From: Susan Horner [mailto:SusanHorner@erisa-law.com] 

Sent: Tuesday, October 24, 2017 8:03 PM

To: EBSA, E-ORI - EBSA

Subject: My Objection to the proposed 90-day delay in the effective date of the Regulations. RIN 1210-

AB39

Dear Mr. Hauser,

I write in intense opposition to the proposed 90-day delay of the coming effective 

date of the DOL's new Disability Regulations. I am a partner of MILLER MONSON 

PESHEL POLACEK & HOSHAW in San Diego, California. I have represented 

employee plan participants and their beneficiaries nearly exclusively for over 25 

years, primarily in welfare benefits issues of disability, life and accident, and, on 

rare occasion, pension. My practice includes all states of ERISA claims issues: at 

the claim level, appeals of adverse ‘administrative’ decisions, litigation in the 

district court and at the court of appeals. I have a medical background from my 

years in the medical field as a cardiac special procedures technologist prior to my 

legal career. That background has been indispensable in parsing through the 

opacity and unhelpful innuendo all too often encountered as the underlying basis 

for adverse decisions issued by insurers ---so much so that it appears to be a 

purposefully practiced communication style intended to bewilder or baffle 

claimants, and perplex their treating providers.

I have personally witnessed the proliferation of claim denials forcing claimants to 

litigate their claims in court, all the while left with no life insurance benefits in the 

loss of their loved one, and/or no disability benefits while still unable to work. I 

have witnessed the non-neutrality, non-objective nature of claims reviews in 

numerous fields —vocational/rehabilitation, medical, behavioral, 

psychologic/psychiatric, etc.— and the claims manager(s) themselves who each 

take an outright adversarial and sometimes hostile approach to the claim, 

particularly by the underwriting/insuring insurance companies. After issuance of 

the then-new regulations in 2000, effective-January 1, 2001, the DOL attempted 

to effectuate a more level playing field for disability claim gamesmanship by 

insurer 'administrators' so as to hopefully ensure greater protection of employee 

participants and beneficiaries. However, the claims administrators quickly 

learned how to manipulate and distort the spirit and meaning of those 

regulations in their self-interest, going to the highest degree in quoting policy 

terms ---sometimes just quoting anything including irrelevant provisions under 

one claim subsection, while simultaneously failing to connect the dots between 

the actual evidence in the record as a whole regarding the claimant's injury or 
illness and actual basis for his or her disability. Refusing to communicate the 

latter in a plain, meaningful manner goes against the very population which 

ERISA’s central underlying purpose of protection is for: employee 

protection. Schikore v. BankAmerica Supplemental SI (MEJ) Retirement Plan, 269 

F.3d 956, 962-63 (9th Cir. 2001), citing 29 U.S.C.S. § 1001(b). 

The economic incentives for insurers to deny valid claims from the start (or 

terminate within a short time), and release all reserves previously held to pay the 

claim into their general operating funds for investment ---achieving high returns 

on that equity--- makes their practice understandable from the standpoint of 

protecting their shareholders, even if after 2 to 5 years later they have to pay out 

the benefits that should have been paid to begin with. It also readily explains the 

explosion of such claims that have increasingly clogged the courts and proliferate 

such innumerable new case opinions that they are quickly becoming impossible to 

keep up with. The courts and the Department of Labor through its study of cases 

in the last 16 years since the 2000 regulations took effect have recognized that 

this poor state of affairs is indeed contrary to the purposes of ERISA, and contrary 

to the most minimal basic requirements of each of the regulations. The DOL's 

decision to take aim at the 2000 regulations affecting plan administration of 

disability claims and focus enhanced attention on the protections for disability 

plan participants and beneficiaries was (and is) long overdue. It should not be 

further delayed.

These claims are typically ‘adjudicated’ by insurance carriers, whose business it is 

and has for well over a century to conduct thorough investigations of relevant and 

readily available information and to articulate and explain their decisions based 

on the evidence as a whole. The changes provided by the new regulations 

reinforce and enhance what the 2000 regulations attempted to accomplish but 

for the concerted efforts of the administrators’ to circumvent. It is far past time to 

correct the commonplace occurrence of tricky, cryptic, opaque decisions that lack 

clarity and specificity, lack helpfulness or real meaning to the lay employee who 

has no expertise in the area but needs to understand the adverse decision in 

order to adequately appeal such decision. Yes, many of the adverse decision 

letters resort to unhelpful conclusory boilerplate —boilerplate which is seen 

parroted in many if not most adverse decisions and could apply to any number of 

conditions. Insurers resort to vague inferences instead of stating in clear 

language what they mean and what is missing (often because they never gave 

notice in advance that something specific was needed, and never requested it to 
begin with). These vague inferences often take on meaning only after litigation 

has commenced and the plan’s attorneys put the unhelpful conclusion (or series 

of conclusions) into the context of the details of the claim and medical or 

vocational information which should have been clearly stated to begin 

with. Transparency and fairness has been supplanted by opacity, mushy 

explanation, abstruseness, non-clarity and even assertions that stand in direct 

contradiction to actual file evidence but note of which precise evidence went 

unmentioned.

Under the statute and under the 2000 regulations, the claim fiduciaries must

provide "full and fair reviews" of claims for benefits. 29 U.S.C. § 1133; 29 C.F.R. § 

2560.503-1(g)(1), (h)(2). The new regulations do not change this 

requirement. These procedural minimums have LONG required that the claim 

administrators set forth the "specific" reason or reasons —however many there 

are— for a denial and the basis of the decision. 29 U.S.C. § 1133; 29 C.F.R. § 

2560.503-1; White v. Jacobs Eng'g Group Long Term Disability Benefit Plan, 896 

F.2d 344, 349-350 (9th Cir. 1990); Saffon v. Wells Fargo & Co. LTD Plan (& 

MetLife), 511 F.3d 1206, 1213-1214 (9th Cir. 2008), citing Booton v. Lockheed 

Med. Benefit Plan, 110 F.3d at 1463-64; Abatie v. Alta Health & Life Ins. Co., 458 

F.3d 955, 974 (9th Cir. Cal. 2006) en banc.1 The new regulations also do not 

change this requirement, nor do they change ERISA’s compulsory provision 

requiring the denial notice be written in language likely to be understood by the 

lay person in order he or she may know how to appeal it and perfect the claim. 29 

U.S.C. § 1133, 29 C.F.R. § 2560.503-1. The economic costs of this requirement 

were previously studied and addressed in the Federal Register at 65 Fed. 

Reg.70246 at 70256, and were recently addressed again. The late objectors had 

the full opportunity to add the costs and concerns not only previously in regard to 

the 2000 regulations, but had sufficient opportunity to again do so during the 

Notice and Comment process to the new regulations before that process closed. 

 1

See also, Wolfe v. J.C. Penney Co., Inc., 710 F.2d 388 (7th Cir. 1983) (same); Jorstad v. 

Connecticut Gen. Life Ins. Co., 844 F. Supp. 46 (D. Mass. 1994) (sparse or conclusory reasons 

insufficient); Grossmuller v. International Union, etc., 715 F.2d 853, 857-858 (3d Cir. 1983); 

VanderKlok v. Provident Life & Accid. Ins. Co., 956 F.2d 610, 616 (6th Cir. 1992); Weaver v. 

Phoenix Home Life Mutual Ins. Co., 990 F.2d 154; (4th Cir. 1993); Makar v. Health Care Corp. of 

Mid-Atlantic (CareFirst), 872 F.2d 80, 83 (4th Cir. 1989) (dicta); Short v. Central States etc., 729 

F.2d 567 at 575 (8th Cir.1984) (rejecting "baldfaced conclusions"); Richardson v. Central States, 

SE & SW Areas Pension Fund, 645 F.2d 660, 665 (8th Cir. 1981)
n.1 See also, Wolfe v. J.C. Penney Co., Inc., 710 F.2d 388 (7th Cir. 

1983) (same); Jorstad v. Connecticut Gen. Life Ins. Co., 844 F. Supp. 46 

(D. Mass. 1994) (sparse or conclusory reasons insufficient); 

Grossmuller v. International Union, etc., 715 F.2d 853, 857-858 (3d 

Cir. 1983); VanderKlok v. Provident Life & Accid. Ins. Co., 956 F.2d 

610, 616 (6th Cir. 1992); Weaver v. Phoenix Home Life Mutual Ins. 

Co., 990 F.2d 154; (4th Cir. 1993); Makar v. Health Care Corp. of MidAtlantic (CareFirst), 872 F.2d 80, 83 (4th Cir. 1989) (dicta); Short v. 

Central States etc., 729 F.2d 567 at 575 (8th Cir.1984) (rejecting 

"baldfaced conclusions"); Richardson v. Central States, SE & SW Areas 

Pension Fund, 645 F.2d 660, 665 (8th Cir. 1981)

Under §(g)(3) (2002), (formerly §(f)(3)), the administrator must also provide a 

description of the specific information the administrator would need for the 

claimant to perfect his or her claim and explain why it needs the specific 

information. Unfortunately, it is a fact that insurers have NOT followed this, 

instead, at best, usually offering a generic and confusing laundry list of types of 

general medical information to submit — but which has either already been 

submitted, or is a list of various types of "diagnostic studies" that exist in the 

general medical world, but without identifying which are actually directly relevant 

to the claimant, and explaining why. Other numerous generically-requested 

items are actually absurd, such as range of motion tests, physical therapy notes, 

muscle strength or other testing or even unidentified "diagnostic findings" which 

have no relevancy to the claimant’s particular diagnosis or treatment. As the 

Ninth Circuit noted, "fooling someone unfamiliar with the medical terms with 

irrelevant medical mumbo jumbo" does not satisfy the administrator’s statutory 

duty or Booton. Salomaa at 680. When something seemingly 'specific' is 

mentioned, such as the invitation to the claimant to submit “neuropsychologic 

testing,” it is never accompanied by the names of the specific tests that should be 

included in the battery and which of the innumerable effort tests are to be 

administered. The latter technique leaves the field open for the insurer to move 

the goal posts and reject whatever is submitted because the testing (allegedly) 

was not specific enough, or one particular test ---now identified--- was not done 

but (allegedly) ‘should have been,’ or even that the entire battery is invalid for not 

including some specific item or stated clinical observation.
Why have the administrators routinely ignored the mandate of this DOL 

requirement? The reasons are self-evident: If Claimants were actually told what 

was needed, and why, and so long as their health coverage would cover it, they 

would certainly undergo the specific type of test(s) that either had not previously 

been done and was needed or that which needed updating. The requisite 

explanation —with specificity— ‘why’ it is needed would help both the claimant 

and the treating provider ascertain its utility and its sensitivity and understand 

any specific parts that should be ordered; and the Claimant would submit it/them. 

The DOL’s emphasis through its detail in the new regulations to ensure actual 

compliance with this long-stated rule (which is also applied by the courts) will 

hopefully go a long ways toward eliminating the opacity that has and continues to 

unreasonably plague adverse decision letters in the insurers' respective efforts to 

skirt the stated requirements. Because insurers should have been doing this 

since 2000 (or before), it should not require any increased costs. Fiduciary 

compliance is essential to upholding the administrative integrity of this statutory 

scheme. Fort Halifax Packing Co., Inc. v. Coyne, 482 U.S. 1, 15 (1987); Weaver, 

990 F.2d at 157. In contrast, where the required specificity is replaced by opaque, 

mushy, unhelpful, or conclusory statements accompanied by a generic invitation 

to submit "medical records" or "whatever" the claimant wants to appeal those 

opaque reasons —particularly given the requirement for "meaningful" 

communications articulated by most of the jurisdictions (see Booton)— the only 

inference to be drawn is that the fiduciary is not being a faithful fiduciary but is 

playing a purposeful shell game; playing "hide the ball" in its self-interest to avoid 

having to pay a valid claim (—or significantly delaying payment of the valid 

claim). It is in the above way that insurers have waited in the weeds until after 

the denial and after an appeal to only then have an expert in the relevant field 

review records, answer limited pre-determined questions, the answers to which 

are already in the claim file, and/or conduct their adequate investigation and ask 

for certain information ---information would have been readily available upon 

request if they had just timely requested it before denying the claim. Another 

very frequently-encountered technique it to shift the investigation to the 

claimant, then waiting to articulate the details and underlying basis for each point 

of the denial in the final decision when it is ‘too late’ for the claimant to respond. 

Increased independence and impartiality of the reviewers and/or decisionmakers 

is paramount and is consistent with what the earliest regulations and underlying 

purpose of ERISA foresaw. The practice that claims administrators developed 
after 2000 of waiting until after an appeal to order an IME, or an FCE or a socalled ‘independent’ paper review by frequent and repeatedly used physicians 

and disallow claimants an opportunity to review, comment and address problems 

they see with such reviews is contrary to the promises underlying 

ERISA. However, the latter is an adversarial process, in contrast to the primary 

purpose of ERISA’s neutral and objective "internal review process" which is to 

provide a neutral, nonadversarial dispute resolution process (Glista v. UNUM Life 

Ins. Co.,, 378 F.3d 113 (1st Cir. 2004); Makar v. Health Care Corp., 872 F.2d at 

83; Short v. Cent. States, 729 F.2d at 575; Amato v. Bernard, 618 F.2d 559, 568 

(9th Cir. 1980)). Litigation cannot meet that objective. 

The new regulations' aim to correct this insurer-adversarial approach could well 

decrease the need for second or other voluntary appeals or even later litigation, 

all to the avoidance of further delay and cost to claimants.

The 2000 regulations ensured employee participants and beneficiaries’ effective 

access to the courts where administrators failed to conform with the standards of 

the claim regulations —and each of them 29 C.F.R. 2560.503-1, subsections "a" -

"o". And as they are each a ‘minimum’ standard, below which the regulations 

deem the insufficient process “unreasonable” as a matter of law (29 C.F.R. 

2560.503-1(b)) and violate the regulations. 29 C.F.R. § 2520.102-2, the deemed 

exhaustion provision in the new regulations simply reinforces that which 

subsection “l” and the related notice and comments had already assured 

employees in 2000.

The principle of effective access to the court in this remedial statute is also an 

express notice of the contractual suit limitations period and an accurate 

assessment of the accrual of the particular claim issue. These each are absolutely 

necessary to the process. Section 503, 29 USC § 1133, clearly requires 

conformance with the claims regulations, and as stated above, the 2000 

regulations provided for a deemed exhaustion of the Plan’s procedures by 

§2560.503-1(l), 65 Fed. Reg.70246 at 70255 (Nov. 21, 2000)(codified at 29 C.F.R. 

§ 2560.503-1 (a), as do the new regulations. The new regulations’ position on the 

resulting de novo review in a suit adjudicated under subsection “l” is unchanged 

from 2000. See ERISA, Rules & Regulations for Administration & Enforcement; 

Claims Procedures, 65 Fed Reg at 70255.
Therefore, Plan administrators and claims administrators including the insurance 

industry has had abundant opportunity to provide their input during the notice 

and comment period, both to the prior regulations on areas the current 

regulations reinforce and reemphasize, and more specific articulation of the 

Secretary’s position in the new regulations. The DOL’s decision making process 

has closed; the long-overdue regulations are well-reasoned and well-stated. The 

regulations should take effect as stated. They are extraordinarily important to the 

adequate protection of employee participants and beneficiaries, and the effective 

date is on the horizon. I vehemently oppose further delay, including the proposed 

90-day delay. It should be rejected. Insurers have been in the business of claims 

investigation and evaluation for well over a century. The new regulations should 

not implicate any substantial increase in costs, for these reasons and the fact that

for the most part, the new mandates are what the 2000 regulations already 

envisioned, but for the avoidance practices with which the insurance industry 

treated them. To the extent they claim an increase in cost, those are costs that 

were envisioned in 2000 related to the same responsibilities that exist in those 

regulations but have been so artfully skirted for the past 17 years. “Again, the 

effective date of the regulations should not be delayed. The insurers and Plans 

had more than enough time to make their case, and the DOL has addressed all of 

the concerns raised before the process closed. This is just an attempted 

‘mulligan’ by the insurance industry to derail what has been a fully completed and 

concluded notice and comment process of the Department of Labor —a process 

that has already closed. It should be seen for what it is. 

Respectfully submitted,

Susan L. Horner

 email: susanhorner@erisa-law.com

SUSAN L. HORNER | Partner

MILLER MONSON PESHEL POLACEK & HOSHAW

501 W. Broadway, Suite 700

San Diego, CA 92101

PH: (619) 239-7777

Fax: (619) 696-6163

e-mail: SusanHorner@erisa-law.com

website: www.mmpph.com