A claims procedure can be undermined before the first file is opened if personnel incentives favor rejection. The Labor Department’s December 19, 2016 disability rule targets that mechanism: decisions about hiring, compensation, promotion, termination and similar matters must not depend on an individual’s likelihood of supporting benefit denials. The requirement includes claims adjudicators and medical or vocational experts. [2016-30070]
This is a constraint on decision-making incentives, not evidence that a particular administrator has acted improperly. It concerns disability claims in Title I ERISA plans where the plan adjudicates disability. A plan that simply relies on an outside disability determination is not handling a disability claim under that special classification. Social Security eligibility is a separate question. [2016-30070]
The November 18, 2015 proposal placed impartiality alongside information access: claimants would see their file and receive new evidence or reasoning early enough to answer. That combination explains the economic logic of the intervention. Restricting denial-oriented incentives addresses who makes the decision; disclosure addresses what the other participant can know. The final rule develops those procedural safeguards within the same rulemaking chain. [2015-29295][2016-30070]
The announced schedule distinguished January 18, 2017 effectiveness from January 1, 2018 applicability to filed claims, with specified transition rules for January 18 through December 31, 2017. Viewed on December 26, the mechanism is established on paper, not tested by these sources. It supplies neither an estimate of administrative savings nor proof of unbiased decisions, larger payouts or successful litigation. [2016-30070]
Source documents
- Claims Procedure for Plans Providing Disability Benefitshttps://www.govinfo.gov/content/pkg/FR-2016-12-19/html/2016-30070.htm
- Claims Procedure for Plans Providing Disability Benefitshttps://www.govinfo.gov/content/pkg/FR-2015-11-18/html/2015-29295.htm