October 12, 2017

DOL Proposes Delaying January 2018 Applicability Date of Disability Claims Regulation

On October 10, 2017, the Department of Labor (DOL) issued proposed regulations (published in the October 12, 2017 Federal Register) delaying the applicability date of the final disability claims regulation. The changes made by the final regulation are currently scheduled to apply to disability claims made on or after January 1, 2018. The proposal would delay the applicability date to April 1, 2018. The final disability claims regulation revises the rules governing pension plan processing of claims and appeals for disability benefits, by adding new disclosures and a related procedural change. (For a summary of the final regulation, see Sibson’s June 6, 2016 Update, “Final Rule Regarding Disability Claims and Appeals.”)

The proposal asks for comments by October 27, 2017 as to whether the applicability date should be delayed until April 1, 2018. It also asks for data and comments by December 11, 2017 as to whether the applicability date should be further delayed or the regulation withdrawn.

The proposal states the DOL decided to review the regulation in accordance with President Donald Trump’s issuance of Executive Order 13777, which directed federal agencies to review regulation for costs and benefits. According to the proposal, the DOL had only limited cost and benefit data when it issued the regulation. Employers and other plan sponsors have offered to work with the DOL to help the DOL obtain new data that would allow the department to fully quantify and evaluate the costs and benefits.

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