October 19, 2019

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Final Rule on Disability Claims under Welfare and Retirement Plans Effective April 1

After some speculation about a delay in implementation of the final rules on claims adjudication of disability claims under welfare and retirement plans (the Final Rule), the US Department of Labor (DOL) confirmed that the Final Rule will be applicable beginning April 1, 2018. McDermott’s article detailing the new requirements in the Final Rule can be found here. A disability welfare or retirement benefit claim, as well as claims under certain executive compensation arrangements, severance plans and other payment plans subject to ERISA’s claims procedures, will be subject to the Final Rule if the benefit is conditioned upon a claimant’s disability, and the claims adjudicator must make a determination of disability in order to decide the claim. However, if a plan links the finding of disability to a determination made by a party other than the plan (e.g., a finding made under the employer’s long-term disability plan or a determination of disability made by the Social Security Administration), then the special rules for disability claims are not applicable to a claim for benefits under such plan.

Plan sponsors and administrators should review retirement, welfare, executive compensation and severance plans to determine whether such benefits are subject to the Final Rule’s additional requirements. Any language detailing claim procedures in plan documents and summary plan descriptions should be updated, and disability claim and appeal administrative practices and procedures, as well as disability claim and appeal notices should be revised to comply with the Final Rule.

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About this Author

Megan Mardy Attorney McDermott Will Emery
Associate

Megan Mardy is an associate in the law firm of McDermott Will & Emery LLP and is based in the Firm's Chicago office.  Megan focuses her practice primarily on designing, amending and administering 401(k) plans, profit sharing plans, pension plans, cafeteria plans and welfare benefit plans.  She also has experience counseling clients regarding compliance with HIPAA, the Affordable Care Act, and other federal laws affecting group health plans.  Megan has counseled privately and publicly-held corporations and tax-exempt entities regarding fiduciary issues under ERISA, employee benefits...

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