Claims Procedure for Plans Providing Disability Benefits, 81 Fed. 

Reg. 92316 (Dec. 19, 2016)) that are now scheduled to go into effect on April 1, 2018.

Sincerely,

DarrasLaw

/s/ Frank N. Darras

/s/ Susan B. Grabarsky

/s/ Phillip S. Bather

/s/ Heather Gardner

3257 East Guasti Road, Suite 300

Ontario, California 91761-1227

Telephone: (800) 458-4577

Fax: (909) 974-2121

http://www.longtermdisabilitylawyer.com/