DOL's New Rules on ERISA Claims Procedure for Disability Benefits

Plans Subject to the Final Rule

The final rule applies to plans (either welfare or retirement) where the plan conditions the availability of disability benefits to the claimant upon a showing of disability. For example, if a claims adjudicator must make a determination of disability in order to decide a claim, the plan is subject to the final rule. Generally, this would include benefits under a long-term disability plan a short-term disability plan or a workman's compensation plan to the extent that it is governed by ERISA. However, the following short-term disability benefits are not subject to ERISA and, therefore, are not subject to the final rule:

• Short-term disability benefits they are paid pursuant to an employer's payroll practices (e., paid out of the employer's general assets on a self-insured basis with no employee contributions); and
• Short-term disability benefits that are paid pursuant to an insurance policy maintained solely to comply with a state-mandated disability law (for example, in California, New Jersey, New York, and Rhode Island).

In addition, if benefits are conditioned on a finding of a disability made by a third party other than the plan itself (such as the Social Security Administration or insurer/third-party administrator of the employer's long-term disability plan), then a claim for such benefits is not treated as a disability claim and is also not subject to the final rule. For example, if a retirement plan's determination of disability is conditioned on the determination of disability under the plan sponsor's long-term disability plan, then the retirement plan is not subject to the final rule (but the final rule would apply to the underlying long-term disability plan).