From: Scott Riemer [mailto:sriemer@riemerlawfirm.com] 

Sent: Wednesday, December 06, 2017 5:10 PM

To: EBSA, E-ORI - EBSA

Subject: 1210-AB39

Office of Regulations and Interpretations,

Employee Benefits Security Administration

Room M-5655

U.S. Dept. 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 in opposition to modifying or further delaying the final disability claims regulations 

(Final Regulation on Claims Procedure for Plans Providing Disability Benefits, 81 Fed. Reg. 

92316 (Dec. 19, 2016)) that are now scheduled to go into effect on April 1, 2018. 

My firm, Riemer & Associates, LLC, based in New York City, has been representing long term 

disability claimants under ERISA since 1994. Our firm has three attorneys and five paralegals 

and represent hundreds of claimants each year. We represent claimants at every stage of the 

claim process from helping with claim applications through litigation in Federal Court. I have 

written a book titled “An Attorney’s Guide to ERISA Disability Claims,” published by James 

Publishing in 2014. 

The concerns raised by the insurance industry are not new. Indeed, these objections appear to be 

simply a re-argument of the merits of the final rules. Those rules are based on policy choices 

made by Congress, this Department, and the federal courts. For the following reasons, the final 

regulation should be made effective as is. 

I. The Regulation Will Not Increase Costs

The industry claims if the final rules go into effect there will be an increase in costs that will 

increase premiums resulting in less access to disability benefits. This is untrue. 

This costs argument was made in various industry comments to the proposed rules before final 

adoption. The Department concluded that costs would not outweigh the benefits. The current 

cry of increasing costs is an argument that has already been considered and rejected.

Nonetheless, the Department has asked for data addressing whether costs increased in response 

to the last set of rules applying to ERISA disability plans that became effective in 2002. In fact, 
the Department can rely upon information supplied by its own Bureau of Labor Statistics. 

https://www.bls.gov/opub/btn/volume-4/disability-insurance-plans.htm.

The data shows access and participation in employer-based disability insurance has increased, 

not decreased, between 1999 and 2014. This increase occurred despite that employment in the 

service industry has increased, an industry in which employees are the least likely to have access 

to employer-based disability coverage. This increase also occurred despite the 2000 disability 

claims regulations and a series of court decisions addressing conflicted decision-making, deemed 

exhaustion, the need to discuss and explain adverse benefits decisions, and the participants right 

to respond to new evidence. I would therefore be suspicious of any data supplied by the industry 

now that suggests employers would abandon disability coverage due to the costs of codifying 

these principles. This BLS document also demonstrates that the cost of disability insurance is 

extremely modest. Thus, even if costs did increase, the increase would be so small that it is 

unlikely to make any difference. 

The Department also has asked for data about whether disability premiums increased in response 

to the adoption of statutory bans on discretionary language clauses in disability policies by some 

states. Notably, during the time period of the BLS study, many states enacted discretionary 

clause bans. This includes but is not limited to Arkansas Admin. Code 054.00.101-4 (2013); Cal. 

Ins. Code §10110.6 (2012); Colo. Rev. Stat. §16-3-1116 (2008); 50 Ill. Admin. Codes 2001.3 

(2005); Md. Code ann. Ins. §12-211; Mich. Admin. Codes. R. 500.2201-2202 (2007); R.I. Gen. 

Law §§ 27-18-79; Tex. Admin. Code §3.1202-1203; Tex. Ins. Code §1701.062, §1701.002 

(2011); WAC §284-96-012 (2009). Notwithstanding these statutory developments, access and 

participation in disability plans increased according to the BLS data.

Also, during the period covered by the BLS document, two major insurers with significant 

market share, UNUM and CIGNA, were examined by the states for poor claims handling and 

became subject to fines and Regulatory Settlement Agreements that raised the bar for their 

claims administration. 

http://www.maine.gov/pfr/insurance/publications_reports/exam_rpts/2004/unum_multistate/unu

m_multistate.html; 

http://www.maine.gov/pfr/insurance/publications_reports/exam_rpts/2009/pdf/cigna_mcreport_2

009.pdf. 

https://www.insurance.ca.gov/0400-news/0100-press releases/2013/release044-

13.cfm. Nonetheless, during this period access and participation increased.

Given this history, I dispute any claim that costs will increase in response to the modest changes 

in the final rules. Accordingly, I urge the Department not to change the final rules in response to 

the industry’s strained assertion that the costliness of the final rules will impact access to 

disability benefits in the workplace. 

 

II. Costs Do Not Outweigh the Benefits
Even if, arguendo, the new regulation would result in a modest increase in costs, the Department 

is not required to avoid all regulations that affect the market in some way. Mkt. Synergy Grp. v. 

United States Dep't of Labor, 2016 U.S. Dist. LEXIS 163663, 2016 WL 6948061 (D. Kan. 

11/28/2016). As well, it is not clear that, whatever the costs of the final rules, they would 

outweigh the benefits. The Department has already articulated its purposes – to make sure 

claims are fairly adjudicated and to prevent unnecessary financial and emotional hardship. The 

Department should ignore the industry's invitation to abandon these purposes. Moreover, these 

benefits cannot be outweighed by costs where the ERISA process is already so slanted in favor 

of the plan administrators. 

ERISA disability claimants who are denied their benefits face a process that is far below the 

standard for regular civil disputes. These procedural hurdles include: (1) there are no jury trials; 

(2) there is a closed record from the claims process that can rarely be supplemented in litigation; 

(3) courts often apply an unfavorable standard of review, and (4) there are no remedies to 

discourage unfair and self-serving behavior on the part of plans. This will never be a level 

playing field much less one that favors plan participants. United States v. Aegerion 

Pharmaceuticals, Inc., 2017 WL 5586728, at *7 (D.Mass. 11/20, 2017)("The insurance industry 

found it could largely immunize itself from suit due to the Employee Retirement Income 

Security Act (“ERISA”).) Even with the final rules in place, plan participants will not have 

achieved the “higher-than-marketplace standards” that the Supreme Court insists are required in 

processing ERISA claims. MetLife v. Glenn, 554 U.S. 105, 115 (2008). Any consideration the 

Department makes about the benefits of the final rules relative to costs should take this “higherthan-marketplace” expectation into account and acknowledge that ERISA exists to protect plan 

participants. 

The Department has already acknowledged that the disability claims industry has been 

needlessly adversarial toward ERISA disability plan participants and has received many 

comments to that effect. The industry's argument that the final rules are bad for participants –

despite all evidence to the contrary - cannot be taken seriously. The industry is not a credible 

advocate for participants. 

Furthermore, from the perspective of plan participants, an inexpensive but illusory disability plan 

is worse than no plan at all. It is important to note that when a disability claimant is unfairly 

denied benefits that he/she thought was promised through an employer's plan, it is too late to go 

out and purchase private individual insurance to cover the risk of becoming destitute. Disabled 

claimants are often shocked when they are told about ERISA's procedural hurdles. So, to the 

extent that increased protections bring disability claims administration in line with the reasonable 

expectations of the employee-participants, the costs are outweighed by the benefits. 

If there are costs associated with the final regulations, these costs could and should be tolerated 

in the name of supplying a modicum of protection for plan participants. 

III. Distinguishing SSA Determinations Does Not Increase Costs
This rule merely requires disability plans to observe a fundamental due process principle that is 

imbedded in ERISA—namely the principle that a claimant is entitled to a well-articulated 

explanation for the adverse benefits decision so that the participant may fairly dispute it. The 

2000 regulations require no less. 

As the Department has already noted, it is doubtful that there are costs associated with the 

requirement of discussing the reasons for disagreeing with a favorable Social Security decision. 

ERISA disability benefits have always been deeply intertwined with the Social Security system 

and mostly are simply supplemental to Social Security benefits. Most disability plans require 

claimants to apply for the SSA benefit, and the plans usually provide representation for claimants 

before the SSA. This is done so that the plan may take advantage of the plan term that the SSDI 

benefit will offset the LTD benefit. Indeed, in many cases the ERISA disability benefit is de 

minimis or non-existent once this offset is taken. In order to decide which claimants qualify for 

this representation, plan claims handlers need to know the standard that the SSA uses. Comment 

#114, p.8 (ACLI). Disability claims administrators’ operational manuals devote many pages to 

deciding whether the claimant is disabled enough to be referred to counsel for representation 

before the Social Security Administration, and how to offset or recover the benefits once they are 

successful, and how to express all of this to the claimant. 

To the extent that the industry argues that increasing the cost of disability insurance will burden 

the government, and more specifically the SSA, the Bureau of Labor Statistics publication 

speaks to this:

It is important to note that expanding access to employer-provided disability 

insurance would not necessarily relieve the burden on SSDI. The ability to access 

disability insurance does not affect a worker’s eligibility for SSDI. People can 

receive SSDI benefits and long-term disability payments, but the private disability 

insurance payment is usually reduced by the amount of the SSDI payment.

https://www.bls.gov/opub/btn/volume-4/disability-insurance-plans.htm.

Additionally, the disability plans and insurers are required in many jurisdictions to discuss why 

they are denying a disability claim when the Social Security Administration awarded benefits 

under an obviously more strenuous standard. Montour v. Hartford Life & Acc.Ins Co., 588 F.3d 

623, 635-637 (9th Cir. 2009); Salomaa v. Honda Long Term Disability Plan, 642 F.3d 666, 679 

(9th Cir. 2011); Bennett v. Kemper Nat. Services Inc., 514 F.3d 547, 553-554 (6th Cir. 2008); 

Brown v. Hartford Life Ins. Co., 301 F. App'x 777, 776 (10th Cir. 2008). As a matter of Supreme 

Court precedent, it is arbitrary and capricious for the claims administrator to advocate for Social 

Security benefits, reap the benefit of the Social Security award by means of an offset, and then 

ignore the SSA’s determination. Metropolitan Life v. Glenn, 554 U.S. 105 (2008). As the 

industry comments often acknowledged, requiring an explanation of the reasons for disagreeing 

with the Social Security decision and other contrary evidence tracks the existing 

standard. Logically, it should not increase costs to simply codify this standard. 
Moreover, it would appear to increase insurer costs if they need to treat claimants in certain 

circuits (to satisfy existing case law) different than claimants in other circuits. A rule clarifying 

that an explanation of the basis for disagreeing with a Social Security decision is a requirement 

will increase uniformity and predictability in the process, which is generally associated with 

costs savings and not cost increases.

IV. “Deemed Exhausted” Does Not Increase Costs

The industry’s concern about this rule seems to be that plaintiffs and their attorneys will race into 

court, increasing the volume of ERISA litigation and hence the overall costs of administering 

disability claims. This is incorrect. Plaintiff’s attorneys are ever mindful of building a record on 

which the court will make its decision and therefore would rather engage in the appeal process 

and exhaust internal remedies. This serves the dual purpose of possibly resolving the dispute and 

creating a record for the court to review in case the dispute cannot be resolved internally. Under 

the final rule, the plaintiff will mostly obtain a remand with instructions for the plan to do its 

job. Because plaintiff’s attorneys usually work on a contingent fee basis, it does not make sense 

to undertake litigation that is not absolutely necessary and that will not result in resolving the 

case on the merits.

Further, a court will only award attorney fees for litigation where the plaintiff has achieved some 

degree of success on the merits. Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 255 

(2010). In other words, the industry comments are seriously out of step with litigation in the real 

world and how the incentives are aligned to discourage litigation. While this rule may appear to 

create additional trips to court, it will not do so except in the most extreme cases. I take it that 

addressing these extreme cases is the purpose of the final deemed denied rule.

Additionally, as with most of the other final rules, this rule is simply a codification of existing 

judge-made law. Claimants are already able to get into court when the claims process has failed 

them in a meaningful way. See e.g. Brown v. J.B. Hunt Transp. Servs., 586 F.3d 1079, 1085-86 

(8th Cir. 2009) (failure to respond to request for documents excused claims from exhaustion 

requirement because there was no full and fair review). It is not likely that additional costs will 

result from this regulation. Hall v. National Gypsum Co., 105 F.3d 225, 231-32 (5th Cir. 1997);

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. Employee. 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). 

V. Requiring the Opportunity to Respond to Evidence Does Not Increase Costs

Permitting a claimant the opportunity to respond to evidence is fundamental to full and fair 

review. The Department has already acknowledged the importance of this rule and that it is 

already the standard in some jurisdictions. The industry complains that providing the claimant 

with new evidence or rationales before making a final decision is costly. The industry’s claim to 

cost impact is suspect for several reasons.
First, several disability plans or insurers already provide for the right to review and 

respond. They do so on a voluntary basis, as their comments to the proposed rules 

showed. Second, courts require plans or insurers to do this in many cases. Lastly, whether they 

provide this information to the claimant during the ERISA appeal process, they will have to 

provide it eventually in one form or another. New reasons or evidence will need to be included 

in the claim file and likely again in 26(a)(1) disclosures. Thus, the industry's portrayal of the 

chaos that might ensue if they were required to supply these documents is not credible. If the 

issue is the cost of mailing, such a concern should not be permitted to interfere with such basic a 

due process right. 

It is important to note what this rule does. It permits a claimant to respond to a disability claims 

administrator’s assertions in a way that will make the response a part of the record if the claimant 

has to go to court to vindicate his/her rights. This is because most ERISA cases are decided on a 

closed record. Without this rule, the claims administrator’s new evidence or rationale will be 

included in the record that the court reviews, but the claimant’s rebuttal will not. Perhaps what 

the industry is really chafing about is the loss of its ability to strategically withhold information 

that would help the claimant achieve reversal or win his/her case in court. 

There is no question in my mind, after years of experience representing ERISA claimants, that 

the ability to sandbag the claimant with a new medical opinion that he/she cannot refute, or a 

new plan provision to rely upon that he/she cannot counter, is a prized device in the disability 

claims industry. The final rule needs to be kept in place to prevent this behavior from stamping 

out otherwise meritorious disability claims. 

If the industry’s concern is that the claims handlers need to do more in the same amount of time, 

this could be addressed by modifying the rule instead of eliminating the rule 

altogether. Commenters from both sides have suggested as much. 

I also dispute the industry’s comments to the effect that a second appeal, which is offered with 

some plans, serves the same purpose as the right to respond to new evidence or rationales before 

a final decision. This is clearly not true, as a second appeal permits the claims administrators the 

same sandbagging opportunity as the first appeal. Second appeals are not necessarily a boon to 

plan participants. Additionally, second appeals are not universal and are not required. The 

second appeals that the industry touts are a matter of plan design and can be changed at any time 

by plan sponsors. It may be that second appeals will become obsolete where the claimant has a 

true right to respond. 

Sincerely Yours,

Scott M. Riemer, Esq.

Managing Attorney

Riemer & Associates, LLC

60 East 42nd Street, Suite 1750
New York, New York 10165

Phone: 212-297-0700

Fax: 212-297-0730

sriemer@riemerlawfirm.com

www.riemerlawfirm.com

This communication may contain privileged and confidential information

and is protected by the Electronic Communications Privacy Act, 18 U.S.C.

Secs. 2510-2521. It is intended only for the use of the recipient named above.

If you are not the intended recipient of this communication, or the employee or

agent responsible for delivering it to the intended recipient, you are hereby

notified that any dissemination, distribution, or copying of this communication

is strictly prohibited. If you have received this communication in error,

please immediately notify us by collect telephone call and return the original

message to us at the address above via United States Postal Service.