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December 7, 2017 

Via E-Mail: e-ORI@DOL.gov 

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 

RINNo.: 1210-AB39 

Regulation: 29 C.F.R. §2560.503 

Dear Deputy Assistant Secretary Hauser: 

I am writing to comment on the 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 writing to address what I understand to 

be the principal objections to the regulations and to oppose any efforts to amend or derail 

the regulations. 

First, the claim that the regulations would significantly increase costs is unproven. 

We have yet to see any actuarial study that would support such a claim; and we sincerely 

doubt that any such study could be produced. But even if the costs may modestly 

increase, the specter that fewer employers would offer benefits is sheer nonsense. 

Employers provide benefits to their employers for reasons that go well beyond altruism. 

Employee benefits are a valuable tool employers use to both recruit and retain 

outstanding employees. 

Second, given the nature of litigation of disability benefit claims, a more robust and 

fairer claim process may be the only means a claimant has to achieve due process. The 
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December 7, 2017 

Page 2 

federal courts treat ERISA claims as quasi-administrative. See Perlman v. Swiss Bank 

Corp., 195 F.3d 975 (7th Cir. 1999)). That means there is no trial (and obviously no jury 

trial), no discovery permitted, and no further evidence allowed. The most critical of the 

proposed regulations is the one that gives the claimant the last word in the claim process. 

Without a regulation permitting claimants the opportunity to comment on adverse 

evidence obtained by the benefit plan administrator/insurer during the claim process, 

claimants can be sandbagged since meaningful challenges to such adverse evidence are 

precluded. 

Third, the importance of a Social Security determination cannot be overstated. As 

part of their settlements of regulatory charges resulting from market conduct 

investigations, both Unum and CIGNA agreed to give deference to favorable Social 

Security determinations. Every disability insurer and plan administrator should be 

subjected to the same standard. The definition of “disabled” under the Social Security Act 

(42 U.SC. § 423) is far more stringent than the definitions in disability insurance policies; 

and a favorable outcome of a Social Security claim represents an objective process by a 

neutral administrative agency. The Social Security Medical-Vocational Rules that take 

into consideration a claimant’s age, education, and work experience have been 

recognized as “well-developed, relatively efficient and by no means overly generous to 

claimants-by which a plan may show adequate consideration of a claimant's vocational 

characteristics.” Demirovic v. Bldg. Serv. 32 B-J Pension Fund, 467 F.3d 208, 216 (2d 

Cir. 2006). Hence, requiring disability plans to meaningfully explain a differing outcome 

from the Social Security determination would enhance the claim process and its fairness. 

Fourth, the regulations promote the use of impartial consultants. Especially in view 

of a litigation regime that effectively precludes discovery, the rule promotes the use of 

practitioners who bring more objectivity and fairness into the evaluation of claims instead 

of using doctors and other consultants who appear to earn the bulk, if not all of their 
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December 7, 2017 

Page 3 

income, reviewing disability claims and thus are influenced by the notion of regulatory 

capture into being biased to favor benefit denials. 

Fifth, the requirement of disclosure of the time limit for filing suits is simply a tool 

to prevent confusion and unnecessary premature adjudication of claims. Likewise, the 

disclosure of internal guidelines utilized by plans insures consistent treatment of similarly 

situated claimants. 

In summary, the regulations have already gone through an extended comment 

period and the comments presented were all taken into consideration before the final 

rules were issued in December 2016. There is no reason whatsoever to delay the 

implementation of the rules, especially since insurers and benefit plan administrators 

have already been given more than adequate time to institute procedures and measures to 

comply with the rules. 

/s J. David Oswalt