D. Requiring Impartiality of Consultants Is Required Under ERISA.

We note that one commenter, the Unum Group (Comment 76) raised a soft objection to
codifying impartiality. ERISA already demands impartiality. As the Court noted in United States
v. Aegerion Pharmaceuticals, Inc., through ERISA, insurers have effectively insulated conduct
that would otherwise get them in hot-water. John H. Langbein, Trust Law as Regulatory Law:
The Unum/Provident Scandal and Judicial Review of Benefit Denials Under ERISA, 101. Nw.
U.L. Rev. 1315 (Spring 2007)).

E. Deemed Exhaustion Will Not Increase Costs.

The allegation that deemed exhaustion will increase costs is speculative. DOL should not
take this claim seriously unless the interest groups provide data to back their contention.
Claimants are unlikely to rush to court on day 46 or day 91 if a decision has not been made.
Smart counsel will realize that this is not productive given the judicial creation of “substantial

compliance” with time-lines.

If DOL needs additional information, then kindly contact the undersigned at
jonathan@erisaattorneys.com or 617-357-9700.

Thank you for your consideration.

Sincerely,

/s/Jonathan M. Feigenbaum
Chair - MELA ERISA Committee

Christina L. Montgomery, Esq., President Elizabeth Mason, Esq., Secretary
Beth R. Myers, Esq., Vice President Patrick D. Banfield, Esq., Treasurer


C. Codifying Abram v. Cargill, 395 F.3d 882 (8th Cir. 2005) Is Not Costly.

“Sandbagging” plan beneficiaries is a documented problem perpetrated by fiduciaries
during the pre-suit appeals process. Relying on newly developed substantive evidence during the
pre-suit appeal is a common fiduciary abuse that undermines “Full and Fair” review. In Abram
v. Cargill, 395 F.3d 882, 886 (8th Cir. 2005), the court articulated the problem as follows:

{w]ithout knowing what “inconsistencies” the Plan was attempting to resolve or
having access to the report the Plan relied on, Abram could not meaningfully
participate in the appeals process. . . This type of “gamesmanship” is inconsistent
with full and fair review.

Id.

Given that in some jurisdictions it is virtually impossible to supplement the record in
litigation, the regulatory change offers some assurance that the pre-suit appeal process will not
be not rigged against the plan beneficiary. Fiduciaries should not be permitted to use new
substantive evidence to avoid paying a claim without permitting the plan beneficiary to respond
to the evidence. Again, ERISA is about notice and procedure. A fair process is undermined if
the fiduciary can withhold evidence until the last minute knowing that the plan beneficiary
cannot respond. “We have invoked our equitable and common law powers to prevent a plan
from taking actions, even in good faith, which have the effect of ‘sandbagging’ claimants Bard
v. Boston Shipping Ass'n, 471 F.3d 229, 244 (1st Cir. 2006). The guess-work of weighing the
equities and creating certainty is achieved in codifying Abram by regulation. Courts will not
need to wrestle with whether the later developed evidence by the plan was substantive, known
in advance, reasonably known in advance, or otherwise undermined Full and Fair Review.

Considering that judicial review addresses the final ERISA administrative decision, the
method of reaching the final decision must be fair. The Courts’ fixation with pre-suit finality
speaks for the need to codify Abram. “It would offend interests in finality and exhaustion of
administrative procedures required by ERISA to shift the focus from that decision to a moving
target by presenting extra-administrative record evidence going to the substance of the
decision.” Orndorf v. Paul Revere Life Ins. Co., 404 F.3d 510, 519 (1st Cir. 2005).

The interest groups had their chance to explain how this might raise costs, and did not
do so. It is hard to fathom how providing a modicum of fairness in the process will make benefits
too expensive.

Christina L. Montgomery, Esq., President Elizabeth Mason, Esq., Secretary
Beth R. Myers, Esq., Vice President Patrick D. Banfield, Esq., Treasurer


Massachusetts
MELA f=

Lawyers

Association, Inc.

December 7, 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

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:

The Massachusetts Employment Lawyers Association (“MELA”) requests that the
Secretary refrain from modifying or further delaying the implementation of 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 am the ERISA chair of MELA. MELA is a not-for-profit organization comprised of
attorneys who devote a majority of their practice to representing employees, rather than
employers. We have approximately 175 members. Our mission is to enforce and to advance
employee rights. We do this by working to increase awareness, improve advocacy, monitor
legislation and support members in their practices.

I offer these comments on behalf of MELA, as I focus my practice in representing
individuals in ERISA matters. I have been a lawyer for approximately 30-years. I began
concentrating in ERISA in the early 1990s and since that time have devoted more and more of
my time exclusively to ERISA work. Currently, more than 80% of my time is spent on ERISA
matters; the majority relating to long-term-disability claims. This focus is consistent with the
litigation statistics noted by the Secretary and the Federal Judicial Center. Therefore, my
comments are tuned to this area.

Christina L. Montgomery, Esq., President Elizabeth Mason, Esq., Secretary
Beth R. Myers, Esq., Vice President Patrick D. Banfield, Esq., Treasurer


In addition to my volunteer work at MELA, I have served in other bar capacities focusing
on ERISA, or ERISA related areas of the law. I have served as Chair of the Health and Disability
Committee under the Torts Trial and Insurance Practices section of the American Bar
Association; Chair of the Insurance Section with the American Association for Justice; Chair of
the ERISA litigation group with the American Association for Justice; and I am a Senior Editor
to Employee Benefits Law, Bloomberg/BNA, which is the leading treatise on employee benefits.
1am also a Fellow of the American College of Employee Benefits Counsel.

Again, MELA applauds the Secretary of Labor (“DOL”) for the department’s efforts to
bring the current claims regulations up to date. As ERISA affects more than 150 million
Americans, the regulations demanded updating.

ERISA is a very challenging area of law. For a law that was enacted to protect the rights
of individuals, the law has developed through the Courts in the opposite manner. This is evident
by the lack of attorneys that practice in this area representing individuals.

When Congress enacted ERISA, it created a strict fiduciary standard for those individuals
and entities involved in the administration or management of employee benefit plans or their
assets, a standard that requires those persons or entities to make decisions solely in the interests
of the plan’s participants and their beneficiaries. Over time this has not panned out. ERISA is
concurrently a shield for those actors, insulating them from unfair conduct, and a sword.

Given the importance of pre-suit exhaustion under ERISA, the Secretary’s claim
regulations are essential to provide clarity to both employees and plans. Also, considering that
Congress did not impose parallel substantive standards on health care plans, long-term-
disability plans or other welfare benefit plans as it did for the pension side of ERISA, claims
regulations fill an important void left by Congress.

As you have heard from others representing individuals, the ERISA regime is stacked
against participants. Recently the United States District Court for the District of Massachusetts
summed up this point. United States v. Aegerion Pharmaceuticals, Inc., 2017 WL 5586728, at
*7 (D. Mass., November 20, 2017)("The insurance industry found it could largely immunize
itself from suit due to the Employee Retirement Income Security Act .”) Even with the final rules
that should go into effect after the New Year, plan participants will not have achieved the
“higher-than-marketplace standards” that the Supreme Court insists are required in processing
ERISA claims. MetLife v. Glenn, 554 U.S. 105, 115 (2008). Worthy claimants continually lose
the benefits that they paid for and deserve to be paid.

Christina L. Montgomery, Esq., President Elizabeth Mason, Esq., Secretary
Beth R. Myers, Esq., Vice President Patrick D. Banfield, Esq., Treasurer


A. Interest Groups’ Claim Of Increased Costs Is Refuted By Impartial Data.

The interest groups (primarily insurance companies and their spokespeople) advocating
delay had plenty of time during the comment period to bring to the attention of DOL the
concerns that they have now raised after finalization of the regulations. These groups claim that
costs will rise too much, and the availability of employee benefits will go away.

We located information from the Bureau of Labor Statistics that shows the availability
of employer offered long-term-disability insurance (LTD Coverage) has increased since the late
1990s through 2014. (See  https://w Is. gov/opub/btn/volume-4/disability-insurance-
plans.htm.) Given the tightening labor market evidenced by decreasing unemployment,
employers will need to offer LTD Coverage to attract and retain employees. In addition, some
of the stocks of publicly traded insurance companies offering LTD Coverage (Unum, AETNA
and others) have been rising in value over the past few years. Bottom-line, the interest groups’
claims of spiraling cost are not backed by credible data.

In addition, we are unaware of any evidence suggesting that state imposed discretionary
bans have increased the cost of LTD Coverage. If that allegation were true, | would presume
the interest groups would have shared the proof with DOL. This does not appear to be so, given
that I made a FOIA request to DOL a few months ago on that point, and was not provided with
any information backing this allegation. Moreover, in reviewing information posted by the
Society of Actuaries, we were unable to find data supporting such an allegation of the insurance
companies.

B. Requiring ERISA Fiduciaries To Explain Why They Disagree with SSA Findings Is
Supported By A Mandate From the Supreme Court.

The Supreme Court was troubled 10-years ago when an insurer demanded that an
insured apply for benefits with the Social Security Administration (“SSA”) representing that she
could not engage in any gainful employment, but when it came time to adjudicating her claim
under a less demanding long-term-disability plan, the insurance company contended that she
that she was not disabled. MetLife v. Glenn, 554 U.S. 105, 115 (2008). The DOL regulation
merely codifies this directive from the Supreme Court to consider the SSA decision. Following
Glenn many Circuit Courts focused on this point, most notably the Ninth Circuit in Montour
v. Hartford Life & Acc.Ins Co., 588 F.3d 623, 635-637 (9th Cir. 2009); Salomaa v. Honda
Long Term Disability Plan, 642 F.3d 666, 679 (9th Cir. 2011). A rule requiring that fiduciaries
who disagree with an SSA decision to distinguish a decision is not one to increase costs.
Therefore, it seems wholly speculative that addressing an SSA decision will impact premiums.

Christina L. Montgomery, Esq., President Elizabeth Mason, Esq., Secretary
Beth R. Myers, Esq., Vice President Patrick D. Banfield, Esq., Treasurer