From: Corinne Chandler [mailto:CChandler@kantorlaw.net] 

Sent: Thursday, December 07, 2017 1:28 PM

To: EBSA, E-ORI - EBSA

Subject: RIN: 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 understand that the Department is considering 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.

I write this letter to discourage any modifications of the Regulations which were approved to go into 

effect. I believe I have a unique perspective on the importance of these Regulations since I have spent 

over 35 years in legal practice representing both disability carriers and insureds. The new Regulations 

clarify and provide uniformity to two issues which frequently arise in ERISA litigation: (1) Administrators 

must meaningfully address a favorable Social Security Award and (2) Administrators must provide, upon 

request, a copy of their reports and files to their insureds.

The first issue requires carriers to discuss any basis for disagreement with a favorable Social Security 

decision. ERISA plans are typically structured so that the insurers take the benefit of any Social Security 

Award by reducing their own benefits by the amount of the Award. As a result, insurers require 

insureds to apply for Social Security benefits and frequently retain vendors such as Alsup or Advantage 

2000 to represent the insureds in the Social Security Administrative proceedings. The insurers receive 

periodic reports from their vendors regarding the status of the Social Security proceedings. Since they 

work closely with their own vendors, insurers could easily obtain the medical evidence accumulated in 

the Social Security proceedings, including medical and vocational reports. If the insurer is required to 

consider the evidence relied upon by the Social Security administration, it may actually decrease costs 

incurred by carriers since they will not have to retain their own experts to conduct medical 

examinations.

In addition, in many jurisdictions, disability plans and insurers are required 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 favorable Social Security Award. 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. 

The second issue involves the responsibility of an administrator to provide its insured with new evidence 

or rationale developed during the appeal review. This rule 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, such as MetLIfe and Aetna, 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. Last, 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 FRCP 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. 

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. 

Corinne Chandler

Kantor & Kantor

19839 Nordhoff St.

Northridge, CA 91324

cchandler@kantorlaw.net

(818) 886 2525