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December 7, 2017

By Email (e-ORI@DOL.gov) and Web Submission

Office of Regulations and Interpretations

Employee Benefits Security Administration

Room M-5655

United States Department of Labor

200 Constitution Avenue NW

Washington D.C. 20210

Re: Re-Examination of Claims Procedure Regulations for Plans Providing 

Disability Benefits

RIN No.: 1210-AB39

Regulation: 29 C.F.R. § 2560.503

Dear Deputy Assistant Secretary Hauser:

I write to comment on the Department of Labor’s unfortunate decision to delay and 

reexamine the final disability claims regulations (Final Regulation on Claims Procedure for Plans 

Providing Disability Benefits, 81 Fed. Reg. 92316 (Dec. 19, 2016)) that are currently scheduled 

to go into effect on April 1, 2018.

I represent and advocate on behalf of the disabled and have helped hundreds of people 

whose claims for disability benefits under employer-sponsored plans were denied. This work 

includes helping people during the administrative claims process and, when necessary, in 

litigation.

Employer provided disability insurance is a highly profitable insurance product. Most 

people in this country who have any form of private disability insurance have that through an 

employee benefit package, and it is often the only thing standing between those who have 

suffered a disabling injury or illness and complete financial devastation. Because of this, it is 

vitally important that disability claims be handled in a timely and fair manner by the insurance 

companies providing this coverage.
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Unfortunately, in my experiencing handling hundreds of disability benefit cases, the 

insurance companies and third party administrators who provide disability insurance in the 

workplace often fail to adequately consider the evidence before them, fail to inform insureds of 

what is necessary to perfect their claims, and fail to conduct reasonable investigations into claims. 

One of the reasons this happens so frequently is that disability insurers do not fear any adverse 

financial outcomes from wrongfully denying claims due to the lack of punitive damages 

remedies under ERISA. In my experience, disability insurers do much more thorough and fair 

work evaluating claims under individual non-ERISA disability policies. It is no secret that this is 

because of the threat of punitive damages for wrongfully denied claims: major players in the 

industry, such as the Unum Life Insurance Company, have been caught red-handed in leaked 

internal memoranda encouraging more aggressive claim denials in ERISA cases for this exact 

reason.

In addition to the aggressive and sloppy claims handling practices that are endemic in 

ERISA cases, disability claimants often have trouble finding representation to assist them in the 

administrative claims process and are often unaware that the process itself is their final chance to 

prove the merits of their claims. Because of this, the Department must take seriously its 

obligation to ensure that employees are treated fairly and have adequate opportunity to present 

their claims. That was exactly what happened when the final rule at issue here was adopted 

during the previous administration. I strongly encourage the Department not to rethink that 

rulemaking process, which was lengthy and exhaustive and which took account of all the 

objections to the final rule currently being raised by the industry.

The core argument being advanced against the final rule going into effect is the claim that 

it will increase the costs of providing coverage and therefore reduce overall coverage. This is 

not grounded in fact or data. 

As an initial matter, the cost argument was already considered and rejected by the 

Department in adopting the final rule – the current arguments are simply raising the same points 

again in the hopes that different personnel will reach different decisions. This is a wasteful 

undertaking for a set of changes to the existing regulations that is, at best, a modest change in the 

existing rules. The final rule does not impose any particularly onerous requirements; instead, it 

requires basic fairness, like the rule requiring insurers to explain why it is rejecting evidence 

when denying a claim, or the rule allowing plan participants to initiate legal action when they are 

not afforded the appeal process required by the regulations.

Moreover, data collected by the Department’s Bureau of Labor Statistics shows that there 

is simply no merit to the contention that a modest change in the claims regulations will have any 

impact on participation in employer-provided disability benefit plans. Between 1999 and 2014, 

BLS data shows that participation in employer-provided disability benefit plans has increased, 

not decreased, despite the adoption of detailed regulations effective January 1, 2002 that

established the basic framework for a fair claims process under ERISA section 503 – the final

rule that is currently being delayed merely tweaks that existing framework.

Again, I urge the Department to not change the final rule or further delay its

implementation. It was the product of a lengthy and reasoned rulemaking process in which the

insurance industry had ample voice. The current effort to undo that hard work makes the

Department and EBSA look like an agency that has been captured by the large corporations it is
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supposed to regulate. I hope the current leadership at the Department is willing to do what is

necessary to change that impression.

Sincerely,

/s/

James P. Keenley

BOLT KEENLEY KIM LLP