ERISA Advisory Council Posts Final Report

Last summer in this space, we were following the hearings the ERISA Advisory Council was holding on the topic of “Managing Disability Risks in an Environment of Individual Responsibility.” The Council was created by ERISA to advise the Department of Labor (DOL) on employee benefits issues.

The Council’s final report was posted last week on the EBSA website. While the contents of the report do not represent the position of the Department of Labor (DOL), the report is nonetheless instructive.

Key findings in the report include the following:

• The need for development of educational materials and outreach to help better inform individuals about the risk of becoming disabled during their working years and the value that disability plans provide;

• The important role that regulatory guidance on the topic of “automatic enrollment” could play in helping to increase disability plan participation levels;

• The recommendation that the DOL clarify the application of ERISA claim and appeal regulations to the specific topic of other income offsets that serve to reduce the benefit amount payable under group disability policies, especially in regard to how the reductions are calculated, the recovery of unpaid benefits by claimants in situations where the claimant does not end up receiving other income, and the types of other income sources that are offset against the disability benefits.

The Council concluded that in the upcoming review of ERISA claim and appeal regulations, the “DOL should pay particular attention to disability claims.”

Stay tuned.