December 11, 2017

Submitted via: e-ORI@dol.gov

Office of Regulations and Interpretations

Employee Benefits Security Administration

Room N-5655

U.S. Department of Labor

200 Constitution Avenue NW

Washington, DC 20210

Re: Claims Procedure for Plans Providing Disability Benefits 

Re-Examination [RIN 1210-AB39]

Ladies and Gentlemen:

AARP1 appreciates the opportunity to comment on the Department of 

Labor’s (the Department or DOL) proposed regulation re-examining the final 

claims procedure for plans providing disability benefits. On behalf of our millions 

of members, we have a strong interest in ensuring that participants and 

beneficiaries receive the benefits to which they are entitled. In order to do so, 

participants must be able to successfully access and resolve benefits disputes 

through ERISA’s claims procedures.2 Without meaningful access, participants 

 

1 AARP is the nation’s largest nonprofit, nonpartisan organization dedicated to 

empowering Americans 50 and older to choose how they live as they age. With nearly 

38 million members and offices in every state, the District of Columbia, Puerto Rico, and 

the U.S. Virgin Islands, AARP works to strengthen communities and advocate for what 

matters most to families with a focus on health security, financial stability and personal 

fulfillment.

2 Ensuring that participants have full and fair review in accordance with Section 503 of 

ERISA is crucial as EBSA does not have the resources to protect disability plan 

participants from improper denials of claims. Cf. U.S. Dep’t of Labor, OIG, EBSA Did 

Not Have The Ability To Protect The. Estimated 79 Million Participants In Self-Insured 

Health Plans From Improper Claims Denials (Rpt. No. 05-17-001-12-121, Nov.18, 2016) 

(similar to health plans, we assume that EBSA lacks primary knowledge of denials of 

employer-sponsored disability claims).
AARP Comments on 

 Claims Procedure for Disability Plans Re-Examination 

December 11, 2017

Page 2 of 8

cannot adequately protect their claims to benefits, which may spell the difference 

between independence and impoverishment in their old age.3

For the reasons below, AARP submits that the Final Regulation on Claims 

Procedure for Plans Providing Disability Benefits, 81 Fed. Reg. 92316 (Dec. 19, 

2016), should not be modified. Moreover, the Department should not grant any 

additional delay of the final disability claim process regulation’s applicability date.

The Right To Review And Respond To New Information Before A Final 

Decision Does Not Significantly Increase Costs Or Burdens.

The final regulation confirms that the participant has the right to review and 

respond to new information before the plan makes its final decision. This 

requirement is a fundamental due process right without which no claimant can 

receive a full and fair review within the meaning of Section 503 of ERISA. 

Industry stakeholders complain that this requirement will lead to a 

protracted claims process that will result in unnecessary costs for plans. But 

these stakeholders know that, in a benefits denial claim with a deferential 

standard of review, courts generally do not allow participants to present evidence 

to the court that was not presented to the administrator; the administrative record 

generally is considered closed.4 Under the industry’s view, a claimant has no 

right to respond to new information. This cannot meet Section 503’s requirement 

of a full and fair review of a benefits claim denial. 

Moreover, if a court finds that the plan should have permitted the claimant 

to respond to the new information, the court will remand the claim to the plan 

administrator, leading to an even more costly (particularly for the claimant) and 

protracted claims process. To state the obvious, the plan can easily take care of 

 

3 We know that, as workers age, disability rates increase. Persons With A Disability: 

Labor Force Characteristics – 2016, 2 (June 21, 2017), goo.gl/t6X6BW. For example, 

with $832 as the median weekly earning of a fulltime worker, see U. S. Dep’t of Labor, 

Labor Force Statistics from the Current Population Survey: Table 37, Bureau of Labor 

Statistics (last modified Feb. 8, 2017), goo.gl/MK6AgD, and a replacement percentage 

of sixty percent, see America’s Health Ins. Plans (AHIP), An Employer’s Guide to 

Disability Income Insurance 9 (2007), goo.gl/E5mvCy, a disability claimant would 

receive the modest amount of approximately $499 per week.

4 E.g., Mitchell v. Eastman Kodak Co., 113 F.3d 433 (3d Cir. 1997).
AARP Comments on 

 Claims Procedure for Disability Plans Re-Examination 

December 11, 2017

Page 3 of 8

this issue by providing the claimant with all of the reasons for its denial when it 

initially denies the claim. If this is done, there will be no additional cost to either 

party. 

The Requirement Of Deemed Exhaustion Of Claims And Appeal Processes

Does Not Increase Costs Or Burdens.

Another provision of the final claims procedure regulation that the industry 

contends will increase costs and burdens is the deemed exhaustion of claims 

and appeals process. 

Although the decision in Amato v. Bernard, 618 F.2d 559 (9th Cir. 1980), 

recognized that a participant or beneficiary may not bring an action in court for a 

denial of a claim without first exhausting the plan’s internal claims procedure --

including an exhaustion requirement for denied claims5-- the Department of 

Labor and the courts have also established exceptions to this requirement. 

Exceptions include futility,6 a lack of meaningful access to the plan’s review 

procedures,7irreparable harm,8 and other circumstances where requiring 

exhaustion would be unfair to the claimant.9 Courts have permitted plaintiffs to 

proceed directly to court, finding a claim is deemed denied for failure to follow 

 

5 Every circuit court has recognized this exhaustion requirement.

6 E.g., Fallick v. Nationwide Mut. Ins. Co., 162 F.3d 410,418, 421 & n.4 (6th Cir. 1998) 

(collecting cases) (holding because insurer has proven itself unwilling to alter its 

methodology for determining reasonable and customary limitations, exhaustion is futile).

7 E.g., Brown v. J.B. Hunt Transp. Servs., 586 F.3d 1079, 1085-86 (8th Cir. 2009) 

(holding that failure to respond to request for documents excused claims from 

exhaustion requirement because there was no full and fair review). 

8 E.g., Turner v. Fallon Community Health Plan, 127 F.3d 196 (1st Cir. 1997) (failure to 

exhaust is forgiven for an imminent threat to life or health). 

9 E.g., Hall v. National Gypsum Co., 105 F.3d 225, 231-32 (5th Cir. 1997) (various 

factors including ever-changing story of why benefits could not be paid and plan’s failure 

to follow the appropriate procedures).
AARP Comments on 

 Claims Procedure for Disability Plans Re-Examination 

December 11, 2017

Page 4 of 8

applicable time limits10 or where other regulatory requirements have not been 

met.11

The Department’s position is consistent with the courts’ holdings12 as well 

as its stated position in amicus briefs.13 The final regulation simply codifies these 

positions. The final regulation provides participants, plans and insurers with an 

explanation of the prerequisites that are necessary in order for a court to find that 

the insurer has complied with the claims regulation and has provided a full and 

fair review to the participant’s denied claim. The regulation provides national 

uniformity that insurers and plans crave.

Under the guise of allegations of increased cost and administrative burden, 

industry stakeholders are really asking the Department to reverse its position and 

reject established jurisprudence. Contrary to the allegations of industry 

stakeholders, Plaintiff’s counsel have no incentive to rush into court if the plan 

has provided full and fair review. Moreover, inasmuch as most plaintiff’s counsel 

tend to litigate in the same court, the judges will determine pretty quickly if 

counsel is abusing the regulation and can order sanctions under Rule 11, which 

can include monetary sanctions.

The Final Regulation Clarifies Provisions of The 2000 Regulation That

Should Lead To More National Uniformity In The Claims Process And Less 

Litigation.

The final regulation clarifies the 2000 claims regulation in at least three 

ways. First, ensuring that the claims decision-makers are independent and 

impartial should lead to less litigation over conflicts of interest and, relatedly, 

 

10 LaAsmar v. Phelps Dodge Corp. Life, 605 F.3d 789 (10th Cir. 2010); Nichols v. 

Prudential Ins. Co. of Am., 406 F.3d 98 (2d Cir. 2005); Jebian v. Hewlett-Packard Co. 

Emple. Benefits Org. Income Prot. Plan, 349 F.3d 1098 (9th Cir. 2003); Dunnigan v. 

Metropolitan Life Ins. Co., 277 F.3d 223, 231 n.5 (2d Cir. 2002).

11 E.g., Halo v. Yale Health Plan, 819 F.3d 42 (2d Cir. 2016) (holding substantial 

compliance is inconsistent with the 2000 DOL claims regulation).

12 See nn. 5-10, supra. 

13 Brief Amicus Curiae of Acting Secretary of Labor in Halo v. Yale Health Plan, 

goo.gl/uPJ4vj.
AARP Comments on 

 Claims Procedure for Disability Plans Re-Examination 

December 11, 2017

Page 5 of 8

discovery; this should lower litigation costs.14 Second, clarifying that the plan 

must distinguish its claims denial from a Social Security grant of a disability 

benefit if the participant has provided such information to the plan not only makes 

sense for a full and fair review, but is consistent with court jurisprudence.15

Finally, the 2000 regulation required that the plan provide the claimant a notice 

that the entire claims file, internal guidelines and other protocols were available 

upon request where a benefits denial was appealed.16 The final regulation now 

requires such a notice upon the initial claims denial. This may reduce 

administrative burdens because claimants may not appeal the denial if they 

better understand the plan’s position and rationale. 

The Requirement To Provide Culturally and Linguistically Appropriate 

Notices Does Not Increase Costs Or Burdens.

“The final rule requires plan fiduciaries to provide disability benefit 

claimants with the requisite level and amount of assistance necessary to assist 

the claimants in understanding their rights and obligations so that they can 

effectively file claims and appeals in pursuing a claim for disability benefits.” 81 

Fed. Reg. at 92329. 

Employers are more likely to offer group disability insurance to those 

individuals working in management, professional and related occupations and, to 

a lesser extent, to those individuals working in sales and office occupations.

Priyanka Anand & David Wittenburg, An analysis of private long-term disability 

insurance access, cost, and trends, MONTHLY LABOR REVIEW 6 (U.S. Bureau of 

Labor Statistics, Mar. 2017), goo.gl/4m2wF8. Employers are less likely to offer 

group disability insurance to workers in service, natural resources, construction 

and maintenance, and production, transportation and material moving. Id. 

 

14 E.g., Melech v. Life Ins. Co. of N. Am., 857 F. Supp. 2d 1281, 1284-85 (S.D. Ala. 

2012) (ordering production of information used to evaluate claims handlers).

15 E.g., Harrison v. Wells Fargo Bank, N.A., 773 F.3d 15 (4th Cir. 2014) (chastising 

administrator cannot decline to undertake nominal efforts to obtain readily available 

information); Melech v. Life Ins. Co. of N. Am., 739 F.3d 663, 674-75 (11th Cir. 2014) 

(finding inappropriate for the plan administrator to ignore Social Security record where 

plan required claimant to apply for Social Security benefits).

16 E.g., Glista v. UNUM Life Ins. Co. of Am., 378 F.3d 113 (1st 2004) (internal guidelines 

and training materials are relevant in reviewing plan’s denial).
AARP Comments on 

 Claims Procedure for Disability Plans Re-Examination 

December 11, 2017

Page 6 of 8

Foreign-born workers are more likely than native-born workers to be 

employed in service occupations, production, transportation, and material moving 

occupations and in natural resources, construction and maintenance 

occupations. Economic News Release, Foreign-born Workers: Labor Force 

Characteristics Summary (U.S. Bureau of Labor Statistics, May 18, 2017),

goo.gl/LxJgkp. Foreign-born workers are less likely than native-born workers to 

be employed in management, professional and related occupations. Id. 

While these statistics are not a perfect equivalent to the American 

Community Survey data, it is clear that there will be a small percentage who 

speak a language other than English as their first language, and who will have 

group disability insurance coverage. Thus, the additional cost, if any, to 

employers, plans, insurers and other stakeholders to provide culturally and 

linguistically appropriate notices should be minimal. 

Any Information Provided To The Department To Support Allegations Of 

Significant Increased Costs Due To The Requirements Of The Final 

Regulation Must Consist Of More Than Conjecture Or Opinion. 

AARP appreciates the Department’s pledge to provide adequate time for 

review of any information provided to the Department to support industry 

stakeholder’s allegations of significant increased costs due to the final 

regulation’s requirements. According to the confidential survey that the 

Department has admitted that it does not have in its possession,17 industry 

stakeholders claim that the final disability regulation will raise premium costs 5 to 

8%.18 

 

17 Oct. 31, 2017, email from Jeffrey Turner to David Certner (on file with AARP).

18 An agency commits serious procedural error when it fails to reveal portions of the 

technical basis for a proposed rule in time to allow for meaningful commentary. See 

Owner-Operator Indep. Drivers Ass'n v. Fed. Motor Carrier Safety Admin., 494 F.3d 

188, 199 (D.C. Cir. 2007); Chamber of Commerce v. SEC, 443 F.3d at 899; Solite Corp. 

v. EPA, 952 F.2d at 484; see also Air Transp. Ass'n of Am. v. FAA, 169 F.3d 1, 7 (D.C. 

Cir. 1999) ("'[T]he most critical factual material that is used to support the agency's 

position on review must have been made public in the proceeding and exposed to 

refutation.'"].The Department still has not explained why this particular “confidential” 

survey is trustworthy or reliable.
AARP Comments on 

 Claims Procedure for Disability Plans Re-Examination 

December 11, 2017

Page 7 of 8

The Department should be cautious when evaluating the credibility of the 

data provided by the insurance industry. Researchers look at various criteria to 

determine the validity of a survey. Such criteria include the following: 

 whether a credentialed, reputable, independent company that generally 

administers such surveys performed the survey;

 whether the survey is representative (e.g., sample size, by types of 

disability claims, geography);

 whether the questions are validly constructed (e.g., no leading questions, 

clear, unbiased). Predictive questions should be followed up with a 

question asking for the underlying rationale for the response;

 whether the methodology is transparent such as explaining assumption 

and not cherry picking data points; 

 what is the response rate (e.g., number of insurers who were asked for 

data vs. number who provided data) as well as any differences between 

those who responded and those who did not (e.g., were the respondents 

primarily insurers who specialize in covering certain types of industries);

and

 if there are other reputable data sources that provide similar data, then the 

survey findings should be compared to those other data sources in order to 

see how much they differ.

Finally, AARP detailed in our October 26, 2017, letter on the proposed 

delay our experience with industry stakeholders’ surveys on changes to disability 

claims processes and potential increased costs. See copy of October 26, 2017, 

letter attached. Accordingly, we are skeptical of the industry stakeholders’ 

estimates of increased costs. 

The Department Should Not Grant Any Additional Delay Of The Final 

Regulation’s Applicability Date.

The regulation delaying the applicability date of the final disability 

regulation clearly stated that the Department was not inclined to provide 

additional time to industry stakeholders to submit the information concerning 

significant cost increases. We note that although the delay was proposed in the 
AARP Comments on 

 Claims Procedure for Disability Plans Re-Examination 

December 11, 2017

Page 8 of 8

Federal Register on October 12, 2017, industry stakeholders knew that they 

would have an opportunity to provide additional information in August 2017, if not 

earlier.19 The Department should not provide any additional delay. 

Conclusion

AARP appreciates this opportunity to state that it opposes any modifications 

of the final disability claims regulation. If you have any questions, please feel free 

to contact Michele Varnhagen of our Government Affairs office at 202-434-3829. 

Sincerely,

David Certner

Legislative Counsel and

Legislative Policy Director

Government Affairs

 

19 See Aug. 3, 2017 e-mail from Howard Bard at ACLI to Joe Canary & Jeffrey Turner, 

EBSA (“confirming that ACLI would be comfortable with the Department’s inclusion of 

language in a rulemaking proposal stating that stakeholders have committed to work 

with EBSA to obtain data); see also Other Letters on File with EBSA, goo.gl/uT5H5T

(indicating discussions with the Department over necessary information began as early 

as March 2017).