The U.S. Department of Labor (DOL)'s Employee Benefits Security Administration issued Technical Release 2011-01 on March 18, 2011, providing extra time for plan sponsors to comply with certain parts of the new internal claim and appeals procedure requirements for nongrandfathered group health plans under the Patient Protection and Affordable Care Act (PPACA).
Technical Release 2011-01 applies only to nongrandfathered group health plans. Grandfathered plans are not subject to the PPACA's new internal and external appeals requirements. However, the requirements apply when grandfather status is lost.
In light of Technical Release 2011-01, Sibson Consulting, a division of Segal, issued an alert advising sponsors of nongrandfathered plans not to update their explanations of benefits (EOBs) until the January 2012 plan year. Further guidance is expected from federal agencies before then.
Steps to Take
There are still numerous issues associated with the new internal claims and appeals procedures and with external review procedures for nongrandfathered plans, according to Segal, including:
• Plan sponsors should confirm that internal claims and appeals procedures comply with existing ERISA rules and should revise appeals procedures to include the new internal claims and appeals procedures and external review procedures.
• Plan sponsors that decide to follow the federal safe harbor to select three Independent Review Organizations (IROs) need to conduct a request for proposal and set up processes to monitor the performance of the IROs selected.
• Systems vendors should review administrative systems that produce notices to make certain that needed updates have been made related to the new internal claims and appeals procedures and external review procedures.
• Clear communications should be sent to plan participants explaining the new internal claims and appeals procedures and external review procedures.
Health Care Reform Enforcement Grace Period Announced, SHRM Online Legal Issues, September 2010
Guidance on Claims and Appeals Rules, SHRM Online Benefits Discipline, August 2010
New Health Care Claims and Appeal Rules Will Include a Tax Bite, SHRM Online Legal Issues, August 2010
Regulations Provide Right to Appeal Insurance Plan Decisions, SHRM Online Legal Issues, July 2010
SHRM Online Benefits DisciplineSHRM Online Health Care Reform Resource Page