By 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: Claims Procedure Regulations for Plans Providing Disability Benefits

Examination

RIN No.: 1210-AB39

Regulation: 29 C.F.R. §2560.503-1

Dear Secretary Acosta,

For eight years I represented claimants in ERISA benefit matters both in the internal

appeals process and in litigation. The vast majority of my clients were seeking to reverse

denials of disability claims. For the last 6 years I have worked as a consultant to other

ERISA benefits attorneys. In that capacity I read hundreds of ERISA decisions and

court filings each year and am keenly aware of the issues surrounding the adjudication of 

ERISA disability benefits and the requirements of full and fair review. 

The Department’s proposed delay of the final regulations raises serious issues regarding 

the transparency of the rule making process. The Department finalized rules after an 

extensive notice and comment period that provided 60 days and yielded numerous 

comments from various stakeholders. The Department considered the comments for 

nearly a year. Insurers and plans, and the organizations that represent them, took the 

opportunity to comment. Many of industry comments suggested that there were costs

associated with implementing the rules but these comments were highly speculative. 

Those comments were not ignored. When the industry asked for more time to implement 

the changes, that request was honored and the effective date of the final regulations was 

delayed. 

Now we are told that other input is being relied upon - information that could have been 

contributed during the proper notice and comment period but somehow was not. The 

ERISA participants and their representatives have no way to respond to this input, since it 

is not being made available. The public is not being told why this information is more 

valuable than what was collected during the notice and comment period. It is clear that 

there were meetings with industry representatives and that the industry and certain 

members of Congress sent letters, but the content of these meetings and letters are not 

entirely disclosed. The industry apparently referenced a “confidential” study that predicts 

an increase in premiums. It is also troubling that the very short 15-day notice and 

comment period to respond to the proposed delay does not even provide time for an 

individual to make a FOIA request to uncover what is influencing this process. 
To make matters worse, the industry study that the Department is now proposing seems 

to allow for this process to recede even further into the shadows. The industry will 

collect data in a way that will be hidden from the public, and based on this, the 

Department proposes to make a new decision on how to protect participants’ rights to a 

reasonable process in the adjudication of the disability benefits. How such an endeavor

can be fair defies explanation. Indeed, it seems designed to permit an unscientific 

massaging of facts to favor one set of interests over another. There is no way that 

participants can effectively comment or provide their own “study,” since they are not in 

possession of the data and could not muster the resources to process it, even if they were. 

I do not assume that the industry is correct in estimating that premiums for group 

disability benefits would increase by 5-8%. (While it may be predictable that premiums 

would rise in Vermont in response to a mental health parity statute, it is less clear that 

enhanced process-based rules would have a fraction of that effect.) But to the extent that 

premiums would have to be increased to avoid illusory coverage, ERISA participants 

would welcome this. And marginally higher premiums would present no additional 

burden to public programs, since employee benefits that are impossible to obtain create 

the identical burden to no employee benefits at all. To put it more plainly, if the 

difference in premiums is the difference between paying something for nothing and 

paying something for something, the industry argument rings hollow. To the extent the 

Department thinks a delay is needed to prevent such an increase, this needs to be 

reconsidered, as the costs will not outweigh the benefits even in the worse case scenario. 

I ask that the effective date of the regulations not be delayed, since the reason for doing 

so lacks the necessary transparency required by the Administrative Procedures Act and 

undermines the sense of trust and fairness that should inhere in this rule-making process. 

Thank you considering my comments,

Sally Mermelstein

Attorney at Law