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October 27, 2017

Submitted electronically via e-ORI@dol.gov

Mr. Timothy Hauser

Acting Assistant Secretary of Labor

Employee Benefits Security Administration

Room N-5655

U.S. Department of Labor

200 Constitution Avenue, NW

Washington, D.C. 20210

Re: Claims Procedure for Plans Providing Disability Benefits; Extension of Applicability 

Date (RIN 1210-AB39)

Dear Acting Assistant Secretary Hauser:

We welcome the opportunity to comment on the proposed delay (“Proposed Delay”) of 

the applicability date of the rule amending disability claims procedures (81 Fed Reg. 92316 

(Dec. 16, 2016), the “Regulation”) under the Employee Retirement Income Security Act of 1974 

(“ERISA”). As discussed in more detail below, we strongly support delaying the applicability 

date of the Regulation for a period sufficient to allow the Department to consider the effects of 

the Regulation and any necessary changes. Not only does a 90-day delay provide insufficient 

time for insurance carriers and employers to implement changes to comply with the Regulation,

but we also do not believe the Proposed Delay will provide sufficient time for the Department to 

review comments and data provided by stakeholders, determine next steps, and issue a proposed 

final rule consistent with the requirements of the Administrative Procedure Act.

I. Disability Insurance

Disability insurance provides working Americans with crucial income protection from 

unexpected disability due to illness or injury. Access to disability insurance depends on 

affordability, which is directly affected by regulatory, administrative, and litigation costs. 

Employers voluntarily provide disability insurance plans, and they are extremely sensitive to 

policy cost increases. Additionally, recent data indicates that workers typically underestimate 

their risk of incurring a disabling illness or injury and go without the income protection they 

need. This means that the benefits of any additional burdens placed on the voluntary employer 

system must clearly outweigh the costs. 
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II. Impact of the Regulation

The Regulation would likely cause significantly greater administrative burdens on 

employers and carriers, resulting in an expected increase in costs of providing disability income 

protection.1

 For example, the Regulation –

• Complicates the processing of disability benefits by imposing new steps and 

evidentiary burdens in the adjudication of claims, and forcing plans to consider 

disability standards and definitions different from those of the plan; 

• Imposes these new complications without allowing any additional time in which to 

consider the claim and explain the ultimate decision to the claimant;

• Explicitly tilts the balance in court cases against plans and insurers, undoing a 

statutory and regulatory scheme that has worked for decades; and

• Creates perverse incentives for plaintiffs’ attorneys to side-step established 

procedures and clog the courts for a resolution of benefit claims.

We also anticipate that the Regulation will negatively impact consumers. For example, 

the “new rationale” on appeal requirement shortens the amount of time most consumers will 

have to appeal a new rationale for denying their claim, which consequently may deprive them of 

the right to obtain a full and fair review. Additionally, consumers who file suit under the new 

exhaustion of administrative remedies provision likely will wait longer for the court to adjudicate 

their claim, which in many instances may result in the remand of their claim back to the claim 

administrator.

III. Flawed Economic Analysis

The economic analysis accompanying the Regulation was incomplete and failed to 

adequately consider the true cost of the Regulation.2

 In fact, the Department recognized that it 

lacked key data necessary to conduct a thorough quantitative cost-benefit analysis of the 

Regulation. When the Department did attempt to conduct a quantitative analysis, it woefully 

underestimated the actual costs of the Regulation. For example, the analysis concluded that the 

Regulation would impose $3 million of additional costs in the aggregate and across all plans. 

This flawed number was arrived at by estimating, for example, that office staff would spend a 

mere five minutes collecting and distributing additional evidence during the appeals process. In 

another example, the Department estimated that plans would be able to deliver claims 

communications via electronic notices to 75 percent of claimants, many of whom, by nature of 

their claim, either are not at their place of work or do not have the technology at home to handle 

communications in this fashion. 

 1 See, e.g., Comment letters by America’s Health Insurance Plans, The NFL Player Disability & Neurocognitive 

Benefit Plan, Sun Life Financial, and Unum Group, Inc. dated January 19, 2016. 

2 See, e.g., Comment letters from the American Council of Life Insurers and American Benefits Council dated 

January 19, 2016.
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IV. Failure to Demonstrate Need

The Regulation is particularly problematic because the Department failed to demonstrate 

that there are existing problems associated with disability claims adjudication that require 

regulatory action. Disability insurance claims procedures are highly regulated by many state and 

federal consumer protection provisions, and disability claimants already have a full and fair 

claims review process that balances the rights of claimants with the need for operational and cost 

efficiency. Despite the existing consumer protections, the Department elected to apply elements 

of the Affordable Care Act claims procedures to disability plans, inconsistent with the 

Congressional intent behind the Affordable Care Act and ERISA.3 The Regulation is also 

inconsistent with the Department’s long-standing guidance distinguishing disability and medical 

claims procedures. 

V. Necessity of Delayed Applicability Date

It is necessary to delay the applicability date of the Regulation to avoid an unnecessary 

increase in costs to consumers. A delay will provide the Department with additional time to 

review the Regulation and take appropriate steps to address the risks inherent when increasing 

the cost of worker benefits, including possibly rescinding the Regulation. 

The Department should delay the applicability date for a period sufficient to allow a full 

and fair review of the Regulation. In that regard, 90 days is insufficient. The Department has 

committed to reviewing and possibly rescinding or revising the Regulation based on new 

information provided by stakeholders. Historically, it has taken the Department months, if not 

years, to review existing regulations, propose changes, and issue final rules. It is unlikely that 

the Department will have finalized its review of the Regulation by the end of the Proposed 

Delay. Importantly, employers and carriers will need months to take the steps necessary to 

implement the Regulation consistent with any delay or modification, including hiring additional 

staff and updating policies and procedures. 

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In conclusion, we strongly support delaying the applicability date of the Regulation for a 

period sufficient to allow the Department to consider the effects of the Regulation and any 

necessary changes. In that regard, we do not believe the proposed 90-day delay will provide 

sufficient time for the Department to review comments and data provided by stakeholders, 

determine next steps, and issue a proposed final rule consistent with the requirements of the 

Administrative Procedure Act. We further support the Department’s review of the true costs of 

the Regulation and expect to submit additional information for the Department’s consideration. 

 3 Congress specifically intended for ERISA to “to create a system that is [not] so complex that administrative costs, 

or litigation expenses, unduly discourage employers from offering [ERISA] plans in the first place.” Conkright v. 

Frommert, 559 U.S. 506 (2010) (quoting Varity Corp. v. Howe, 116 S. Ct. 1065 (1996)).
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We appreciate the opportunity to comment on the Proposed Delay and would be pleased 

to discuss this issue in more detail.

Sincerely,

American Benefits Council

American Council of Life Insurers

America’s Health Insurance Plans

Cigna

The ERISA Industry Committee

Financial Services Roundtable

The Guardian Life Insurance Company of America

The Hartford

MetLife

Mutual of Omaha

National Association of Insurance and Financial Advisors

National Business Group on Health

NFL Player Disability and Neurocognitive Benefit Plan

Sun Life Financial

Unum Group, Inc.

U.S. Chamber of Commerce