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New ERISA Disability Claim Regulations – Part 4by Andrew Whiteman

New ERISA Disability Claim Regulations – Part 4

On April 1, 2018, a new disability claim regulation came into effect. The regulation was promulgated by the United States Department of Labor (referred to herein as “DOL”) under the authority of the Employee Retirement Income Security Act of 1974 (“ERISA”) and applies to all employee benefit plans that provide disability benefits.

This is the fourth in a series of nine blog posts that will summarize important features of the new regulation. The new regulation amended existing regulation in the following eight areas:

  1. Conflicts of interest involving claims adjudicators and medical and vocational consultants.
  2. Additional disclosures required with denial notices.
  3. Disclosure of plan criteria.
  4. Requires notifications to be made in a “culturally and linguistically-appropriate manner.”
  5. Disclosure of new evidence and new rationales prior to denial on review.
  6. Disclosure of contractual limitations period deadline.
  7. Enhanced remedy for a plan’s violation of the regulation.
  8. Expansion of the definition of “adverse benefit determination.”

The last blog post discussed the requirement that plans disclose additional information in their denial notices. The following will discuss the third change to the regulation – the requirement that plans disclose “specific internal rules, guidelines, protocols, standards or other similar criteria” the plan relied upon in making the adverse benefit determination or provide a statement that such rules, guidelines, etc. do not exist.

I.     Summary of the Changes to the 503 Regulation

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C.     Disclosure of Plan Criteria

1.     The Rule

A plan’s adverse benefit notifications must set forth:

Either the specific internal rules, guidelines, protocols, standards or other similar criteria of the plan relied upon in making the adverse determination or, alternatively, a statement that such rules, guidelines, protocols, standards or other similar criteria of the plan do not exist.[1]

2.     DOL Comments

Plans may not refuse to disclose internal rules, guidelines, protocols, standards or other similar criteria on the basis that such material is confidential or proprietary.[2] The DOL does not believe that disclosure of such material would be unduly burdensome because “[e]ven under the existing claims procedure regulation, internal rules, guidelines, protocols, standards or similar criteria relied upon in denying the claim must be provided to the claimant upon request.”[3]

It is important to note that even under the prior rule, plans would be required upon request to verify that it has produced all the internal rules guidelines, etc. concerning the denied claim that were or should have been considered in deciding the claim.[4] The amendments did not change this requirement. The DOL comments emphasize that it may be important for the claimant to know that a claim was denied without the claims adjudicator having considered a rule, guideline, protocol, standard or other similar criteria that was intended to govern the determination of the claim.

Such criteria could include, for example, information that “demonstrates compliance with administrative processes and safeguards.”[5]

Indeed, the Department has taken the position that internal rules, guidelines, protocols, or similar criteria would constitute instruments under which a plan is established or operated within the meaning of section 104(b)(4) of ERISA and, as such, must be disclosed to participants and beneficiaries. See FAQs About The Benefit Claims Procedure Regulation, C-17 (www.dol.gov/sites/default/files/ ebsa/about-ebsa/our-activities/ programs-and-initiatives/outreach-andeducation/hbec/CAGHDP.pdf).[6]

3.     Implications

Under the guidance of the DOL, claims administrators should be required to produce their entire claims manuals or at least those portions that are “relevant” to the claim. Denial notices will be required to include a disclosure of any external guidelines that the plan or its consultants relied upon as part of the claim determination process. This would include, for example, the “MD Guidelines” often cited by the plan’s medical consultants and Dictionary of Occupation Titles material considered by vocational reviewers in defining the claimant’s occupation.

© Andrew Whiteman 2019

[1] Section 503-1(g)(1)(vii)(C) and (j)(6)(iii).

[2] 81 Federal Register 243, p. 92323.

[3] Id.

[4] Id.

[5] Id.

[6] Id., p. 92324.

Whiteman Law Firm specializes in cases involving claims for disability insurance and other employee benefits. These cases typically involve application of a federal law, the Employee Retirement Income Security Act of 1974, known by the acronym ERISA, and are usually resolved through the benefit plan’s appeal process or federal court. We have helped hundreds of individuals with their claims for short-term and long-term disability insurance benefits.

Contact us for more information about our ERISA disability benefits practice.

New ERISA Disability Claim Regulations – Part 3by Andrew Whiteman

New ERISA Disability Claim Regulations – Part 3

On April 1, 2018, a new disability claim regulation came into effect. The regulation was promulgated by the United States Department of Labor (referred to herein as “DOL”) under the authority of the Employee Retirement Income Security Act of 1974 (“ERISA”) and applies to all employee benefit plans that provide disability benefits.

This is the third in a series of nine blog posts that will summarize important features of the new regulation. The new regulation amended the existing regulation in the following eight areas:

1. Conflicts of interest involving claims adjudicators and medical and vocational consultants.
2. Additional disclosures required with denial notices.
3. Disclosure of plan criteria.
4. Requires notifications to be made in a “culturally and linguistically-appropriate manner.”
5. Disclosure of new evidence and new rationales prior to denial on review.
6. Disclosure of contractual limitations period deadline.
7. Enhanced remedy for a plan’s violation of the regulation.
8. Expansion of the definition of “adverse benefit determination.”

The last blog post discussed the provisions of the new regulation that are designed to insure the independence and impartiality of persons involved in making the claim decision, including the plan’s claims personnel and medical and vocational consultants. This week’s blog will discuss the second change to the regulation – the requirement that plans make additional disclosures in their denial letters.

I. Summary of the Changes to the 503 Regulation

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B. Additional Disclosures Required with Notices of Denial

1. Disclosure of Basis of Disagreements with Providers, Consultants, and the Social Security Administration

a. The Rule

The Regulation provides that in the case of an adverse benefit determination, whether on the claim or an appeal, the notification must include a discussion of the basis for disagreeing with or not following the views of the claimant’s health care professionals and vocational consultants, the views of the plan’s medical or vocational consultants, and a disability determination made by the Social Security Administration. The plan must provide:

(A) A discussion of the decision, including an explanation of the basis for disagreeing with or not following:

(i) The views presented by the claimant to the plan of health care professionals treating the claimant and vocational professionals who evaluated the claimant;

(ii) The views of medical or vocational experts whose advice was obtained on behalf of the plan in connection with a claimant’s adverse benefit determination, without regard to whether the advice was relied upon in making the benefit determination; and

(iii) A disability determination regarding the claimant presented by the claimant to the plan made by the Social Security Administration.

b. DOL Comments

This amendment addresses a huge problem in ERISA disability cases – the plan’s medical experts and the plan itself almost never explain the basis for their rejection of the opinions of the claimant’s medical team. This is often a point of contention in litigation, and courts have criticized the plan’s medical consultants for failing to explain the basis of their disagreement with treating providers. See, e.g., Gorski v. ITT Long Term Disability Plan for Salaried Employees, 314 Fed. Appx. 540 (4th Cir. 2008) where the Court stated:

The problem with Dr. Soriano’s opinion is that Dr. Soriano never explained on what basis he doubted the veracity of Gorski, whom he had never examined. To the extent that he did not believe that Gorski’s physical problems would cause the intense pain of which she complained, he never revealed why he rejected the view of the other doctors that dislodged surgical hardware was irritating surrounding nerve tissue, resulting in debilitating pain for Gorski. . . . Without such a discussion, Dr. Soriano’s report is simply an unreasoned and unexplained rejection of the objective evidence in the record, Gorski’s claims regarding her level of pain and functionality, and the opinions of Drs. Huffmon and Faircloth that she was totally disabled.

314 Fed. Appx. at 547 (emphasis added).

Given the failure of plans historically to explain the basis for refusing to follow treating providers’ recommendations, it is a bit surprising to read that “commentators generally either supported or did not object to the requirement to explain a disagreement with a treating health care professional in adverse benefit determinations.”

The amended Regulation requires disclosure of the plan’s basis for not following advice provided by its own consultants. Interestingly, the DOL commented that its experience in enforcing the current regulation revealed instances of “expert shopping” by plans, “where claims adjudicators may consult several experts and deny a claim based on the view of one expert when advice from other experts who were consulted supported a decision to grant the claim.” Plans will be required to disclose materials related to such consultations in response to a “request for relevant documents.”

Importantly, the rule is not limited to a provider’s conclusions about whether a claimant is disabled.

In the Department’s view, to the extent the claims adjudicator disagrees with foundational information in denying a claim, the claimant has a right to know that fact to the same extent the claimant should be made aware that the claims adjudicator disagrees with an opinion from a medical or vocational expert that the claimant is disabled.

(emphasis added). Presumably, “foundational information” would include such things as the treating provider’s clinical observations and test results, the provider’s decision to credit the claimant’s descriptions of her symptoms, and the provider’s diagnosis. To require a discussion of the basis for any disagreements is a matter of “basic fiduciary accountability.”

The Regulation requires a discussion of the basis for disagreeing with or not following disability determinations of the SSA or other payors of disability benefits. This discussion must be more than “boilerplate text about possible differences in applicable definitions, presumptions, or evidence.” Regarding SSA disability determinations specifically, “a more detailed justification would be required in a case where the SSA definitions were functionally equivalent to those under the plan.” Courts have criticized plans for failing to follow decisions of the SSA. See, e.g., Montour v. Hartford Life and Accident Ins. Co., 588 F.3d 623, 637 (9th Cir. 2009) (‘‘failure to explain why it reached a different conclusion than the SSA is yet another factor to consider in reviewing the administrator’s decision for abuse of discretion, particularly where, as here, a plan administrator operating with a conflict of interest requires a claimant to apply and then benefits financially from the SSA’s disability finding.’’); Brown v. Hartford Life Ins. Co., 301 F. App’x 772, 776 (10th Cir. 2008) (insurer’s discussion was ‘‘conclusory’’ and ‘‘provided no specific discussion of how the rationale for the SSA’s decision, or the evidence the SSA considered, differed from its own policy criteria or the medical documentation it considered.’’).

The DOL expressly declined to adopt a rule that required deference to a treating physician’s opinion because, inter alia, “a treating physician rule is not necessary to guard against arbitrary decision-making by plan administrators.”

c. Implications

The requirement that plans explain the basis for their disagreements with treating providers, the plan’s own consultants, and decisions of the SSA is a huge leap forward for claimants. The adequacy of the plan’s explanations of the basis for its disagreements with treating providers, consultants, and other disability providers will be the new battleground.

2. Explanation of Medical Necessity or Experimental Treatment Determinations

The Regulation now requires that if an adverse benefit determination is based on a medical necessity or experimental treatment limitation or exclusion, the denial notice must contain either an explanation of the scientific or clinical judgment for the determination, applying the terms of the plan to the claimant’s medical circumstances, or a statement that such explanation will be provided free of charge upon request.

GenX – EPA cites Chemours for Violating the Toxic Substances Control Act.by Andrew Whiteman

GenX – EPA cites Chemours for Violating the Toxic Substances Control Act

A recent notice of violations issued by the United States Environmental Protection Agency alleges that The Chemours Company failed to disclose its use of toxic chemicals at plants located in North Carolina and West Virginia.

On February 13, 2019, the EPA cited Chemours for violating Sections 5 and 8 of the Toxic Substances Control Act (“TSCA”). The alleged violations occurred at Chemours’ Fayetteville Works facility located near Fayetteville, North Carolina, and its Washington Works facility near Parkersburg, West Virginia.

The notice of violations alleged that Chemours committed the following violations: (1) Chemours failed to submit to the EPA a Pre-Manufacture Notice prior to manufacturing or importing a new chemical substance; (2) Chemours failed to comply with the applicable Significant New Use Rules (“SNUR”) and failed to submit a Significant New Use Notice (“SNUN”) to the EPA; (3) Chemours failed to comply with a TSCA Section 5(e) order; and (4) Chemours failed to comply with TSCA Section 8 and the Chemical Data Reporting rule by failing to meet reporting and record-keeping requirements.

Chemours failed to give required notices for several chemicals including HFPO, a chemical used to make the compound GenX. The EPA classifies GenX as an “emerging contaminant” on the basis of animal studies that show oral exposure to GenX may affect the kidneys, blood, immune system, and liver and developing fetuses. The EPA also cited Chemours for violating a 2009 agreement with the regulator that would have prevented 99 percent of the chemical from entering the water and air.

The EPA gave Chemours 14 days to respond to the notice of violations.

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Whiteman Law Firm, along with several other firms, is representing plaintiffs in class action lawsuits against DuPont and Chemours for environmental contamination of the air and water in southeastern North Carolina. In these lawsuits, the plaintiffs alleged that the defendants discharged toxic chemicals from their chemical production facility near Fayetteville, North Carolina into the surrounding air and water. The plant produces chemicals that are used to make non-stick coatings for cookware and other consumer products. Plaintiffs alleged that DuPont and Chemours knew that this family of chemicals is dangerous, but nevertheless dumped these chemicals into the air and water to avoid the expense of taking appropriate safety precautions while misleading regulators about the nature of their discharges.

Please contact us for more information.

 

New ERISA Disability Claim Regulations – Part 2by Andrew Whiteman

New ERISA Disability Claim Regulations – Part 2

On April 1, 2018, a new disability claim regulation came into effect. The regulation was promulgated by the United States Department of Labor (referred to herein as “DOL”) under the authority of the Employee Retirement Income Security Act of 1974 (“ERISA”) and applies to all employee benefit plans that provide disability benefits.

This is the second in a series of nine blog posts that will summarize important features of the new regulation. The last blog post discussed the history of DOL’s regulation of the disability claim process under ERISA, the rationale for revising the existing regulation, and the types of plans that are covered by the new regulation.

The new regulation amended the existing regulation in the following eight areas:

1. Conflicts of interest involving claims adjudicators and medical and vocational consultants.
2. Additional disclosures required with denial notices.
3. Disclosure of plan criteria.
4. Requires notifications to be made in a “culturally and linguistically-appropriate manner.”
5. Disclosure of new evidence and new rationales prior to denial on review.
6. Disclosure of contractual limitations period deadline.
7. Enhanced remedy for a plan’s violation of the regulation.
8. Expansion of the definition of “adverse benefit determination.”

This blog post will cover the new provisions relative to conflicts of interest involving the plan’s claims adjudicators and medical and vocational consultants.

I.     Summary of the Changes to the 503 Regulation

A.      Avoiding Conflicts of Interest

1.      The Rule

29 C.F.R. § 2560.503-1(b)(7) prohibits a plan from providing financial incentives to its claim adjudicators and medical and vocational consultants.

(b) * * * (7) In the case of a plan providing disability benefits, the plan must ensure that all claims and appeals for disability benefits are adjudicated in a manner designed to ensure the independence and impartiality of the persons involved in making the decision. Accordingly, decisions regarding hiring, compensation, termination, promotion, or other similar matters with respect to any individual (such as a claims adjudicator or medical or vocational expert) must not be made based upon the likelihood that the individual will support the denial of benefits.

2.      The DOL’s Comments

The independence and impartiality rules are not limited to persons responsible for making the decision:

In the Department’s view, the text of paragraph (b)(7) is clear that the independence and impartiality requirements are not limited to persons responsible for making the decision.

For example, the independence and impartiality rules apply to consulting experts who do not decide whether to allow the claim but who may “support the denial of benefits.”

The Rule is not limited “to individuals the plan directly hires.” Thus, the independence and impartiality rules govern apply to consultants hired and compensated by third-party service providers, as is typically the case.

The DOL’s final rule publication states:

Similarly, a plan cannot contract with a medical expert based on the expert’s reputation for outcomes in contested cases, rather than based on the expert’s professional qualifications.

During the rule-making process, commentators questioned whether the independence and impartiality requirements would result in claimants requesting discovery into “statistics and other information on cases in which the medical expert expressed opinions in support of denying rather than granting disability benefits” and, more generally, the “reputation” of the consultant. In response, the DOL stated that its preamble statement concerning consultants being hired based on historical outcomes of their cases rather than qualifications, a so-called “reputation” hire, represents one way that the independence and impartiality rules could be violated.

Regarding the issue of discovery, the DOL stated that the requirements of the rule do not expand the scope of “relevant documents” subject to the disclosure requirements of section 2560.503-1(g)(1)(vii)(C) and (h)(2)(iii) of the 503 Regulation. However, the DOL added:

or do the independence and impartiality requirements in the rule prescribe limits on the extent to which information about consulting experts would be discoverable in a court proceeding as part of an evaluation of the extent to which the claims administrator or insurer was acting under a conflict of interest that should be considered in evaluating an adverse benefit determination.

3.      Implications

The impartiality of the plan’s medical consultants is a huge issue in ERISA disability litigation. The treating provider rule does not apply. Black & Decker Disability Plan v. Nord, 538 U.S. 822, 831 (2003). Instead, courts have held that it is not an abuse of discretion for a plan to rely on the opinions of its own consulting physician, even if the consultant never examined the claimant. Black & Decker, 538 U. S. at 834. Cf. Boyd v. Liberty Life Assurance Co., 362 F.Supp.2d 660, 669 (W.D.N.C. 2005). (a treating physician’s “opinion as to the severity of the impairment and the interference to the patient’s ability to work that such an impairment causes, generally should not be rejected ‘unless the adjudicator can point to persuasive, contradictory medical evidence.’”).

It seems likely that the DOL’s commentary will embolden claimants to request discovery in the “statistics” concerning the outcomes of claims referred to the plan’s consultants. Some courts have allowed such discovery under the 2002 Regulation:

However, the information Hartford has been ordered to produce – statistics concerning claims referred to Dr. Fuchs and MES by Hartford, the number of cases in which Dr. Fuchs found claimants to be suffering from restrictions preventing work, and any agreements or guidelines pursuant to which MES operated – goes to potential bias within Hartford’s referral process, which may be relevant on the question of its structural conflict of interest. The Court will therefore overrule Defendant’s objection regarding third-party vendors.

Bruce v. Hartford, 21 F. Supp. 3d 590, 598 (E.D. Va. 2014).

New ERISA Disability Claim Regulations – Part 1by Andrew Whiteman

New ERISA Disability Claim Regulations – Part 1

On December 19, 2016, the United States Department of Labor (referred to herein as “DOL”) revised the claims procedures for employee benefit plans that provide disability benefits under the Employee Retirement Security Act of 1974 (“ERISA”). The DOL’s new regulation strengthened the current rules primarily by applying to disability benefit claims the procedures and safeguards applicable to group health benefits under the Affordable Care Act. The effective date of the new regulation was extended from January 1, 2018, until April 1, 2018, to allow for an additional comment period.

This is the first of a series of blog posts that will summarize important features of the new regulation. The revision amended the existing regulation in the following eight areas:

  1. Conflicts of interest involving claims adjudicators and medical and vocational consultants.
  2. Additional disclosures required with denial notices.
  3. Disclosure of plan criteria.
  4. Requires notifications to be made in a “culturally and linguistically-appropriate”
  5. Disclosure of new evidence and new rationales prior to denial on review.
  6. Disclosure of contractual limitations period deadline.
  7. Enhanced remedy for a plan’s violation of the regulation.
  8. Expansion of the definition of “adverse benefit determination.”

Of equal importance to the amendments themselves, however, is the DOL’s extensive commentary, which may be found in section II. B of 81 Federal Register 243.[1] The DOL’s views will be very helpful to practitioners and the courts in interpreting the new regulations, and it is likely that courts will defer to the agency’s official interpretive statements under the Chevron doctrine. See Christensen v. Harris County, 529 U.S. 576, 587 (2000) (An agency’s interpretation of a regulation that was arrived as part of a formal notice-and-comment rulemaking process should be entitled to deference.)

This blog post, the first of nine, will cover the history of the DOL’s regulation of the disability claim process under ERISA, the rationale for revising the existing regulation, and the types of plans that are covered by the new regulation. Subsequent blogs will cover the eight changes to the regulation.

  1. History of DOL Regulations

The Department of Labor published its first regulation in 1977 at 29 C.F.R. 2560.503-1. This codification has been referred to as the “503 Regulation.” It applied to all covered employee benefit plans. The DOL revised the 503 Regulation in 2000 by providing new time frames and improved requirements for notices and disclosures relative to group health and disability benefit claims. Although the 503 Regulation continued to be applicable to all employee benefit plans, the more robust procedural requirements applied to claims for group health and disability benefits. The 2000 revision became effective for claims filed on and after January 1, 2002.

The DOL published its proposed revision on November 18, 2015.[2] The Department received 145 public comments in response to the publication. The new regulation and the Department of Labor’s extensive commentary were published on December 19, 2016, and may be found at 81 Federal Register No. 243 (2016).

On October 12, 2017, the DOL announced that it was seeking comments on a proposed 90-day delay of the applicability of the new regulations through April 1, 2018.[3] This action followed the Trump administration’s Executive Order 13777, entitled Enforcing the Regulatory Reform Agenda, which required, inter alia, a review of existing regulations within each federal agency and input from persons significantly affected by the existing regulation. The DOL received 110 comments in response to the proposed delay. Most of the industry commentators – employers, plans, insurers, and plan service administrators – offered comments similar those made during the rule-making process. Accordingly, on November 29, 2017, the DOL announced that notwithstanding the stakeholders’ comments it would adopt the proposed new regulation without change.[4] The effective date was revised to April 1, 2018.

2. Background of the Revision to the 2002 Regulation

The Department of Labor cited several reasons for reconsidering the 503 Regulation. Long-term disability cases dominate employee benefits litigation. Between 2006 and 2010, LTD cases accounted for 64.5% of benefits litigation, whereas cases involving health plans and pension plans accounted for only 14.4% and 9.3%, respectively. In addition, the DOL found that “[i]nsurers and plans looking to contain disability benefit costs may be motivated to aggressively dispute disability claims” and quoted from court cases to support its view.[5]

The DOL’s ERISA Advisory Council was asked to reconsider the disability claims process and in December 2012 and produced a report titled Managing Disability Risks in an Environment of Individual Responsibility[6] (herein, “Council Report”). The Council concluded:

Not all results have been positive for the participant under ERISA-covered plans and the implementing claim procedures regulations, even though these rules were intended to protect participants. The Council was made aware of reoccurring issues and administrative practices that participants and beneficiaries face when appealing a claim that may be inconsistent with the existing regulations.[7]

The DOL’s determination to revise the claims procedures was influenced by industry practices:

The Department’s determination to revise the claims procedures was additionally affected by the aggressive posture insurers and plans can take to disability claims as described above coupled with the judicially recognized conflicts of interest insurers and plans often have in deciding benefit claims. In light of these concerns, the Department concluded that enhancements in procedural safeguards and protections similar to those required for group health plans under the Affordable Care Act were as important, if not more important, in the case of claims for disability benefits.[8]

     3.    What Plans are Covered by the New Regulations

Any employee benefit plan that conditions the availability of a benefit upon a finding of disability by the plan provides a disability benefit that is subject to the special rules for disability claims under the 503 Regulation.[9] Thus, a disability pension or early retirement benefit that is conditioned on a finding of disability by the plan would be considered a disability benefit. On the other hand, where a plan provides that a benefit is available upon on a finding of disability made by a party other than the plan, such as the Social Security Administration or another employer plan, a claim for such a benefit is not treated as a disability claim for purposes of the 503 Regulation.[10]

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The next blog post will cover topic 1 – conflicts of interest involving claims adjudicators and medical and vocational consultants.”

 

© Andrew Whiteman 2019

 

[1] 81 Federal Register 243, at pp. 92319-21331.

[2] See 80 Federal Register 230 (2015).

[3] 82 Federal Register 196 (2017), available at https://www.gpo.gov/fdsys/pkg/FR-2017-10-12/pdf/2017-22082.pdf.

[4] See 82 Federal Register 228, available at https://www.gpo.gov/fdsys/pkg/FR-2017-11-29/pdf/2017-25729.pdf.

[5] See 81 Federal Register 243, n.6.

[6] Available at http://www.dol.gov/sites/default/files/ebsa/about-ebsa/about-us/erisa-advisory-council/2012ACreport2.pdf.

[7] Council Report, p. 6.

[8] 81 Federal Register 243, p. 92317.

[9] 81 Federal Register 243, n.3.

[10] Id., and see also Benefit Claims Procedure Regulation FAQs, A-9, available at https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/benefit-claims-procedure-regulation. (Caution: The FAQs have not been updated to reflect the 2018 claims procedures.)

 

Whiteman Law Firm specializes in cases involving claims for disability insurance and other employee benefits. These cases typically involve application of a federal law, the Employee Retirement Income Security Act of 1974, known by the acronym ERISA, and are usually resolved through the benefit plan’s appeal process or federal court. We have helped hundreds of individuals with their claims for short-term and long-term disability insurance benefits.

Contact us for more information about our ERISA disability benefits practice.

Support North Carolina Legislation to Close the Medicaid Coverage Gapby Andrew Whiteman

Support North Carolina legislation to close the Medicaid gap.

Yesterday, on the first day of the 2019 session, North Carolina legislators introduced Senate Bill 3 and House Bill 5, which would raise the eligibility ceiling for citizens to qualify for Medicaid. The Bills would provide Medicaid coverage to those who have modified adjusted gross income that is at or below 133% of the federal poverty level, are age 19 or older and under age 65, are not eligible for or enrolled in Medicare Parts A or B, and are not otherwise entitled to Medicaid.

Why is this important?

The North Carolina General Assembly declined to expand Medicaid for the last six years, thereby rejecting free federal dollars that would cover 90% of the cost of the expansion. Under the Affordable Care Act, Medicaid expansion was supposed to fill the coverage gap. According to a North Carolina Justice Center paper, an estimated 300,000 North Carolinians are currently in the so-called coverage gap. They make too much money to qualify for Medicaid, but not enough to receive financial assistance in the Affordable Care Act marketplace. Most folks in the coverage gap can be described as the “working poor” and include low-paid employees in the construction, fast food, and retail sectors.

Disabled individuals may also fall in the coverage gap. I have seen this happen many times. Workers who become disabled due to accident or illness usually lose their employer-sponsored health care. Having no income, or limited income provided by disability benefits, the disabled often cannot afford the cost of continued coverage under COBRA. Approval for Social Security disability often takes years, and Medicare eligibility is delayed for 24 months after the effective day of approval. During the waiting period, the disabled often fall in the coverage gap between the current Medicaid eligibility ceiling and the Affordable Care Act subsidy floor. The lack of affordable health coverage adversely affects workers’ ability to afford treatment and impedes their ability to recover and return to the workforce. To make matters worse, the lack of affordable health care makes it more difficult to prove disability to the Social Security Administration or private disability insurers.

You can make a difference!

Let the senators and representatives who introduced this legislation know that you support their efforts. More importantly, let your senator or representative know that you care about this important issue. A list of North Carolina legislators and their contact information may be found here.

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