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 am an attorney who represents claimants with long-term disability claims. In my practice, 

I represent individuals who need help navigating the claims and appeals process before insurance 

companies and third party administrators of self-funded disability plans. I also litigate disability 

claims subject to ERISA on behalf of individual participants and beneficiaries. 

I believe that it is important that the Department implement 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. The 

regulations as promulgated last year were the result of a reasoned, measured and transparent 

process. The result of that process, if the regulatory changes are implemented, would be merely 

clarifying required safeguards that have already been established through the federal courts body 

of ERISA common law. 

The industry’s concerns about costs have been addressed by the Department already when 

it previously concluded, after taking into consideration the industry’s comments on the proposed 

rules, that if there are associated costs to the new regulations the costs simply do not outweigh the 

tremendous benefits. I agree with the Department’s assessment, that the benefits outweigh the 

costs. 

The U.S. Supreme Court has described the purpose of ERISA is to provide a claims 

determination process that meets “higher-than-marketplace standards” MetLife v. Glenn, 554 

U.S. 105, 115 (2008). These regulations are a modest step towards ensuring that those standards 

are achieved. 

In particular, one of the new rules requires a Plan to discuss any basis for disagreement 

with Social Security Decisions. This is a matter of fundamental fairness and can’t possibly add to 
the cost of providing disability benefits as the industry has argued in its comments to the 

Department. The fact is that disability plans subject to ERISA, with almost no exceptions, contain 

provisions that reduce the ERISA disability benefits by any amount of social security disability 

benefits. Most ERISA disability plans often contain provisions where the ERISA benefits will be 

reduced by Social Security Disability benefits regardless of whether the Social Security benefits 

are actually received. For example, below is actual language from a long term disability insurance 

contract provided by CIGNA: 

The Insurance Company will assume the employee (and his or her dependents, 

if applicable) are receiving benefits for which they are eligible from Other 

Income Benefits. The Insurance Company will reduce the Employee’s 

Disability Benefits by the amount from Other Income Benefits it estimates are 

payable to the Employee and his or her dependents. 

The industry routinely dedicates resources to determine a claimant’s potential eligibility 

for Social Security Disability benefits. Requiring an explanation as to how a Social Security 

determination interplays with eligibility for ERISA disability benefits is simply a matter of 

fundamental fairness that should not add cost to ERISA plans. These Plans take enormous 

advantage of a system that allows them to reduce employer provided benefits by a claimant’s 

entitlement to Social Security benefits. If these Plans are allowed to assume that a claimant is 

disabled under Social Security’s rules while at the same time denying a claimant disability benefits 

under an employer based plan, it is a minimal requirement to require the Plan to simply explain 

why its conclusion differs from that of the Social Security Administration. 

In addition, the rule that provides claimants the right to review and respond to new 

evidence or rationales before a final decision is made is wholly consistent with the goals of 

ERISA. In fact, Courts routinely hold that ERISA and its accompanying regulations call for a 

“meaningful dialogue between the plan administrators and their beneficiaries.” Booton v. 

Lockheed Med. Benefit Plan, 110 F.3d 1461, 1463 (9th Cir.1997); Abram v. Cargill, Inc., 395 

F.3d 882, 886 (8th Cir. 2005). 

Unfortunately, since ERISA cases are decided on a closed record, denying claimants the 

opportunity to respond to new evidence created by an insurance company on appeal means that 

the record submitted to a reviewing court is incomplete. This is not a meaningful dialogue and is 

the opposite of a full and fair review. It is essential that this rule is implemented. 

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. These assertions do not ring 

true. 

In fact, the Department can rely upon information supplied by its own Bureau of Labor 

Statistics. Employer-based disability insurance has increased, not decreased, between 1999 and 

2014 according to the Bureau of Labor Statistics. https://www.bls.gov/opub/btn/volume4/disability-insurance-plans.htm. In that time, new regulations were added in 2000 and 

numerous states added laws banning discretionary clauses which affected these plans. What this 

increase shows that regulatory and statutory changes increasing consumer protections for ERISA 

claimant’s increases employers’ willingness to provide this benefit to employers. That is 
because employers are interested in providing meaningful disability insurance benefits to their 

employees. The safeguards ensuring a full and fair review of claims that these new rules would 

put in place through regulation provide value to the employers who purchase this coverage by 

ensuring that it is not illusory coverage, but provides disabled employees with a fair system that 

provides actual benefits in an efficient and cost effective way. 

It should also be noted that employers continued to buy an increased amount of disability 

insurance for their workers during a time when two of the largest insurers, UNUM and CIGNA, 

were fined by state departments of insurance and were parties to Regulatory Settlement 

Agreements. 

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. 

These are two instances where States enforced fair claims practices on ERISA disability 

insurance providers who were found to be violating claimants’ rights. What the statistics show are 

that these type of regulatory enforcements make disability insurance a more valuable product for 

employers and they are more willing to provide these benefits if the benefits are administered 

through a fair process governed by strong regulations. The benefits of making sure that there are 

rules protecting claimants and that those rules are enforced, clearly outweigh any costs associated 

with complying with these rules. 

I would urge the Department to implement the regulations. 

Very truly yours, 

Matthew R. Davis