October 26, 2017

Submitted 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

Re: Claims Procedure for Plans Providing Disability Benefits 

Re-Examination [RIN 1210-AB39]

Ladies and Gentlemen:

AARP1 appreciates the opportunity to comment on the Department of Labor’s 

(the Department) proposed regulation re-examining the revised claims procedure for 

plans providing disability benefits. On behalf of our nearly 38 million members, we have 

a strong interest in ensuring that participants and beneficiaries receive the benefits to 

which they are entitled. In order to do so, participants must be able to successfully 

access and resolve benefits disputes through ERISA’s claims procedures. Without 

meaningful access, participants cannot adequately protect their claims to benefits, 

which may spell the difference between independence and impoverishment in their old 

age.2

 

1 AARP is the nation’s largest nonprofit, nonpartisan organization dedicated to empowering 

Americans 50 and older to choose how they live as they age. With nearly 38 million members 

and offices in every state, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands, 

AARP works to strengthen communities and advocate for what matters most to families with a 

focus on health security, financial stability and personal fulfillment.

2 We know that, as workers age, disability rates increase. Persons With A Disability: Labor 

Force Characteristics – 2016, 2 (June 21, 2017), goo.gl/t6X6BW. For example, with $832 as the 

median weekly earning of a fulltime worker, see U. S. Dep’t of Labor, Labor Force Statistics 

from the Current Population Survey: Table 37, Bureau of Labor Statistics (last modified Feb. 8, 

2017), goo.gl/MK6AgD, and a replacement percentage of sixty percent, see America’s Health 

Ins. Plans (AHIP), An Employer’s Guide to Disability Income Insurance 9 (2007), 

goo.gl/E5mvCy, a disability claimant would receive the modest amount of approximately $499

per week.
AARP Comments on 

 Claims Procedure for Disability Plans Re-Examination 

October 27, 2017

Page 2 of 4

For the reasons below, AARP urges that the applicability date of the Final 

regulation on Claims Procedure for Plans Providing Disability Benefits, 81 Fed. Reg. 

92316 (Dec. 19, 2016), should not be delayed.

Transparency During The Rulemaking Process Permits The Public To Provide 

Useful Analysis To The Agency. 

Prior to the issuance of the Claims Procedure for Plans Providing Disability 

Benefits, 81 Fed. Reg. 92316 (Dec. 19, 2016), it had been over fifteen years since the 

claims procedure was updated for disability plans. During that regulatory process, the 

Department of Labor requested various information that disability insurers and other 

stakeholders admitted that they did not possess and did not provide. These 

stakeholders had many opportunities to provide data and input supporting any issues 

and concerns on cost and other issues raised by the revised regulations. Indeed, 288 

comments were filed with the Department concerning this rule showing extensive 

participation in the rulemaking process, including from individuals. In accordance with 

the industry’s request to provide it with adequate time to comply, the rule became 

effective on January 18, 2017, but is not applicable until January 1, 2018.

Subsequently, insurers alleged, without public evidence, that the final disability 

regulation would add significant costs. Indeed, the insurers have stated that the 

information “could be developed.” Thus, the Department appears to be relying on 

unsubstantiated assertions and non-public information to consider delaying this due 

process regulation. 

It is difficult to comment substantively on either the delay of the applicability date 

of the claims regulation or the request for information because the materials upon which 

the Department is relying are not public. Diligent searches have not found either the 

letters or the survey cited on the Department’s website or the writers’ websites. 

Consequently, by separate letter, AARP has requested these documents. In addition, 

AARP has filed a FOIA request, although the chances of a response before the due 

date of December 11, 2017 for the comments are doubtful given that the EBSA has a 

backlog of 173 requests. The proposed regulation for the delay of the applicability date 

does not specify the exact nature of the information causing the reconsideration and 

why the information was not provided to the Department for evaluation during the 

comment period.

The importance of being able to comment on these letters and surveys cannot be 

overstated. For example, in 2005, AHIP engaged Milliman, Inc., a consulting firm, to 

analyze the actuarial impact of the disability income policy language changes that the 

California Department of Insurance had proposed. See Robert W. Beal, FSA, MAAA & 

Daniel D. Skwire, FSA, MAAA, Milliman, Inc., Impact of Disability Insurance Policy 

Mandates Proposed by the California Department of Insurance 1 (Nov. 14, 2005), 

goo.gl/5WvRgY. One of the changes was to prohibit the use of discretionary clauses in 
AARP Comments on 

 Claims Procedure for Disability Plans Re-Examination 

October 27, 2017

Page 3 of 4

disability insurance contracts. Milliman estimated that the prohibition would increase 

premiums between 3% and 4%. Id. at 8. One of the assumptions that Milliman used was 

that litigation over claims under group insurance policies would be handled in the same

way as individual insurance policies. Id. at 9. However, claims brought under ERISAgroup policies are not eligible for punitive or other types of compensatory damages. 

Moreover, claimants are not permitted to obtain a jury trial to adjudicate their claims. 

These underlying incorrect assumptions clearly resulted in a miscalculation and 

overestimation of the increased costs. The analysis that AARP performed was essential 

to the CA DOI’s final proposal.

Indeed, the 2005 report estimated that all of the changes that the California 

Department of Insurance proposed would increase premiums between 28% to 46% for 

group insurance policies. See Robert W. Beal, FSA, MAAA & Daniel D. Skwire, FSA, 

MAAA, Milliman, Inc., Impact of Disability Insurance Policy Mandates Proposed by the 

California Department of Insurance 19 (Nov. 14, 2005), goo.gl/5WvRgY. AARP has 

searched to determine if these increases actually occurred, but has been unable to find 

any follow-up reports; we note the absence of any news articles after adoption of most 

of the proposals, indicating the increases were not as great as estimated. The 

Department can ask AHIP for specific information on any premium increases for 

California disability insurance policies since 2005 to determine how accurate their 

estimates were. The difference between the estimates and the actual increases may 

have implications for the accuracy of any “survey” or information provided to the 

Department on increased costs. In any event, this example demonstrates the necessity 

of transparency during the rulemaking process. 

The Administrative Procedure Act Requires The Department To Disclose The 

Documents And Information It Is Relying On When Developing A Regulation To 

Prevent Prejudice To The Public.

As Secretary Acosta so eloquently noted, the “rule of law” including the 

Administrative Procedure Act must be followed so all Americans’ views can be heard. A. 

Acosta, Op-Ed, Deregulators Must Follow the Law, So Regulators Will Too, WALL ST. J.,

May 22, 2017, goo.gl/SSBqfH.

Section 553 of the APA requires that an agency give notice of a proposed rule 

setting forth "either the terms or substance of the proposed rule or a description of the 

subjects and issues involved," 5 U.S.C. § 553(b), and "give interested persons an 

opportunity to participate in the rule making through submission of written data, views, 

or arguments with or without opportunity for oral presentation," id. § 553(c). Among the 

information that must be revealed for public evaluation are the "technical studies and 

data" upon which the agency relies. See Chamber of Commerce of the United States v. 

SEC, 443 F.3d 890, 899 (D.C. Cir. 2006); Solite Corp. v. EPA, 952 F.2d 473, 484 (D.C. 

Cir. 1991).
AARP Comments on 

 Claims Procedure for Disability Plans Re-Examination 

October 27, 2017

Page 4 of 4

An agency commits serious procedural error when it fails to reveal portions of the 

technical basis for a proposed rule in time to allow for meaningful commentary. See 

Owner-Operator Indep. Drivers Ass'n v. Fed. Motor Carrier Safety Admin., 494 F.3d 

188, 199 (D.C. Cir. 2007); Chamber of Commerce v. SEC, 443 F.3d at 899; Solite 

Corp. v. EPA, 952 F.2d at 484; see also Air Transp. Ass'n of Am. v. FAA, 169 F.3d 1, 7 

(D.C. Cir. 1999) ("'[T]he most critical factual material that is used to support the 

agency's position on review must have been made public in the proceeding and 

exposed to refutation.'"]. 

Here, the Department has not explained why these particular “confidential” 

surveys or letters are trustworthy or confirmed that the “confidential” survey is so 

reliable or ubiquitous that the procedural requirements for comment should be relaxed 

when these materials serve as the critical data on which the Department relies to reassess the costs of implementing the claims regulation. See Chamber of Commerce of 

the United States v. SEC, 443 F.3d at 906 (citations omitted). 

Without the transparency required by the APA, AARP will be prejudiced in its 

ability to review and comment on the letters and “confidential” survey relied upon in the 

proposed regulation to delay and re-examine the Final Regulation on Claims Procedure 

for Plans Providing Disability Benefits, 81 Fed. Reg. 92316 (Dec. 19, 2016). The ability 

to comment on these letters and surveys is critical, as the example above establishes.

AARP appreciates this opportunity to state that it opposes any delay in the 

applicability date of the disability claims regulation. If you have any questions, please feel 

free to contact Michele Varnhagen of our Government Affairs office at 202-434-3829. 

Sincerely,

David Certner

Legislative Counsel and

Legislative Policy Director

Government Affairs