Submitted electronically via e-ORI@dol.gov

October 27, 2017

Mr. Timothy Hauser

Acting Assistant Secretary of Labor

Employee Benefits Security Administration

Room N-5655

U.S. Department of Labor

200 Constitution Avenue, NW

Washington, D.C. 20210

Re: Claims Procedure for Plans Providing Disability Benefits; Extension of Applicability 

Date (RIN 1210-AB39)

Dear Acting Assistant Secretary Hauser:

America’s Health Insurance Plans (AHIP) greatly appreciates the opportunity to comment on the 

proposed delay of the applicability date of the U.S. Department of Labor (Department) final rule 

(Rule) amending disability claim procedures (81 Fed Reg. 92316 (Dec. 16, 2016)) under the 

Employee Retirement Income Security Act of 1974 (ERISA). AHIP is the national association 

whose members provide coverage for health care and related services, including disability 

income protection coverage. Through these offerings, we improve and protect the health and 

financial security of consumers, families, businesses, communities and the nation. We are 

committed to market-based solutions and public-private partnerships that improve affordability, 

value, access, and well-being for consumers. 

AHIP strongly supports a delay of the applicability date of the Rule. However, the proposed 

90-day delay would neither provide enough time for stakeholders to collect and compile the 

requested impact data nor allow the Department enough time to digest comments and re-examine 

and revise the Rule. We support a longer delay extensive enough to accommodate thorough reexamination and revision of the Rule. 

We also recommend the Department allow more time for insurers and other stakeholders to 

develop and provide the useful data the Department now seeks. Therefore, we request that the 

Department extend the proposed 60-day comment period to 120 days. For example, the impact of 

the Rule’s provisions for deemed exhaustion is difficult to quantify because the impact will 

depend on the behavior of claimants and their attorneys in a new legal environment. Moreover,

we request that the Department determine the appropriate amount of time for insurers to come 

into compliance when the details of the Rule are finalized, and the extent of any required 

changes are known.
October 27, 2017

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As noted in previous correspondence, AHIP has serious concerns regarding the Rule. While 

intended to improve the claim review process and consumer experience for private disability 

income insurance claimants, if allowed to take effect as currently written, the Rule would instead 

drive up the cost of private disability income protection without providing any real benefit to 

working Americans. This would impose counterproductive, unnecessary, and increased costs and 

reduce consumer access to disability income protection. 

We urge the Department to complete a careful review and provide the needed regulatory relief to 

avoid the unnecessary disruption and expense that the Rule would have as currently written. If 

implemented “as is,” the Rule would have serious harmful effects, including:

1. Increased Litigation, Underdeveloped Administrative Records, Unnecessary 

Additional Legal Costs, and Increased Burdens Upon the Federal Courts. Of major 

concern, the Rule’s provisions would greatly increase disability income claim litigation 

and litigation costs. The Rule provides, at the claimant’s option, for a short-cut to the 

federal courts and to de novo court review if a plan does not “strictly adhere” to its 

provisions. For many years, federal courts have employed a “substantial compliance” 

standard which, appropriately, allows room for inconsequential and non-material errors 

within the efficient administrative process envisioned under ERISA. Unfortunately, the 

effect of the Rule as promulgated would be to give claimants and claimants’ attorneys 

inappropriate incentives to allege failure of strict adherence even when no such failure 

occurs or when lack of strict adherence is trivial. As a result, federal court dockets would 

become even more burdened than they already are. Claimants who short-cut the 

administrative process will bring to court less developed and incomplete administrative 

records. This will leave federal courts with the option either to act as a substitute claim 

examiner who further develops the record – an expensive and lengthy process - or to 

remand the matter back to the claim administrator from which it came. Inevitably, this 

will lead to a great deal more unnecessary litigation and at very significant additional 

cost. The amount of cost, burden, and disruption would depend upon the extent of 

claimant and attorney recourse to deemed exhaustion. We fail to see how the deemed 

exhaustion provisions of the Rule would enhance the fullness and fairness of claim 

decisions. We see clearly, however, that they would significantly prolong the claim 

adjudication process.

2. Greater Financial Risk to Families and Costs to Government. Because demand by 

employees for private disability income protection is sensitive to the cost of coverage, the 

Rule would drive down the number of working Americans with private disability income 

protection, exposing more American families to the financial risk of disabling illness or 

injury. As a result, not only would more families face financial hardship, the federal 
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government, states, and taxpayers would also face higher costs because, lacking disability 

income protection benefits, more disabled workers would be forced to rely on public 

assistance programs.

3. Delayed Dispute Resolution. In addition, the Rule’s new requirement mandating a 

claimants’ right to review and respond to new information before a final claim decision 

raises serious concerns. These requirements would often result in protracted exchanges 

between the plan and the claimant and would impose delays and additional costs. Under 

current regulations, claimants already have the right to submit, and adjudicators are 

required to consider, whatever comments, arguments, and information claimants wish to 

submit during both the initial claim stage and on appeal. Furthermore, many plans also 

provide for an additional second opportunity to appeal a claim denial, which allows a 

claimant, again, to submit whatever information, arguments, and comments they desire to 

submit. If the Rule is implemented in its current form, these claimant-friendly voluntary 

appeals may be eliminated as plans make adjustments to offset the additional delay and 

cost of the Rule. 

Given the extent of problems with the Rule and its significant costs that far outweigh any 

potential benefit, we support the delay of its applicability to allow the Department to engage in a 

more thorough process of issuing an improved proposed rule. We will also be providing more 

detail on our concerns and respond to the Department’s questions in a separate comment letter as 

part of the request for substantive comments and data.

AHIP and our disability income plan members welcome the opportunity to work with the 

Department to help inform the re-examination of the Rule. To allow adequate time for data 

collection, a thorough re-examination, revision, public comment, and implementation, we urge 

the Department to delay applicability of the Rule for a length of time that will fully 

accommodate each of these crucial steps.

Sincerely,

Matthew Eyles

Senior Executive Vice President and Chief Operating Officer