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January 19, 2016

Submitted electronically to

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

Attn: Claims Procedure Regulation Amendment for Plans Providing Disability Benefits

Re: RIN 1210-AB39

 

The Pension Rights Center is a nonprofit consumer organization that has been working since 

1976 to protect and promote the retirement security of American workers, retirees and their 

families. The Center applauds the Department of Labor for proposing additional procedural

protections for participants making claims for disability benefits from employee benefit plans. 

Disability claims can be highly technical and contentious. The Affordable Care Act increased 

the procedural protections of the internal claims and appeals procedures for participants in group 

health plans. The proposed amendment will apply those added protections, with some 

modifications, to disability claims.

New procedural protections

The proposed amendment provides added transparency to the claims and appeals process that 

will help claimants to understand a benefit denial and to determine whether an appeal is 

appropriate. For initial claims that are denied in whole or in part, the proposal requires a 

discussion of the decision to deny, including reasons for disagreeing with a Social Security 

determination or disability decision by a third party. Importantly, an initial claim denial must 

include any internal rules or criteria that were used to deny the claim and a notice that the 

claimant can request, free of charge, all relevant documents.

Claimants appealing an initial claim denial must be given any new or additional evidence 

considered by the plan during the appeal process. Additionally, claimants must be given a 

reasonable opportunity to respond to the new evidence. 

The proposed amendment includes new criteria for avoiding conflicts of interest by persons who

decide disability claims. Employment decisions, such as hiring, promotions, and bonuses, 

cannot be based on the frequency of disability claim denials. 

A claimant will be deemed to have exhausted the plan’s administrative remedies if a plan fails to 

establish or strictly follow the claims procedures rules. A de minimis exception applies. If a
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claimant chooses to proceed to court under deemed exhaustion, the claim must be reviewed

de novo, without deference to the plan’s decision, regardless of the plan’s stated standard of 

review. 

The definition of a claim denial will be expanded to include a rescission of coverage, a 

retroactive cancellation or discontinuance of coverage, even if the participant is not receiving 

benefits. 

Notices must be provided in a culturally and linguistically appropriate manner.

The Pension Rights Center supports this proposed amendment to the disability claim regulations 

to provide additional participant protections to the internal claims and appeals procedures for 

disability claimants. 

Statute of limitations

The Labor Department asks whether plans should be required to give participants a clear and 

prominent statement of any applicable contractual limitations on the period of time for filing a 

suit in court following a final benefit denial. We believe such a notice is essential to permit 

claimants to make a reasonable, fully informed decision as to whether to proceed further with a 

denied claim. Moreover, a “clear and prominent” requirement will ensure that participants do 

not proceed lacking this significant information about their rights.

Additional comments

The Pension Rights Center encourages the Labor Department to also revise the internal claims 

and appeals procedures applicable to pension plans. In 2000 the Labor Department revised the 

Claims Procedure Rules to provide additional and substantial procedural protections for 

participants in group health and disability plans. The Affordable Care Act of 2010 created new 

protections for participants in group health plans. This amendment to the claims rules will add 

those procedural protections to disability plans. However, the claims rules applicable to pension 

plans are still the original rules written in 1977. 

Pension plan claimants would greatly benefit from many of the additional procedural protections 

that have been added for claimants in group health and disability plans. Of course, some 

participant protections written for health and disability claims would not be pertinent to pension 

plans, but there are a number of areas where enhanced procedural protections will benefit

pension plan participants and improve the transparency of the pension claims process.

In particular, pension claimants would benefit from the full range of disclosures available under 

health and disability claims. Specifically, access to their complete claims file would help 

pension claimants who question the calculation of their benefit amounts. Claimants who 

disagree with their benefit calculation can then decide whether to make an appeal. The appeals 

process applicable to health and disability claims should be applied to pension claims, including 

rules pertaining to standards of review, timing of appeals, number of permitted appeals, rules for 
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arbitration of claims, and the right to proceed to court under “deemed exhaustion” of 

administrative remedies. 

Additionally, pension claims rules should address the issue of recoupments, the recovery of 

overpayments made to participants. We encourage the Labor Department to clarify that a 

recoupment action is a partial denial of benefits that can be appealed under a plan’s internal 

claims and appeals procedures for benefit claims. Thus, a recoupment action should trigger all 

of the notice, disclosure and appeal rights afforded to claimants under Section 503 of ERISA. 

We appreciate this opportunity to comment on the vitally important additions to the procedural 

protections for participants making disability claims.

Sincerely,

Jane T. Smith

Policy Analyst