[10548]
December 10, 1998
TO: PENSION COMMITTEE No. 85-98
PENSION OPERATIONS ADVISORY COMMITTEE No. 68-98
RE: INSTITUTE COMMENT LETTER ON DOL'S PROPOSED CLAIMS
PROCEDURE REGULATIONS
______________________________________________________________________________
The Institute has submitted a comment letter to the Department of Labor in response to the
Department’s request for comments on the proposed revision of the claims procedure regulations. The
Institute comment letter makes the following points:
1. With respect to retirement plans, the current claims procedures have worked and continue
to work well. Changing the existing regulations as applied to retirement plans to reflect concerns
unique to health plan claims would result in needless change that would come at great cost to
employers, plans and participants. Uniformity of claims procedure standards among all
employee benefit plans should not be a goal of revised regulation, because benefits provided by
health plans and the claims that arise in the health care context are substantially different than
benefits provided by retirement plans and the nature of claims that arise there.
2. To the extent that the Department applies the proposed regulation to retirement plans, the
Department should clarify that participant inquiries and instructions to entities serving as plan
recordkeepers do not constitute “benefit requests” described in the proposed regulation.
Specifically, the Department should clarify that, with respect to retirement plans, the terms “benefit
request” and “claims for benefit” refer to requests and claims for retirement income, i.e., to the
payment of benefits, and not to ancillary features that the plan may offer.
Institute members provide nondiscretionary recordkeeping and administrative services to
retirement plans. These services include responding to participant requests for general
plan information and for basic information relating to a participant’s own individual account
balance in a plan. The Department should clarify that such requests are not “benefit requests”
under the proposed regulation. Similarly, Institute members receive transactional instructions from
participants, and the Department should clarify that such instructions are not “benefit requests”
under the proposed regulation.
3. Under the proposed regulation, a “benefit request” is deemed received by the plan
when a claimant “makes a communication reasonably calculated to bring the request to
the attention of persons responsible for benefit claims decisions.” The Department should
clarify that when retirement plan participants contact a plan’s third-party recordkeeper via the
recordkeeper’s automated voice response unit (VRU) or web site, that contact is not a
communication “reasonably calculated to bring the request to the attention of persons
responsible for benefit claims decisions.” Similarly, the Department should clarify that participant
inquiries and transactions conducted via contact with “live” telephone representatives of
third-party recordkeepers do not meet the regulatory standard set forth.
4. The proposed regulation provides that to the extent a request for benefits fails to
comply with a plan’s claims procedure, the plan administrator must notify the claimant that the
request does not comply and describe the plan’s procedures within five days of receipt of the
request for benefits. The Institute recommends that the five-day timeframe be extended to thirty
days for retirement plans. The Institute further recommends that plan administrators be
permitted to provide this notification orally, rather than in writing.
A copy of the comment letter is attached.
Russell G. Galer
Senior Counsel
Attachment