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December 8, 2017 

Via E-Mail: e-ORI@DOL.gov and 

U.S. Mail 

Office of Regulations and Interpretations 

Employee Benefits Security Administration 

Room M-5655 

U.S. Dept, of Labor 

200 Constitution Avenue NW 

Washington D.C. 20210 

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

Disability Benefits 

 RIN No.: 1210-AB39 

Regulation: 29 C.F.R. §2560.503 

Dear Deputy Assistant Secretary Hauser: 

I am writing to request that the Department does not modify or further delay 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. 

I have represented long-term disability (LTD) claimants for over 12 years. I have 

helped hundreds of LTD claimants receive disability benefits - both through the 

administrative claim process and through litigation. My clients are individuals who have 

suffered the double blow of serious illness or injury and the loss of work income. Timely 

receipt of LTD benefits is often the only thing that stands between my clients and losing 

their homes because they are unable to pay the mortgage or other financial catastrophes. 

Indeed, I have had clients who have died while their administrative claims were pending. 

LTD claimants often have difficulty obtaining re presentation in the administrative 

claim process and lack the resources necessary to gather the evidence necessary to 

contest a claim denial. The Department needs to make sure the Secretary’s claim review 

regulation protects the interests of disabled workers. 

While I appreciate the opportunity to comment on the Department’s reexamination of the costs of the final rules governing dis ability claims, the concerns 

raised by the industry are not new. Rather, these objections are simply rehashed 

arguments from the previous hearings. Where those rules are based on policy choices 

that have been made by Congress, by this Department, and by the federal courts 

interpreting ERISA, another argument about the merits is unnecessary. 
EBSA 

December 8, 2017 

Page 3 

Nevertheless, I will address the insurance industry’s primary objection which 

concerns cost increases. 

Costs Will Not Increase 

The industry claims if the final rules go into effect there will be an increase in 

costs that will increase LTD premiums resulting in fewer employees being covered by 

group LTD plans. This assertion is not grounded in fact. 

This costs argument was made in various industry comments to the proposed rules 

before final adoption. The Department concluded that costs would not outweigh the 

benefits. The current cry of increasing costs is an argument that has already been 

considered and rejected. 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). 

Nonetheless, the Department has asked for data addressing whether costs 

increased in response to the last set of rules applying to ERISA disability plans that 

became effective in 2002. In fact, the Department can rely upon information supplied by 

its own Bureau of Labor Statistics. https://www.bls.gov/oPub/btn/volume-4/disabilitvinsurance-plans.htm. 

The data shows that access and participation in employer-based disability 

insurance has increased, not decreased, between 1999 and 2014. This increase occurred 

despite that employment in the service industry has increased, an industry in which 

employees are the least likely to have access to employer-based disability coverage. This 

increase also occurred despite the 2000 disability claims regulations and a series of court 

decisions addressing conflicted decision-making, deemed exhaustion, the need to discuss 

and explain adverse benefits decisions, and a participant’s right to respond to new 

evidence. The Department should therefore be suspicious of any data supplied by the 

industry now that suggests employers would abandon disability coverage due to the costs 

of codifying these principles. The Bureau of Labor Statistics study also demonstrates that 

the cost of disability insurance is extremely modest. Thus, even if costs did increase, 

the increase would be so small that it is unlikely to make any difference in coverage. 

The Department has also asked for data about whether disability premiums 

increased in response to the adoption of statutory bans on discretionary language clauses 

in disability policies by some states. Notably, 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 (20 13); Cal. Ins. Code §10110.6 (2012); Colo. 

Rev. Stat. §16-3-1116 (2008); 50 Ill. Admin. Codes 2001.3 (2005); Md. Code ann. Ins. 
EBSA 

December 8, 2017 

Page 3 

§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). Notwithstanding these statutory developments, access and 

participation in disability plans increased according to the BLS data. 

Also, during the period covered by the BLS document, two major insurers with 

significant market share, UNUM and CIGNA, were examined by the state 

insurance regulators for poor claims handling practices. UNUM and CIGNA had to pay 

fines and consented to Regulatory Settlement Agreements that raised the standards for 

their LTD claims administration. 

http://www.maine.gov/pfr/insurance/publications_reports/exam_rpts/2004/unum_multista

te/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. 

Nonetheless, during this period LTD participation increased. 

Given the above, there is no factual basis to support the industry’s claim that 

modest changes to the Secretary’s claim review regulation would result in cost increases 

or decreased coverage. Accordingly, I urge the Department not to change or delay the 

final rules. 

Sincerely, 

 KANTOR & KANTOR, LLP 

 

Alan E. Kassan, Esq.