STEPHEN R. BRUCE LAW OFFICES

1667 K ST., NW, SUITE 410

WASHINGTON, D.C. 20006

202-289-1117

FAX: 202-289-1583

stephen.bruce@prodigy.net

October 25, 2017

Submitted via: e-ORI@dol.gov

Timothy D. Hauser

Deputy Assistant Secretary

Employee Benefits Administration

Department of Labor

200 Constitution Avenue NW

Washington D.C. 20210

Re: Proposed Rule to Extend Applicability Date for Final Regulations on Claims

Procedures for Plans Providing Disability Benefits (RIN 1210-AB39)

Dear Deputy Assistant Secretary Hauser:

I am an attorney who represents claimants in ERISA cases. I submitted detailed

comments on the proposed disability claims regulations on January 19, 2016.

I am respectfully requesting that the Secretary of Labor not delay the effective date

of the final disability claims regulations at 29 C.F.R. 2560.503-1, which the Secretary

made final on December 19, 2016 and which are scheduled to become applicable on

January 1, 2018. These regulations were adopted after extraordinarily extensive notice

and comment: Over 145 public comments were submitted and considered by DOL over a

nearly one-year period. Even when the regulations were made final at the end of 2016, all

interested parties were given another full year before the changes take effect on January 1,

2018. This provided ample opportunity for everyone affected to implement procedures to

comply with the new regulations.

As you know, many of the changes in the final regulations parallel changes already

made by health insurers under the ACA in 2010, which the insurance industry is not only

conversant with but already equipped to implement. As the DOL outlines in the preamble

to this proposed regulation, these changes were carefully-considered improvements to the

regulations in effect since 2000 on such matters as disclosure requirements, rules related

to claim files and internal protocols, conflict of interest rules, and linguistic standards for

communicating with non-English speaking claimants. All of these changes were to

address practices that had been met with rebukes, including from the judiciary and DOL’s

ERISA Advisory Council, during the 15 years since the DOL last issued disability claims
Comments on Proposed Delay October 25, 2017

of Disability Claims Procedures - 2 -

regulations. Importantly, none of these requirements, or the carefully-weighed changes to

them, involve substantial costs.

As described in the December 19, 2016 preamble to the final regulations, the

purpose of these rules is to improve the claims process so disabled participants and their

beneficiaries can obtain speedy and just determinations of their eligibility and not have to

wait for essential income to replace earnings their disabilities have caused them to lose.

As DOL’s EBSA knows too well, the claims processes for disability claims occur on

uneven playing fields because disabled claimants are not repeat players (and many are not

even represented by experienced attorneys), while the insurance companies and their

supporting attorneys, experts, and trade associations are not only experienced but have

billions of dollars in resources to back them. The need for these regulations, and the level

of discontent with the status quo, is shown by judicial filing statistics showing that over

65 percent of current ERISA filings are individual and class action complaints about

disability benefit denials.

Everyone has heard by now that the proposed delay in these final regulations is at

the direction of the White House, and not on the merits. Published reports show that this

is one of the rules the White House and OIRA have targeted as part of its deregulation

efforts. The insurance companies and related associations and law firms who asked the

White House and the new Secretary to delay the final regulations all had the same

opportunity as I and close to one-hundred and fifty others had to publicly comment on the

proposed regulations between November 2015 and January 2016--and almost all of these

insurers and related parties did so. These insurers and related parties already had the

opportunity to supply data related to costs and other burdens from the proposed

regulations. There are no indications that the costs data that the industry is producing to

justify this delay could not have been produced in January 2016 or that it is any more

informative or reliable than what was submitted previously. The delay in the regulations

and reopening of the regulations will serve only one purpose: giving the insurance

companies and related parties another opportunity to lobby DOL through the White

House and members of Congress to remove or weaken the improvements in the

regulations.

Indeed, the focus of the reopened, second comment period only on costs and on

weakening the regulations would appear to violate the requirements of the Administrative

Procedure Act (APA) of 1946 (5 U.S.C. §551 et seq.) by not considering benefits or

strengthening the regulations. To grant the insurance companies an extension close to two

years after public comments closed also has the appearance of favoritism to only certain

members of the public, without weighing the harm visited upon disabled participants and

their beneficiaries.
Comments on Proposed Delay October 25, 2017

of Disability Claims Procedures - 3 -

The limited information that the Secretary’s office has made available about the

insurance industry’s new comments also shows a lack of transparency about the real

reasons for this delay, with no records being kept of meetings with the Secretary, OIRA,

and the White House. Of particular concern is that the proposed regulations appear to

predicate the delay and reopening of the record for a second round of comments on a

“confidential” study based on a “survey” of unidentified officers of insurance “carriers”

predicting a “5-8%” increase in premiums from application of the final regulations. Not

only is the prediction of a such an increase in premiums from these carefully-calibrated

changes to the existing regulations preposterous, but no efforts have been made to use

modern survey techniques or to measure the benefits from the regulations in terms of

fewer unjust or delayed denials of income to individuals and families who suffer from

poor health and dire financial circumstances. I understand that FOIA requests have been

made for the industry group's “confidential” survey and other non-public comments but

that no documents have been produced to date. All this suggests violations of the APA

and FOIA that will be added to the individual and class action litigation that denied

disability claimants have already been bringing in the federal courts.

In sum, the only product of the proposed delay will be to compromise carefullyconsidered final regulations, which were already largely in place for health plans under

the ACA, and to harm disabled participants and their families.

I appreciate the opportunity to present comments about the proposal to delay

application of the final disability claims rules. If you have any questions or want me to do

anything more, please contact me at 202-289-1117. Thank you.

Sincerely,

Stephen R. Bruce