Disability advocates urge support for ERISA reforms

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Green letters C C D, Consortium for Citizens with Disabilities

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The Consortium for Citizens with Disabilities, in public comments [PDF] submitted to the Department of Labor on January 19, urged strong support for a recently introduced proposal to expand due process protections for employees in claims for disability benefits in private insurance plans.

“The claims and appeals process in disability insurance claims is opaque and claimants often don’t understand why the initial decision to deny their claim was made, what evidence they need to submit on appeal, when evidence has to be submitted by in order to be considered, or what evidence the insurer relied upon to deny the claim on appeal,” the CCD states in the letter. “The undersigned organizations believe that the updates…are necessary to ensure transparency in the claims and appeals process and to ensure that insured individuals get a full and fair review of their claim…”

The Employee Retirement Income Security Act, passed by Congress in 1974, provides minimum standards for private employer pensions and disability insurance plans. On November 18, the Obama Administration released proposed regulations, seeking to bring the standards for disability benefits in line with new protections under the Affordable Care Act for individuals in group health care plans.

Under ERISA, employees must first appeal disability benefit denials to their insurance companies’ internal review boards, many of which are run by companies under contract with the insurance companies. Traditionally, courts are highly deferential to insurance company decisions.

The proposal seeks to counteract these inherent conflicts of interest, specifically by barring payment and personnel policies that incentivize benefit denials, including those with doctors hired to review employee claims. The regulations require further transparency in the process, specifically by requiring insurers to fully explain benefit denials and by forcing them to disclose evidence contrary to employee’s claims, among other proposals.

Moreover, the regulations include new requirements for insurers to make benefit denials “culturally and linguistically” appropriate. The CCD argues that this section of the proposal “does not go far enough,” suggesting a lower threshold for when insurers must make benefit denials in non-English languages and to also require cultural and linguistic standards for other “vital documents.”

“Even though fewer private-sector employees participate in disability plans than in other types of plans, disability cases dominate the ERISA litigation landscape today,” the DOL wrote in the proposal. ” An aging American workforce may likely be a contributing factor to the significant volume of disability cases. Aging workers initiate more disability claims, as the prevalence of disability increases with age. And as a result, insurers and plans looking to contain disability benefit costs are often motivated to aggressively dispute disability claims.

“This aggressive posture coupled with the inherently factual nature of disability claims highlight for the Department the need to review and strengthen the procedural rules governing the adjudication of disability benefit claims.”

The CCD’s comments are signed by 22 disability rights organizations, including the National Disability Rights Network.

Disability Rights Washington, the publisher of Rooted in Rights, is the designated protection and advocacy agency in Washington, and a member of the National Disability Rights Network.