&) ReedGroup

December 11, 2017

Submitted Electronicall

Office of Regulations and Interpretations

Employee Benefits Security Administration, Room N-S655

U.S. Department of Labor

200 Constitution Avenue NW

Washington DC 20210

Attention: Claims Procedure for Plans Providing Disability Benefits Examination

Subject: Claims Procedure for Plans Providing Disability Benefits; Extension of Applicability Date (RIN
1210-AB39)

Dear Sir/Madam:

On behalf of ReedGroup, | am pleased to submit the following comments regarding the impact of the
Department of Labor's ("Department") January 17, 2017 Final Rule amending the claims procedure
requirements applicable to ERISA-covered employee benefits plans that provide disability income
benefits ("Final Rule"). ReedGroup, a wholly owned subsidiary of The Guardian Life Insurance Company
of America’, is a recognized leader in helping organizations reduce the cost, compliance risk, and
complexity of employee absence. For over 30 years, we have provided products and services to build a
better health-productivity balance for both our clients and their employees in the pursuit of returning
employees to their full activity, and keeping businesses thriving with a skilled workforce.

ReedGroup’s products and services address the Family and Medical Leave Act (“FMLA”), the Americans
with Disabilities Act, state and municipal leave laws, workers' compensation, and short- and long-term
disability programs. ReedGroup is a third-party administrator (“TPA”) for self-funded, ERISA-governed
disability programs. It is through this perspective that we respectfully submit comments to the
Department with regard to the Final Rule.

We appreciate the Department's decision to grant a 90-day delay of the applicability date of the Final
Rule while it reviews new disability insurance claims data to inform a more robust regulatory impact
analysis. Upon the Department's likely conclusion that the newly-solicited claims data supports our
assertion that the regulation will harm employers, claimants, and the broader disability insurance
marketplace, we encourage swift action to meaningfully further delay the applicability date of the Final
Rule while the Department completes its work to rescind or revise the regulation. To the extent the
Final Rule is not rescinded, we would encourage the Department to consider several improvements to
the most troubling elements of the regulation, which this letter details below.

While we administer self-insured disability plans, ReedGroup generally associates itself with the findings

of the survey the American Council of Life Insurers (“ACLI”) will submit in response to the Department’s
request for new claims information on the broader disability insurance market impact. ACLI’s findings

10355 Westmoor Drive | Westminster, Colorado 80021 | 303.247.1860 | www.reedgroup.com


show that the Final Rule will limit the availability of disability insurance coverage, increase costs to
consumers, and consequently negatively impact the demand of employer-provided disability insurance.

Impact from § 2560.503-1(h)(4), requirement to provide claimant with new information or additional
evidence and the opportunity to respond

The Final Rule requires that a plan administrator must provide the claimant any new information or
evidence during the appeal of an adverse benefit determination. ReedGroup expects that this will likely
harm the claimant by delaying claims administration and causing a postponement in payment of
benefits, and create an expensive, time-consuming process for the plan administrator. Consider the
following:

e The process required under Section (h)(4) creates confusion as to obligations and time frames
for which the parties must supply and respond to information during the appeal process.
Allowing the claimant a “reasonable opportunity to respond” creates a potentially endless cycle
of the exchange of new information for the plan administrator and claimant, and does not
provide guidance for a final and binding decision making process. For example, the Final Rule
lacks clarity whether, which each response to new information, the plan administrator is
permitted to obtain another independent medical exam or third-party review which might be
required to resolve any outstanding issues. ReedGroup estimates that this open-ended burden
will likely result in an extended claims administration process and determination; and therefore,
potential delayed receipt of benefits.

Moreover, given the time frame for resolving these disputes it is likely that these issues could
frequently remain unresolved when the administrator is required to make its final
determination. Because of these issues, and similar issues with respect to subsection (h){4)(ii),
ReedGroup respectfully requests that the Department rescind subsection (h)(4) in its entirety.

Further, the plan administrator must ensure that the secure delivery of new information to the
claimant complies with federal and state privacy laws. Claimant access to secure e-delivery of
such information is limited, and therefore, will likely result in costly transmission of secure data
via overnight mail, which will in turn likely reduce the plan-funding. ReedGroup estimates
$10,000 in additional mailing costs annually, and an approximate $20,000-$30,000 technology
enhancement of our secure portal.

e Claimants, medical providers, employers, and TPAs fare better with exact time frames to
respond to deadlines, including the ability to grant an extension where warranted. Even
appropriately tailored timelines permitting stakeholders to exchange and respond to new
information will lengthen the claims determination and appeals process. If subsection (h)(4)(i)
remains in the final rule, ReedGroup recommends the below timeline improvements:

o Plan administrators should be required to provide new information to claimants within
ten business days of the administrator's receipt of the information;

co Claimants must provide his or her response within 20 business days of the date of the
administrator transmission of new or additional information.

Additionally, the administrator should be provided a reasonable period to review the
information provided by the claimant, and that the deadline for its decision be tolled during the

10355 Westmoor Drive | Westminster, Colorado 80021 | 303.247.1860 | www.reedgroup.com


review. Similarly, if the administrator provides a new rationale for denying the claim to the
claimant, the same process for exchanging information and resolving the claim should be
reflected in subsection (h)(4){ii).

Impact from § 2560.503-1())(7) and (0), providing adverse determinations and written notices ina
culturally or linguistically appropriate manner

ReedGroup expects that the requirement to provide adverse benefit decisions and requested written
notices in a culturally or linguistically appropriate manner will be onerous, time-consuming, expensive,
and may result in delayed benefits to claimants. Written translation services can be logistically
cumbersome for disability plans to implement due to the specialized nature of the vendors, and a
myriad of privacy considerations. An adverse determination letter is individualized to a claimant's
specific circumstance, and typically contains medical information.

Requiring the translation of such a letter into various languages is outside the scope of a plan
administrator’s usual and customary business, and would be an inefficient use of human resources to
ensure the proficiency of personnel in various languages. The added requirement for TPAs to ensure
third-party translation service vendors are compliant with state privacy laws given the transmission of
claimant personal and medical information will be an added burden. Additionally, the written
translation of individual notifications can take up to 30 days or more when using a translation service,
which could result in the further delay the claims determination process.

Finally, adherence to the regulation as enacted would create an additional administrative step by
requiring a TPA to continually stay apprised of changing demographics in counties to determine whether
ten percent or more of that local population is literate in the same non-English language. As
demographics and language trends shift, ReedGroup would be required to continually commission new
translations of plan information and notification templates, as well as spending capital on software
development and updating our claims management software systems. Currently, ReedGroup provides
an oral translation line for claimants successfully, and we propose that plan administrators only be
required to continue to provide this service under a revised final rulemaking.

Thank you for providing ReedGroup with the opportunity to comment. If | can provide any further
assistance, please contact me.

Wf id itted,

tein

ui Holstein, ‘Esq.
Vice President of Compliance

10355 Westmoor Drive | Westminster, Colorado 80021 | 303.247.1860 | www reedgroup.com