In Technical Release No. 2011-01, the Employee Benefits Security Administration (the “EBSA”) stated that it is extending the non-enforcement period for the interim regulations, issued in 2010 under the Affordable Care Act (the “2010 interim regulations”), which govern internal claims and appeals under group health plans. Those interim regulations were issued on July 23, 2010 (at 75 FR 43330).
By way of background, the Affordable Care Act generally requires that non-grandfathered group health plans have an effective internal claims and appeals process. This process must initially incorporate the rules of 29 CFR 2560.503-1, and then must be updated in accordance with standards established by the EBSA. The 2010 interim final regulations contain the following such standards:
1. The scope of adverse benefit determinations eligible for internal claims and appeals includes a rescission of coverage.
2. A plan must notify a claimant of a benefit determination, with respect to a claim involving urgent care, as soon as possible but not later than 24 hours after the plan’s receipt of the claim.
3. A plan is required to provide the claimant with: (a) new or additional evidence considered, relied upon, or generated by the plan in connection with the claim, (b) new or additional rationale for a denial at the internal appeals stage, and (c) a reasonable opportunity for the claimant to respond to such new evidence or rationale.
4. A claims decider or medical specialist cannot have a conflict of interest that will encourage him to deny the claim.
5. Notices must be provided in a culturally and linguistically appropriate manner.
6. Notices must include additional information, such as: (a) information sufficient to identify the claim involved, (b) a discussion of the reason for a claim denial, and (c) a description of available internal appeals and external review processes, including how to initiate an appeal.
7. If a plan fails to strictly adhere to all the requirements of the 2010 interim final regulations, 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.
Initially, the above standards generally became effective on the first day of the first plan years starting after September 23, 2010. However, on September 20, 2010, the EBSA issued Technical Release 2010-02, which contained an enforcement grace period, until July 1, 2011, with respect to standards 2, 5, 6 and 7 above.
Technical Release No. 2011-01 now extends the enforcement grace period described above, until plan years beginning after 2011, for standards 2,5, and 7. During the grace period, neither the Department of Labor nor the Internal Revenue Service will take any enforcement action against a group health plan for failing to comply with those standards. The enforcement grace period is similarly extended for standard 6, but different dates and rules apply.