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Andrew M. Kantor

akantor@kantorlaw.net

December 11, 2017

Via E-Mail: e-ORI@DOL.gov and U.S. 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: Re-Examination of Claims Procedure Regulations for Disability Plans

RIN No.: 1210-AB39

Regulation: 29 C.F.R. §2560.503

Dear Deputy Assistant Secretary Hauser:

I am writing to request that the Department does not modify or further delay 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 have represented long-term disability (LTD) claimants for the nearly three years I have 

been practicing law. I am proud to say that I have helped dozens of LTD claimants receive 

disability benefits – both through the administrative claim process and, when necessary, 

litigation. My clients are individuals who have suffered from both serious illness or injury and 

the loss of work income. Timely receipt of LTD benefits is often the only thing that stands 

between my clients and losing their homes because they are unable to pay the mortgage or other 

financial catastrophes. Indeed, I have had clients who have died while their administrative claims 

were pending.

LTD claimants often have difficulty obtaining representation in the administrative claim 

process and lack the resources necessary to gather the evidence necessary to contest a claim 

denial. The Department needs to make sure the Secretary’s claim review regulation protects the 

interests of disabled workers.

While I appreciate the opportunity to comment on the Department’s re-examination of 

the costs of the final rules governing disability claims, the concerns raised by the industry are not 

new. Rather, these objections appear to be simply re-argument of the merits of the final rules. 

Where those rules are based on policy choices that have been made by Congress, by this 

Department, and by the federal courts interpreting ERISA, another argument about the merits is 

unnecessary.
EBSA

December 11, 2017

Page 2

Nevertheless, I will address the insurance industry’s primary objection.

Costs Will Not Increase

The industry claims if the final rules go into effect there will be an increase in costs that 

will increase LTD premiums resulting in fewer employees being covered by group LTD plans. 

This assertion is patently untrue.

This cost argument was made in various industry comments to the proposed rules before 

final adoption. The Department concluded that costs would not outweigh the benefits. The 

current cry of increasing costs is an argument that has already been considered and rejected. An 

agency is not required to “conduct a formal cost-benefit analysis in which each advantage and 

disadvantage is assigned a monetary value.” Michigan v. Environmental Protection Agency, 135 

S. Ct. 1699, 2711 (2015).

Nonetheless, the Department has asked for data addressing whether costs increased in 

response to the last set of rules applying to ERISA disability plans that became effective in 2002. 

In fact, the Department can rely upon information supplied by its own Bureau of Labor 

Statistics.1 The data shows that access and participation in employer-based disability insurance 

has increased, not decreased, between 1999 and 2014. This increase occurred despite that 

employment in the service industry has increased, an industry in which employees are the least 

likely to have access to employer-based disability coverage. This increase also occurred despite 

the 2000 disability claims regulations and a series of court decisions addressing conflicted 

decision-making, deemed exhaustion, the need to discuss and explain adverse benefits decisions, 

and a participant’s right to respond to new evidence. The Department should, therefore, be 

suspicious of any data supplied by the industry now that suggests employers would abandon 

disability coverage due to the costs of codifying these principles. The Bureau of Labor Statistics 

study also demonstrates that the cost of disability insurance is extremely modest. Thus, even if 

costs did increase, the increase would be so small that it is unlikely to make any difference in 

coverage.

The Department has also asked for data about whether disability premiums increased in 

response to the adoption of statutory bans on discretionary language clauses in disability policies 

by some states. Notably, during the time period of the BLS study, many states enacted 

discretionary clause bans. This includes but is not limited to: Arkansas Admin. Code 054.00.101-

4 (2013); Cal. Ins. Code §10110.6 (2012); Colo. Rev. Stat. §16-3-1116 (2008); 50 III. Admin. 

Codes 2001.3 (2005); Md. Code ann. Ins. §12-211; Mich. Admin. Codes. R. 500.2201-2202 

(2007); R.I. Gen. Law §§ 27-18-79; Tex. Admin. Code §3.1202-1203; Tex. Ins. Code 

§1701.062, §1701.002 (2011); WAC §284-96-012 (2009). Notwithstanding these statutory 

developments, access and participation in disability plans increased according to the BLS data.

 

1 https://www.bls.gov/opub/btn/volume-4/disabilitv-insurance-plans.htm.
EBSA

December 11, 2017

Page 2

Also, during the period covered by the BLS document, two major insurers with 

significant market share, UNUM and CIGNA, were examined by the state insurance regulators 

for poor claims handling practices. UNUM and CIGNA had to pay fines and consented to 

Regulatory Settlement Agreements that raised the standards for their LTD claims 

administration.2 Nonetheless, during this period LTD participation increased.

Given the above, there is no factual basis to support the industry’s claim that modest 

changes to the Secretary’s claim review regulation would result in cost increases or

Very truly yours,

Andrew M. Kantor, Esq

 

2

http://www.maine.gov/pfr/insurance/publications reports/exam rpts/2004/unum multistate/unum multis

tate.html;

http://www.maine.gov/pfr/insurance/publications reports/exam rpts/2009/pdf/cigna mcreport 2009.pdf; 

https://www.insurance.ca.gov/0400-news/0100-press releases/2013/release044-13.cfm.