How Long Does a Disability Insurer Have to Decide on an ERISA Claim?

The Department of Labor has drafted regulations which provide that a disability claim must be resolved, at the initial level, within 45 days of receipt of a complete application; a plan may, however, extend that decision-making period for an additional 30 days for reasons beyond the control of the plan.

If, after extending the time period for a first period of 30 days, the plan administrator determines that it will still be unable, for reasons beyond the control of the plan, to make the decision within the extension period, the plan may extend decision-making for a second 30-day period. The regulation requires that the plan provide a disability claimant with an extension notice that details the reasons for the delay. Thus, a plan may take, under limited and justifiable circumstances, up to 105 days to resolve a disability claim at the initial claims stage, provided that appropriate notice is provided to the claimant before the end of the first 45 days and again before the end of each succeeding 30-day period.

In the Department of Labor’s view, this framework will enable a plan to take sufficient time to make an informed decision on what may be a complex matter, but the plan will be required to keep the disability claimant well informed as to the issues that are delaying decision-making and any additional information the claimant should provide. By limiting the reasons for which decisions may be delayed, the regulation also requires prompt decision-making when appropriate.

For our experience we often see that claim decision range between 45-90 days as the disability carrier will continue to ask for additional information and claim they do not have sufficient information in order to render a claim decision. Furthermore, it usually takes several weeks for the disability company to obtain all of your medical records and then have their doctors review the records