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ERISA evidence rule poorly defined but promotes fair review

| May 14, 2021 | ERISA

U.S. Department of Labor amendments to the Employee Retirement Income Security Act became effective on April 1, 2018. Among the changes, regulators included a rule that granted disability benefit claimants the right to see and respond to new evidence used by insurers when considering their appeals. For people in New Jersey who have been denied disability benefits, the amendment reinforces the intention of the DOL that claimants have a full and fair review of their claims during the appeals process. However, the department offered no guidance that would define what qualifies as new evidence.

What could be new evidence?

Although regulators declined to define the term, opponents of the amendment within the insurance industry worried that it could mean new facts about a case or just a reinterpretation of facts by a different physician. The rule also grants claimants the right to timely access to new facts used against them and a chance to respond. In the view of the insurance industry this could drag on appeals and prevent timely decisions.

Court interpretation

In the absence of clear definitions of new evidence, the issue largely falls to the courts to settle disability claim disputes. In March 2019, a court affirmed the DOL’s position that a full and fair review included a claimant’s access to new evidence and a chance to respond to it prior to an insurer making a final and likely adverse decision.

At the heart of this particular case was a new physician’s report commissioned by the insurer. The insurer denied the claimant access to the report despite her request to see it. Although the court’s decision did not define new evidence, it supported a claimant’s right to review any new material used to make a benefit decision.