Michael A. McKuin

Attorney at Law

P.O. Box 10577 Email: mike@mckuinlaw.com

PALM DESERT, CALIFORNIA 92255-0577 Web Site: mckuinlaw.com

Telephone (760) 565-7598

FAX: (760) 406-4279 

Cell: (909) 831-7566 

December 8, 2017

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

VIA EMAIL: e-ORI@dol.gov

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 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. 

I have been in private practice for more than 30 years. For a brief time prior to starting my own practice, I 

was in-house counsel for an ERISA plan administrator. I have drafted ERISA plan documents, including: 

comprehensive plan descriptions; summary plan descriptions; administrative services agreements; and 

claims manuals. For more than 20 years, my practice has been almost exclusively limited to handling 

long term disability and health claim disputes, litigation and appeals governed by ERISA, as well as 

ERISA benefit collections for healthcare providers and “in-network” provider disputes (e.g. HMO, PPO 

contract reimbursement). I have handled literally hundreds of benefit claims through all levels of 

administrative review, arbitration, litigation in federal court and before the Ninth Circuit Court of 

Appeals. My Peer Review Rating from Martindale-Hubbell is AV® PreeminentTM, the highest rating 

achievable and I have held that rating for more than 15 years. 

While I am grateful for the opportunity to comment on the Department’s re-examination of the costs of 

the final rules governing disability claims, the concerns raised by the industry are not new. Rather, these 

objections appear to be simply re-argument of the merits of the final rules. 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. 

Practice limited to ERISA benefit claims, litigation & appeals
EBSA

U.S. Dept. of Labor

December 8, 2017

Page Two

Nevertheless, I will address the objections that have been raised that I feel are most in need of a response:

Costs Will Not Increase

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

premiums resulting in less access to disability benefits. 

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/disability-insurance-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 employerbased 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 the participants right to respond to new evidence. I would 

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. This BLS document 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. 

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 (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). 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 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/2004/unum_multistate/unum_multist

ate.html; 

http://www.maine.gov/pfr/insurance/publications_reports/exam_rpts/2009/pdf/cigna_mcreport_2009.pdf. 

https://www.insurance.ca.gov/0400-news/0100-press releases/2013/release044-13.cfm. Nonetheless, 

during this period access and participation increased. 
EBSA

U.S. Dept. of Labor

December 8, 2017

Page Three

Given this history, I dispute any claim that costs will increase in response to the modest changes in the 

final rules. Accordingly, I urge the Department not to change the final rules.

 

Sincerely,

Michael A. McKuin

MM/