Employee Benefit Security Administration
January 19,2016
Page 3 of 11

e A requirement that the claimant be allowed to respond to new evidence, even with
the limitations proposed below, will extend the claim determination process
substantially, particularly if this is required to be done piecemeal as each piece of
new evidence arrives.

e Likewise, the ability of a claimant to truncate the claim process and deem it
exhausted — for any reason or no reason, at any number of points in the process
that the claimant deems appropriate, and without prior notice to the plan — simply
by alleging that a procedural violation has occurred, will stretch out claims
interminably, not to mention adding litigation costs, as discussed below.

e Similarly, requiring plans to contact third party payers, obtain files, review files,
continually update files, etc., will add time and expense to the disability benefit
determination process.

All of this is contrary to the Department’s stated goal.
ec. Increased Litigation

Another stated goal of the proposals is to counter perceived increases in disability
litigation. No data are presented to support the conclusion that disability litigation is out of
proportion to the number of disability claims and the facts are to the contrary. In 2014, lawsuits
challenging Unum’s disability claim determinations represented only 1/10" of 1% of submitted
claims. Additionally, disability litigation against Unum has declined over the past 10 years.

Unum believes the Department’s proposals will increase disability claims litigation. One
primary example of increased litigation is the Department’s “deemed exhausted” proposal. This
proposal would not reduce the volume of disability claims litigation. It allows claimants — at their
sole discretion, apparently — to declare a claim process at an end and to launch a lawsuit. Once
filed, the lawsuit will involve analysis of multiple ill-defined issues, such as prejudice, good
cause, efforts to maintain a good faith exchange of information, whether the alleged mistake was
beyond control of the plan, and so on. Unum believes that such a provision will increase and not
reduce disability claims litigation. Presumably, the Department is assuming that claimants will
be reluctant to sue. However, in Unum’s experience, many claimants are represented by lawyers,
especially at the appeal stage. The current proposal allows these lawyers to lie in wait and file
suit as soon as a perceived mistake has been made, with no regulatory penalty whatsoever or
without any prior notice to the plan or opportunity to explain or correct the mistake. The costs of
a lawsuit will then be used as leverage for settlement, regardless of the merits of the underlying
claim. In fact, depending on when the process is truncated and suit is filed, there may not even be
enough of a substantive record to determine the merits of the claim. We would conclude this
cannot be the Department’s intent.



Employee Benefit Security Administration
January 19, 2016
Page 8 of 11

otherwise entitled to disability benefits. Of the proposed amendments, this creates the greatest
chance of increased delays and costly litigation while at the same time offering no legitimate
substantive advantage to claimants who are entitled to benefits.

Unum suggests that this proposal be deleted from the final regulations. If the Department
decides to move forward with some version of this proposal, Unum suggests that before a
claimant is permitted to file suit, the claimant must first notify the plan in writing of the
claimant’s contention that there has been a procedural violation and allow the plan a given period
of time (e.g., 14 days) to respond. Many perceived “violations” may reflect a misunderstanding.
Prior notice to the plan allows the parties to clear up the misunderstanding before a federal court
is required to intervene. Finally, Unum suggests that a claimant only be permitted to truncate the
claim review process once during a given claim.

With regard to the proposal regarding de minimis violations, as the United States
Supreme Court stated in Conkright v. Frommert, 130 S. Ct. 1640, 1644 (2010), “[p]Jeople make
mistakes,” and Unum appreciates the Department’s recognition of the fact that not all mistakes
are sufficient to fatally taint the claim review process. Minor mistakes also should not be
sufficient to result in a federal lawsuit. Under the proposed regulatory requirements, if a claimant
truncates the claim review process and files suit, for any reason (including what may eventually
be determined a de minimis violation), the parties are then required to litigate whether (a) the
mistake was prejudicial, (b) the mistake was for good cause, (c) the mistake was beyond the
control of the plan, (d) the mistake occurred in the context of an ongoing, good faith exchange of
information, and (e) the mistake was not part of a “pattern or practice.” If this proposal is not a
recipe for long drawn out litigation, nothing is. The only factor that should matter is whether the
mistake prejudiced the claimant’s right to a full and fair review, period. Even then, whether a
mistake is prejudicial may not be capable of determination until after the claim is decided.
Certainly if benefits end up being approved, a procedural mistake is irrelevant and an intervening
lawsuit would be a waste of resources. The bottom line is that the Department should let the
claim process be completed before the parties end up in court.

c. Additional Disclosure Requirements

Summary of Comments Regarding Proposed Subsection (g)(1)(vii)(A): Unum suggests
that the Department delete the requirement that a denial letter include “the basis for disagreeing
with” third party payers. The definition of “third party payers” can mean almost anything,
including medical plans, life insurance plans, worker’s compensation plans, pension plans, other
disability insurance policies, etc. The current proposal would require plans to seek out entire
claim files of third party payers in order to determine the basis for other benefit awards and to
determine the relevance, if any, of such awards to the claim at issue. These files, unlike a typical
Social Security file, are not static, but are updated and developed over time. A third party payer’s
decision at one point to award benefits may be changed at a later date as additional evidence is
accumulated and definitions of disability change over time. Unum is required to pay benefits



Employee Benefit Security Administration
January 19, 2016
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Summary of Comments Regarding Proposed Subsection (h)(4)(ii): As currently drafted,
this proposal creates the risk of an endless series of back-and-forth between the plan and the
claimant, unduly extending the claim process without any appreciable benefit to the claimant.
Unum proposes that any new evidence be submitted to the claimant at one time and that the
claimant be permitted one response with plans being permitted to obtain further clarification
from qualified health care professionals with no requirement for further response by the
claimant. Unum also proposes that adjustments be made to the decision time periods, including
tolling and a minimum period for the plan to issue its decision after it receives a response from
the claimant.

Proposed subsection (h)(4)(ii) requires that, during the appeals portion of the claim
process, the claimant be given the opportunity to review and respond to “new or additional
evidence.” There are two primary concerns with this proposal: (1) the possibility that this
proposal creates an endless loop of responses, which would drag out the claim process and
thereby harm claimants, and (2) there are no provisions for tolling or other timing provisions that
are necessary to carry out the requirements of this subsection.

With regard to the first concern, the vast majority of disability benefit claims are based on
medical evidence and a determination of whether the claimant is disabled. Since 2002, the
ERISA claim regulations have explicitly required that where a benefit claim requires medical
judgment, a plan is required to consult with a qualified health care professional. The way this
works in the disability context is that when a plan is presented with medical records and/or a
treating physician opinion, the plan refers the file for review by a qualified medical professional
or requests an “in person” medical examination (e.g., independent medical examination,
functional capacity evaluation, etc.). Unum believes that when this is done during the appeal
phase, the proposed amendment would require Unum to disclose such a report to the claimant for
response before the plan renders an appeal decision. Therefore, in almost every single appeal this
required medical opinion would have to be provided to the claimant with the opportunity to
respond.

Assuming the claimant does respond, it is highly likely that the response will come from
the claimant's treating doctor or some other medical professional hired by the claimant or the
claimant's attorney. Unum’s interpretation of this proposal is that the response would then be
forwarded for further review by a medical professional who may or may not be the same medical
professional who did the review or conducted the examination earlier during the appeal process.
The Department’s preamble seems to suggest that the further response from the consulting
medical professional would need to be sent again to the claimant for further review and response.
If the claimant then submits yet another opinion from the claimant’s doctor, that response again
would be sent for further review by a medical professional, which would again need to be sent to
the claimant for review and response, etc., etc. An endless process of appeal is neither in the best
interest of the DOL, claimants nor claims administrators.


Employee Benefit Security Administration
January 19, 2016
Page 4 of 11

Unum believes that the proposed regulations will not fulfill the Department’s purposes in
issuing these proposals, i.e., that disability and medical claims are similar and should be subject
to similar requirements, that revised regulations will not result in increased administrative costs,
and that the proposals will reduce litigation. In fact, the proposals will likely run counter to those
purposes. The unique nature of disability benefit claims and a goal of reducing (or at least not
increasing) costs and mitigating the prospects of premature and useless litigation, all form the
basis for Unum’s comments on the proposed regulations.

Il. Comments on Proposed Regulations

a. Right to Review and Respond to New Information and New Rationales

Summary of Comments Regarding Proposed Subsection (h)(4)(i): This subsection should
be deleted as redundant and confusing.

Proposed subsection (h)(4)(i) requires that, during the appeal stage of an administrative
proceeding, a claimant must be allowed to review the “claim file” and present “evidence” and
“testimony” as part of the “disability claims and appeals process.” This entire section appears to
be redundant and unnecessary. Subsection (h)(2)(iii) already requires that a claimant must have
access to relevant documents, so saying specifically that a claimant should be given the right to
“review the claim file” adds nothing substantive, especially when the phrase “claim file” is
defined as essentially a collection of “relevant” documents. Likewise, subpart (h)(2)(ii) already
gives claimants the right to “submit written comments, documents, records, and other
information,” so suggesting that they can also submit “evidence” and “testimony” also adds
nothing substantive. If the Department is suggesting that “evidence” and “testimony” is
something different than “written comments, documents, records, and other information,” then
subsection (h)(4)(i) needs clarification. We also note that the Department’s preamble says that
“written testimony” can be submitted whereas the proposed regulation itself omits the adjective
written” and merely references “testimony.” Presumably the Department is not suggesting that
disability claims require a right to an oral hearing. Finally, although subsection (h) deals with the
appeals portion of the claim process, use of the phrase “disability claims . . . process” in
subsection (h)(i) causes confusion as to whether the requirements of that subsection are intended
to apply only to the appeals portion of the process which is the subject matter of subsection (h) or
also would apply to the initial stage of the claim process, which is the subject of subsections (f)
and (g). In summary, Unum believes that subsection (h)(i) is redundant and unnecessary.

* The Department’s reference to a “claim file” is unclear. In common usage, the term “claim file” is typically a
shorthand phrase for the regulatory phrase “relevant” documents or information. In fact, the Department’s proposed
amendment to subpart (m)(9) essentially defines “claim file” as “relevant” documents or information as defined in
subpart (m)(8). There does not appear to be any reason to add a new term “claim file” to the regulations when it
appears to mean the same thing as an existing term that claimants and plans have used for over a decade.


Employee Benefit Security Administration
January 19, 2016
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time to render its decision that should at least equal the time the claimant is given to respond, as
discussed above.

b. Deemed Exhausted Requirement

Summary of Comments Regarding Proposed Subsections (1)(1)-(2): Unum believes that
this proposal will result in increased administrative and litigation costs. The Department should
delete the “deemed exhausted” proposal and let the claim process take its course under the
existing regulations. Alternatively, if the Department decides to move forward with a version of
its proposal, Unum suggests that a claimant be required to give prior written notice to the plan of
any perceived procedural violations before filing suit and that there be an opportunity for the
plan to respond. Unum also proposes that a claimant only be permitted to truncate the claim
process once for a given claim. Unum suggests that the Department continue to maintain a de
minimis threshold that must be crossed before allowing an administrative mistake to be lead
directly to litigation.

Under current law, courts require claimants to exhaust administrative processes before
bringing suit. There are several reasons for this requirement, but the primary reasons are that an
exhaustion requirement ensures that most issues are resolved or at least crystallized at the
administrative stage so the parties can avoid a lawsuit and that exhaustion allows the parties to
develop a factual record in an informal and less expensive setting rather than doing so through
costly discovery in a lawsuit. The exhaustion requirement results in a streamlined litigation
process that benefits claimants, plans, and the greater class of participants who rely on their
employers to provide disability benefits as reasonable costs. The already existing exceptions to
exhaustion are futility and the absence of an adequate claim review process.

Where a claim has been fully exhausted and an appeal determination has been rendered,
the claimant is permitted to seek relief in court. This allows the parties to litigate substantive and
procedural issues in one forum at one time. If the plan’s administrative process is sufficiently
defective, courts can remand the claim to the plan for application of the correct process.

In contrast to current practice, proposed subsections (1)(1)-(2) appear to allow a claimant
to terminate the claim review process at any point where the claimant alleges that the plan has
violated the claim process, no matter how minor the violation and regardless of whether it
prejudices the claimant. That may work in the context of medical claims that involve one-time
determinations and limited issues. However, it will not work in the disability claims context,
especially when the claimant can apparently do this on more than one occasion. The Department
may be assuming that claimants will be reluctant to go to court. That may be true in some
situations. However, the reality of litigation is such that, given how the proposal is currently
drafted, it raises a strong possibility of gamesmanship by claimants’ attorneys who are very
aware that if they can initiate suit on even the most minor perceived violation, they can push the
plan into a potential settlement to avoid the costs of litigation even where the claimant is not


2211 Congress Street

. Portland, ME 04122
207.575.2211

www.unum.com

December 11, 2017

Submitted Electronically via e-ORI@dol.gov

Office of Regulations and Interpretations

Employee Benefits Security Administration

Room N-5655

U.S. Department of Labor

200 Constitution Avenue NW.

Washington, DC 20210

Attention: Claims Procedure for Plans Providing Disability Benefits Examination

Subject: Claims Procedure for Plans Providing Disability Benefits; Extension of
Applicability Date (RIN 1210-AB39)

Dear Sir/Madam:

These comments are submitted on behalf of Unum Group (“Unum”) which through its insurance
subsidiaries is the nation’s largest group disability insurance carrier. Unum appreciates the opportunity to
comment on the Department of Labor’s (“Department”) extension of the applicability date of the final
rule amending disability claims procedures (81 Fed Reg. 92316 (Dec. 19, 2016), the “Regulation”) under
the Employee Retirement Income Security Act of 1974 (“ERISA”).

Unum and its insureds are significantly impacted by ERISA disability claims regulation changes.
Pursuant to Executive Order 13777, the Department seeks additional input regarding the regulatory
impact analysis in the Regulation so that the Department may consider whether it supports regulatory
alternatives other than those adopted in the Regulation. Unum strongly urges the Department to conduct
an appropriate cost benefit analysis given that the Regulation was issued by the prior administration
without benefit of relevant data. Additionally, Unum asserts that an appropriate review of the Regulation
will lead to the inevitable conclusion that the costs of the Regulation far outweigh any benefits.

Unum submitted extensive comments opposing the Regulation during the initial comment period, and
those comments, in the attached letter, remain relevant today. Additionally, Unum is a member of the
American Council of Life Insurers (“ACLI”) and incorporates comments made by ACLI on its member
companies” behalf as well as the data submitted as an attachment to ACLI’s comment letter (both of
which were submitted to the Department on December 11, 2017). Unum supports the Department’s
consideration of regulatory alternatives and believes that the data submitted by ACLI, strongly supports
the Department undertaking further analysis and advancing regulator alternatives to the Regulation. In


Employee Benefit Security Administration

January 19, 2016

Page 10 of II

determine that no provision has any conceivable application in order to certify that there is no
such provision, accomplishes nothing and adds significant cost and delay to the claim process.

d. Independence and Impartiality

Summary of Comments Regarding Proposed Subsection (b)(7): Unum suggests that the
requirements in subsection (b)(7) that hiring decisions not be made “based upon the likelihood
that the individual will support the denial of benefits” and that medical experts may not be hired
based on “reputation for outcomes” are unnecessary and should be deleted.

Unum agrees with the concept that claim personnel should be unbiased. Unum’s policy is
that employment decisions cannot be made based on claim outcomes, whether they be approvals
or denials. The concern with the proposal as currently drafted is that it potentially invites broad
discovery and will increase litigation expense substantially. That is contrary to the Department’s
stated intention. With respect to medical experts, the preamble refers to an expert’s “reputation
for outcomes in disputed cases.” In practice and in theory, there is no way to measure
“reputation” in this context. Again, this invites litigation. Moreover, courts already take “conflict
of interest” into account when reviewing benefit determinations and parties are certainly in a
position to argue reputation issues, whether they apply to experts hired by plans or experts hired
by claimant’s or their lawyers.

e. Notices for Contractual Limitations Periods

Summary of Comments on Contractual Limitations Periods: Unum suggests that the
Department not include such a requirement. Alternatively, Unum suggests that the Department
only require that contractual limitations language be included in the appeal denial letter, if it
exists and that no requirement be imposed for stating a specific deadline or for updating the
notice.

Unum suggests that the Department not impose such a requirement. The limitations
period is already contained in the plan document and the plan summary. The summary is the
document designed for consumption by plan participants. There is nothing to be gained by also
including plan summary language in the appeal denial letter. If an appeal denial letter is required
to include a limitations period that is already in the plan document and plan summary, what other
information will be required in the future for appeal denial letters? Will the denial letter simply
be a reiteration of the plan? If so, it will no longer serve its purpose under the regulations which
is to explain the reason(s) for the denial. If the Department decides to move forward with such a
requirement, Unum urges the Department to require that the denial letter include only the
contractual limitations language from the plan and not a specification of the precise deadline and
certainly not a requirement that the deadline be updated from time to time. A requirement for a
precise deadline and updating of the deadline would mean that plans must anticipate tolling or
similar arguments from claimants, which places an undue burden on plans.


Employee Benefit Security Administration
January 19, 2016
Page 9 of 11

according to the terms of its policies, not according to the terms of other third party payers’ plans
and policies. This process adds substantial delays to an already complicated claim process with
little benefit to claimants who must wait for files to be obtained, reviewed, and updated.

Proposed subsection (g)(1)(vii)(A) requires notice of an adverse benefit determination to
include “the basis for disagreeing with” the opinions of (a) treating professionals, and (b) other
third party payers, who granted the claimant’s “similar” claims. Unum’s existing practice is to
discuss why it disagrees with the treating doctor and why it disagrees with a Social Security
Administration decision, if any. That discussion requires Unum to analyze these opinions and
decisions and to obtain all records related to the opinions and decisions, including the Social
Security Administration file, all of which can take weeks or months. If plans are also required to
discuss decisions of other “third party payers,” they will be required to obtain their files as well.
Obtaining files from other disability insurers is problematic because such files are fluid, not
static. Unlike Social Security where the file is pretty much fixed once a determination is made,
information is acquired and added to insurers’ disability files all the time, especially from a
medical perspective given our ongoing contact with the insured’s treating physician(s). A plan
might obtain the third party payer’s file on one day and the next day, the content of the file could
change dramatically. Plans would also be required to keep track of how other third party payers
are updating their decisions over time. All of this will require a plan to continually contact the
third party payer to confirm that it has the most updated information. Again, such updates are
less common in the context of Social Security. The proposal also fails to define what constitutes
a “similar” claim. Presumably this means at a minimum the same definition of disability. Does it
also mean the same evidence? Finally, the proposal says nothing about situations where third
party payers have denied “similar” claims or whether plans are required to discuss such denials.

Summary of Comments Regarding Proposed Subsection (g)(1)(vii)(B): The proposal
requiring disability plans to certify that there is no applicable internal guideline should be
deleted.

Proposed subsection (g)(1)(vii)(B) requires disclosure of internal rules and guidelines
relied upon on making an adverse benefit determination or a statement that no such internal rule
or guideline exists. This proposal extends confusion that exists in the current regulations issued
in 2000. The reference to internal rules and guidelines is more applicable to certain types of
medical claims (e.g., medical necessity, experimental procedure, usual and customary fees, and
the like) where health insurers typically have extensive internal medical guidelines to guide these
decisions. That is not the case with disability plans. Disability decisions are based on the terms of
the plan and the unique facts of the claim. Relevant provisions of the plan are already required to
be disclosed in the determination notice. The plan documents are the “guidelines” under which
such claims are determined. While disability plans may have “claims manuals” in various forms,
these materials are mainly procedural rather than providing guidance for substantive decisions. If
there is an applicable guideline and it is relied on to make the benefit determination, it can be
disclosed. However, to require claim personnel to comb hundreds of pages of a claims manual to


Employee Benefit Security Administration
January 19, 2016
Page 6 of 11

Unum suggests that the Department clarify what constitutes “new evidence.” Unum
believes that “new evidence” should only include truly new evidence such as independent
medical evaluations and functional capacity evaluations as opposed to opinions regarding
existing evidence. Unum also suggests that there only be one level of comment by the claimant
so that when a claimant does respond with a report from the claimant’s doctor, any further
review by the plan’s consulting professional would not be subject to further review and comment
by the claimant. This puts an end to the process while still giving the claimant a chance to
respond to key evidence that was generated for the first time during the claim appeal phase. This
suggestion also clears up some lack of clarity in the current proposal about whether “new
evidence” must be submitted to the claimant piecemeal or whether it must be accumulated and
submitted to the claimant at one time.

The second primary concern with subsection (h)(4)(ii) is one of timing. Unum believes
that, even if the Department adopts Unum’s suggestion of one level of claimant review and
comment, it will be very difficult if not impossible for plans to render a timely benefit
determination. At the very least, the time for rendering a decision should be tolled from the time
the material is sent to the claimant for review until the claimant responds or the deadline for a
response has expired. Unum also suggests that there be a minimum period for the plan to render
a decision once it receives a response from the claimant or the deadline for responding has
expired. For example, if the claimant is provided 30 calendar days to review and respond, then
the plan should be allowed 30 calendar days from the date of receipt of claimant’s response to
render a decision.

Summary of Comments Regarding Proposed Subsection (h)(4)(iii): The current
procedure, which is universal and a result of established case law, is to provide the claimant with
another opportunity to appeal any rationale raised for the first time in an appeal denial letter.
This process works well and accomplishes the purposes stated by the Department. If the
Department determines that this process must take place within the appeal phase rather than as
an additional appeal phase, then the decision period will need to be adjusted accordingly,
including tolling.

Proposed subsection (h)(4)(iii) requires that during the appeal phase of the claim process,
a claimant be given an opportunity to respond to “a new or additional rationale” for denying the
claim. The current practice, resulting largely from case law, is that if an appeal is denied based
on reasons that were not discussed in the initial adverse benefit determination, then the claimant
is given an additional right to appeal the new reason. This actually occurs rarely and this
additional appeal process has worked just fine. The only difference from the proposed
amendment is that the amendment requires this to occur during the appeal phase rather than as
part of a subsequent appeal phase. That raises issues of timing. If the plan intends to rely on a
new or additional reason for affirming the denial, then the time for making the appeal decision
should be tolled from the time the plan submits that reason to the claimant until the claimant
responds or the time for a response has expired. The plan should then have a minimum period of


Employee Benefit Security Administration
January 19, 2016
Page 2 of 11

regulations into line with the procedures applicable to medical claims following enactment of the
ACA. There are a number of reasons why provisions under the ACA that make sense for medical
claims are not appropriate for disability claims given the significant differences in the way
medical and disability benefit claims are reviewed and determined:

e The vast majority of medical claims are determined electronically with little or no human
involvement. This means that medical claims can for the most part be determined almost
instantaneously. Disability claims are almost entirely manual in the sense that they
always require one or more claim reviewers to study extensive file materials and to
consult with varied professionals in medical, vocational, financial, and other disciplines.

¢ Medical claims typically involve only a limited treatment or series of treatments over a
relatively short period of time. Many times medical claims only involve one doctor visit.
The claim determination is a one-time determination. Disability claims require a series of
determinations over a period of several years or even decades. Unlike medical claims,
the information needed to determine disability claims is not isolated to a specific
treatment, but may require the gathering of many months or years of records and
information, including historical information that would not even be relevant to most
medical claims.

e Most medical claims rarely involve a need to consult with outside professionals. The
vast majority of disability claims, on the other hand, require a medical consultation at a
minimum, and many times require consultation with vocational experts. financial
experts, and other professionals.

© Medical claims involve an isolated issue, e.g., whether a particular service is covered by
the health plan. Disability claims involve a more complex, multi-layered analysis, i-e.,
whether there is an impairment, whether the impairment prevents the claimant from
working, whether there is financial loss, etc., each of which requires input from various
sources.

e Even when there is an appeal of an adverse benefit determination, medical claim files
may consist of only a few pages of material. Disability claim files can consist of
hundreds and sometimes thousands of pages of medical, vocational, financial, and other
information, all of which takes immense time to review and render a decision.

b. Increased Administrative Costs

Unum believes that, based on its experience in processing millions of disability benefit
claims, the Department's cost estimates are significantly understated. Increased cost of claims
administration will drive up the cost of disability products and discourage employers from
offering those benefits. Claimants too will be adversely affected by delays occasioned by the
proposals. A few examples of administrative changes that will increase costs are as follows:


@e @
unum 2211 Congress Street

Portland, ME 04122
207 575 2211
unum.com

January 19, 2016

Submitted Electronically

Office of Regulations and Interpretations
Employee Benefit Security Administration
Room N-5666

U.S. Department of Labor

200 Constitution Ave. NW

Washington, DC 20210

Subject: Claims Procedure for Plans Providing Disability Benefits (RIN 1210-AB39)

To Whom it May Concern:

These comments are being submitted on behalf of Unum Group (“Unum”) which through
its insurance subsidiaries is the nation’s largest group disability insurance carrier. Unum and its
insureds are significantly impacted by ERISA disability claims regulation changes. Unum
believes that the current ERISA framework should not mirror Affordable Care Act requirements
for several reasons that are stated below. Additionally, the existing framework for determining
disability benefit claims contains significant consumer protections and provides an effective and
efficient process by which disability claims are adjudicated. Unum’s experience is that litigation
volumes have been declining over the past 10 years and currently are only a tiny fraction of one-
percent of disability claims. We believe that some of the changes proposed would significantly
increase the costs associated with the administrative process and result in a substantial increase
in the volume and costs associated with litigation of ERISA disability claims. Increased costs
will be passed along to consumers who are increasingly faced with pressure on their benefit
dollars. Unum believes that proposals that result in greater costs associated with claims and
litigation are anti-consumer in that fewer working Americans will be able to protect their income
from the inability to work due to accident or sickness.

I. Introduction

a. Distinctions Between Disability and Medical Benefit Claims

One of the stated purposes of the proposed amendments is to bring the disability claim

Unum is a registered trademark and marketing brand of Unum Group and its insuring subsidiaries


Employee Benefits Security Administration
December 11, 2017
Page 2

short, Unum believes that the data presents compelling evidence that the Regulations are unnecessary and
that the current rules provide robust consumer protections that are not enhanced by importing Affordable
Care Act provisions into ERISA disability claims regulations. The data shows that the vast majority of
ERISA disability claims are paid upon initial application; that many of those claims that aren’t paid are
due to reasons other than a determination that a claimant is not disabled; and that meaningful number of
denials are overturned during the appeal process. This data reflects current procedures that are working
as intended, and that the Regulations are a solution to a problem that doesn’t exist.

The data further demonstrates that the proposed Affordable Care Act changes to ERISA Disability Claims
Regulations would result in significant additional costs with no tangible benefit to consumers. The
additional costs from the Regulation (the vast majority of which are recurring) will be borne by
consumers who are increasingly expected to bear a significant and growing share of benefits premiums.
As survey data regarding price elasticity data demonstrates, increased premiums will result in fewer
working Americans protected by ERISA disability income protection plans. In fact, ACLI’s data
indicates that each percentage increase in price will result in a nearly two-fold percentage drop in covered
lives. Working Americans who lose coverage under ERISA disability income protection plans and then
lose the ability to work due to accident or sickness will increasingly fall into federal and state welfare
safety nets, placing additional burdens on these taxpay-funded welfare programs. Group Disability
Income protection plans, offered by employers to protect their employees, make up the overwhelming
majority of ERISA plans impacted by these Regulations, and the cost of the Regulations are high with
little to no corresponding benefits.

Unum appreciates the Department’s current effort to gather, review and analyze data and comments
regarding the ERISA disability claims regulation changes. Unum believes that an appropriate analysis of
the data will lead the Department to conclude that it should not adopt Affordable Care Act requirements
into ERISA Disability Claims Regulations, and that the cost of the proposed Regulations significantly
exceeds any benefits.

Thank you for considering Unum’s input.

Sincerely,

DPsapXd

Gregory J. Breter
Senior Vice President
Unum U.S. Benefits Operations

Attachment: Unum’s Comment Letter to DOL Dated January 19, 2016


Employee Benefit Security Administration
January 19, 2016
Page 11 of 11

f. Implementation Date

Once the proposed regulations are finalized, a 60-day effective date is simply not
realistic. Plans will need to revise claim procedures, policy documents, and train personnel.
When the 2000 regulations were finalized, they went into effect for claims filed on and after
January 1, 2002. Unum suggests that any final regulations should apply to claims filed on or after
a date that is at least one year after publication of the final regulations.

Thank you for considering Unum’s input.

Sincerely,

Gregory J. Breter
Senior Vice President
Unum U.S. Benefits Operations