What to know about one of the DOL’s latest rules

The U.S. Department of Labor (DOL) final rule on disability claims procedures went into effect on April 1, 2018.
by Katie Green, Lead Consultant
Here’s a quick look at the new DOL rule and how it might affect your employee benefit plan.

Background: The DOL is always looking for ways to improve benefit plans offered to American employees. When the DOL creates a new rule, it makes a new procedure or option that will better protect people who participate in employee benefit plans.

Key takeaways: This rule gives U.S. workers more protection around disability benefit claims and how a denied claim is to be handled by a plan fiduciary or insurance provider.

  • The new procedures require that the person making the claim should receive a clear explanation about why it was denied, and information about their rights and procedures to appeal.
  • The rule also states that whoever investigates the claim and determines its validity cannot be compensated based on denying claims.
  • All employee benefit plans, including 401(k) plans, that are covered by the Employee Retirement Income Security Act of 1974 (ERISA) must comply with the new rule.
  • ERISA employee retirement plans required an amendment to include this new rule by April 1, 2018.

 

Adopting the new rule: Most service providers made this amendment very easy for plan sponsors to adopt. If you have not received information regarding this amendment’s addition to your retirement plan, contact your plan service provider to make sure all steps have been taken to comply.

 

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