On Friday the U.S. Department of Labor today announced a 90-day delay – from January 1 to April 1, 2018 – of the applicability date for ERISA plans to comply with the December 16, 2016, “Final Rule” amending the claims procedure requirements applicable to disability benefits. As explained below, further delay of the applicability date beyond April 1 is not out of the question. The official notice will be published in the Federal Register on November 29, 2017, but an unofficial version can be reviewed here.
According to a press release issued by the DOL:
. . . [T]he delay of the applicability date announced is intended to give interested stakeholders the
opportunity to submit, and for the Department to consider, data and information related to concerns
by some insurance industry and employer groups, and some members of Congress, that the claims
procedure amendments will drive up disability benefit plan costs, cause an increase in litigation and,
in so doing, impair workers’ access to disability insurance benefits.
The DOL published a notice in the Federal Register on Oct. 12, 2017, seeking comments on the proposed 90-day delay of the applicability date of the Final Rule. That comment period ended on October 27 and on November 24 the DOL announced its adoption of the delay. Also on October 12 the DOL also asked for comments that “provide data and information germane to a re-examination of the merits of repealing, replacing, modifying, or retaining the rule.” That comment period ends on Dec. 11, 2017. Comments can be submitted by clicking on the “Comment Now!” button at this link.
The 108 public comments in support of and in opposition to the 90-day delay can be reviewed here. Some of the commenters expressed concern that a 90-day delay was not sufficient to allow the DOL to review and consider all data and comments submitted regarding whether any changes (other than the delay) should be made to the Final Rule. According to the DOL, however:
. . . [V]arious stakeholders made a commitment to provide such data and information to the
Department. . . . If the Department receives such supporting data and information, the Department
will provide interested stakeholders with a reasonable opportunity for notice and comment on that
data and information. Only at that point would the Department be in a position to seriously consider
any further delay of some or all of the requirements of the Final Rule beyond April 1, 2018.
We will continue to watch for developments regarding this subject. However, it took the DOL over four weeks to determine whether to extend the applicability date for 90 days. Given the more substantive issues now pending regarding the Final Rule and the comment closure date of December 11, it is unlikely that the DOL will make any significant announcements no sooner than late January 2018 at best.
What is Matrix Doing? At Matrix we have been working diligently to prepare for the new rules. Regardless of the outcome of the DOL review, Matrix will be ready to administer our clients’ disability plans in compliance with the new regulations by April 1, 2018, or other new effective date. To this end, we have assembled a task force of experts in disability plans, claims handling procedures, ERISA, and customer service. Our practice leaders and account managers will keep clients, producers, and others apprised of our work during the lead-up to the effective date – whatever it is! If you have questions in the meantime, contact your account manager or sales representative, or send us an email at email@example.com.