F

N FRANKEL & NEWFIELD, P.C.

ATTORNEYS AT LAW

Justin C. Frankel*
Jason A. Newfield*

*Admitted in NY, CT and PA

December 6, 2017

585 Stewart Avenue
Suite 312
Garden City, NY 11530

Tel: (516) 222-1600
Fax: (516) 222-0513

www.frankelnewfield.com

VIA CERTFIED 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 Deputy Assistant Secretary. Hauser,

As attorneys representing claimants with disabilities, and further to our firm’s prior
submission, we write on behalf of ERISA disability claim beneficiaries, to share our
concerns about the Department’s proposed delay in iraplementation of regulations.

The Department’s proposed delay of the final regulations raises serious issues regarding
transparency in the rule-making process. It should not be understated that the Department
finalized rules after an extensive notice and comment period which provided 60 days and
yielded comments from various stakeholders. Insurers and plans, and the organizations
that represent them, came out, as expected, in force. Many industry comments urged that
there were cost issues associated with implementing the rules. Those comments were
highly speculative and rarely were supported by any relevant data. As well, many industry
comments asked for more time to adjust to the new rules, a request that the Department
honored by significantly delaying the effective date.

Now we are told that other input is being relied upon at this late date - information that
could have been contributed during the proper notice and comment period but somehow
was:not. Ironic to the circumstances faced by ERISA claimants that our firm interacts with
on a daily basis; and the unfair process which they are subjected to. (and for which the
proposed final regulations will help such claimants), the ERISA participants and their
representatives have-no way to respond to this input, since it is not being made available.


FN FRANKEL & NEWFIELD, PC.

The public is not being told why this post notice and comment information is more valuable
than what was submitted, collected and received during the notice and comment period
itself, It is clear that there were meetings with insurance industry representatives and that
the insurance industry and certain members of Congress sent letters, but the content of
these meetings and letters are not entirely disclosed. The insurance industry apparently
referenced a “confidential” study that unsurprisingly predicts an increase in premiums. It
is likewise curious that the very short 15-day notice and comment period does not even
provide time for an individual to make a FOIA request to uncover what is influencing this
process. Again ironic to the process faced by ERISA claimants, it appears the deck is
stacked, and once again, in favor of the insurance industry.

Moreover, the industry study that the Department is now proposing seems to allow for this
process to recede even further into the shadows. ‘he industry will collect data in a way
that will be hidden from the public, and based upon such “data”, the Department proposes
to alter its decision on protecting participants’ rights, and in providing reasonable
procedures in the adjudication of the disability benefits.

How this can be fair defies explanation, other than one based upon pure cynicism, as it
clearly is at the peril of disabled and vulnerable claimants, to the benefit of well-heeled
insurance companies and Corporate America. Indeed, it seems designed to permit an
entirely 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.

We do not assume that the industry is correct in estimating that premiums for group
disability benefits would increase by 5-8%. But to the extent that premiums would be
increased to avoid illusory coverage, ERISA participants would likely welcome this and it
would present no additional burden to public programs.

If the difference in premiums is the difference between paying something for nothing and
paying something for something, the argument surrounding the increase 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 worst-case
scenario.

We ask that the effective date of the regulations not be delayed, since the reason for doing
so lacks the necessary transparency and undermines the sense of trust and fairness that
should inhere in this rule-making process.


FN FRANKEL & NEWFIELD, P.C.

We also request that more transparency be afforded, such that the public be able to
appreciate the data which may be relied upon in any fashion by the Department in
formulating any determination as to implementation of further regulations. Once again,
given that this impacts ERISA, such materials would be considered “relevant” under the
governing regulations, and should thus be made available,

Thank you considering our comments,

By:

JAN/bms

Very truly yours,

mane & NEWFIELD, PC.
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