Employee Benefits-DOL Announces Grace Period For Complying With New Rules For Internal Claims and Appeals Under The Affordable Care Act In Technical Release No. 2010-02, the Department of Labor (the “DOL”) has provided a grace period for complying with the new rules, applicable to (nongrandfathered) group health plans, for internal claims and appeals under the recently enacted Affordable Care Act.
By way of background, the Affordable Care Act sets forth standards for covered group health plans regarding both internal claims and appeals and external review of those claims. The governing departments (Health and Human Services, Department of Labor and the Treasury Department) previously published interim final regulations (75 FR 43330, published July 23, 2010) implementing the new standards. The DOL also issued Technical Release 2010-01 (on August 23, 2010), providing interim procedures for self-insured plans with respect to the Federal external review process.
According to Technical Release No. 2010-02, the new standards generally require that covered group health plans have an effective internal claims and appeals process. This process must contain the procedures of 29 CFR 2560.503-1 (the DOL claims procedure regulation), and must also reflect the following:
1. An adverse benefit determination includes a decision that may lead to a rescission of coverage.
2. The plan must notify a claimant of a benefit determination (whether adverse or not) for a claim involving urgent care as soon as possible, but not later than 24 hours after the plan receives the claim.
3. The plan is required to provide the claimant (free of charge) with new or additional evidence considered, relied upon, or generated by the plan in connection with the claim, as well as any new or additional rationale for a denial at the internal appeals stage, and a reasonable opportunity for the claimant to respond to this evidence or rationale.
4. The plan must have safeguards against conflicts of interest, so that a claims adjudicator or medical expert (or an individual in a similar position) must not be retained based upon the likelihood that the individual will support the denial of benefits.
5. Notices must be provided in a culturally and linguistically appropriate manner.
6. In the case of an initial or final adverse benefit determination, the plan must provide a notice which includes or discloses: (1) information sufficient to identify the claim involved, such as the date of service and health care provider, (2) the reasons for the decision, including, in the case of a final adverse benefit determination, a discussion of the decision, (3) a description of available internal appeals and external review processes (including information on how to initiate an appeal) and (4) the availability of, and contact information for, a state or local official who can assist the claimant.
7. If the plan fails to strictly adhere to all requirements pertaining to internal claims procedures, the claimant is deemed to have exhausted the plan’s internal claims and appeals process, and the claimant may initiate any available external review process or remedies available under ERISA or State law.
To provide a plan with time to comply with the foregoing, Technical Release 2010-02 establishes an enforcement grace period until July 1, 2011, with respect to requirements #2, #5, #6 and #7 above, during which the DOL and the Internal Revenue Service (“IRS”) will not take any enforcement action against a group health plan that is working in good faith to implement such those requirements but does not yet have them in place.