New ERISA Disability Claims Regulations Take Effect: Part I

By Norris A. Adams II
and Caitlin H. Walton

This is the first installment of our three-part series on ERISA’s new disability claim-processing procedures. Here we will focus on the background leading up to the implementation of the new regulations.

Not all days are created equal. Some just seem to soak up more glory than others. This year, for example, Dec. 10 is the First Sunday of Advent, the start of Hanukkah, International Day for the Abolition of Slavery, and Dewey Decimal System Day (if you’re under 30, we’ll wait while you look that last one up). Personally, we’re looking forward to National Talk Like a Pirate Day on Sept. 19.

But no day improved its stock more this year than April 1, making up for its past irrelevance with Easter, the second day of Passover, and, of course, April Fool’s Day. If that weren’t enough, it’s rent day too.

But for ERISA advocates across the country, there was another reason to celebrate April 1 this year: the U.S. Department of Labor’s (“DOL”) new ERISA claim regulations governing disability benefit determinations, 81 Fed. Reg.  92316 (“the Final Rule”), went into effect.


The Final Rule is a long overdue upgrade to ERISA’s claim-processing regulations that strengthens procedural protections and safeguards for private-sector employees making disability benefit claims. It amends the DOL’s current claims procedure regulation at 29 C.F.R. §2560.503-1, last amended in 2000, to strengthen the rules applicable to disability benefit claims consistent with changes made to group health benefits claims pursuant to the Affordable Care Act (“ACA”). And while the Final Rule specifically applies to disability benefit claims, the DOL has made it clear that it also applies to 401(k) and pension plans where those benefits are conditioned upon the claimant’s disability status.

We’ll summarize the actual changes to the regulations in parts two and three of this series, but first, a brief history of the rocky steps it took us to get to April 1 is in order.

On Nov. 18, 2015, the DOL announced its Initial Proposal, giving notice of its proposed revisions to ERISA’s disability regulations and seeking public comment. 145 comment letters were submitted through the DOL’s public comment portal from plan participants, consumer groups, plan sponsors, insurers, employer groups, trade groups, and attorneys that handle ERISA claims on both sides of the v. Thereafter, on Dec. 16, 2016, the DOL announced that it was releasing the Final Rule, taking into account the comments submitted. The Final Rule was given an effective date of Jan. 18, 2017 and made applicable to claims filed after January 1, 2018.

On Feb. 24, 2017, however, newly elected President Trump issued Executive Order 13777, directing federal agencies to undertake specified actions, including evaluating existing regulations and making recommendations as to whether they can be “repealed, replaced, or modified” to “reduce the regulatory burdens agencies place on the American people.” Seizing on this opportunity, a group of insurance companies, trade associations, and other insurance industry representatives, unhappy with the new protections provided for disabled American workers, asserted that “the Final Rule will drive up disability benefit plan costs, cause an increase in litigation, and consequently impair workers’ access to disability insurance protections.” These stakeholders also secured the support of several members of Congress who presented similar concerns in a letter addressed to the Secretary of Labor.

On Oct. 12, 2017, the DOL proposed a 90-day delay of the regulation applicability date and again sought comments. Following the public comment period, on Nov. 29, 2017, the DOL announced that it was indeed implementing the 90-day delay of the regulation effective date from Jan. 1, 2018 to April 1, 2018 to allow the certain stakeholders to provide the cost and other data promised. In so doing, the DOL again sought public comment on the merits of rescinding, modifying, or retaining the Final Rule. During this process, 207 additional public comment letters were submitted to the DOL from Oct.12, 2017 to Dec. 11, 2017.

At long last, on Jan. 5, 2018, the DOL announced that there would be no further delay and the Final Rule was going into effect without any additional changes on April 1, 2018. In its news release, the DOL stated that it “received approximately 200 comment letters from the insurance industry, employer groups, consumer advocates, and lawyers representing disability benefit claimants,” but only a few “responded substantively to the Department’s request for quantitative data to support assertions that the final rule would drive up disability benefit plan costs by more than the Department had predicted, cause an increase in litigation, and consequently reduce workers’ access to disability insurance protections.” As such, the DOL concluded that the information it received during the delay period did not justify modifying or rescinding the Final Rule.

And with that, as of April 1, 2018, new and improved protections are in place for disabled employees.

In Part Two, we’ll share our view of the five most significant changes to the disability regulations.

Norris Adams joined Essex Richards in 2005, following a federal clerkship in the Eastern District of Virginia. He is a graduate of Campbell University and Wake Forest School of Law. His practice centers on ERISA litigation and employee benefits.

Caitlin Walton joined Essex Richards in 2015, following an internship with the firm. She is a graduate of East Carolina University and Wake Forest School of Law. Caitlin’s practice centers on ERISA litigation and employee benefits.