A federal rule revising the ERISA regulations on disability claims procedures went into effect on April 1, 2018. These changes primarily impact insurance carriers’ internal procedures. Many carriers made the changes entirely internally without any need to formally communicate changes to employers or plan participants.
For example, the new regulations require that adverse benefit determinations be written in a culturally and linguistically appropriate manner. Carriers are not required to state this change in the policy, but would need to adjust internal procedures to ensure the statement is included when applicable.
However, to implement certain other changes, some carriers have had to issue policy amendments. For example, determination notices are now required to include the precise policy rule that was relied upon for the denial. If the existing policy stated that this information would be provided upon request, an amendment may be necessary to state that it will now be provided with the determination notice.
Carriers are only issuing policy amendments or addendums if they are necessary and many plans will not need one. If you receive a Summary of Material Modifications (SMM) or similar amendment for your insured disability plan, you can distribute it to your plan participants in the same manner you distribute other plan materials (e.g., post on benefits intranet). A short cover memo may help participants understand why they are receiving the SMM by simply stating that there was a DOL update to the disability claims procedures regulations.
ERISA requires that any SMM generally must be furnished to plan participants within 210 days after the end of the plan year for which the change was adopted.
Please contact your Keller account team if you received an amendment and have questions.