As part of a larger project undertaken by the Chicago Bar Association’s Employee Benefits Committee, Frank Del Barto has prepared comments for submission to the Departments of Labor, Treasury and Health and Human Services relating to the “culturally and linguistically” appropriate requirements in the new internal and external claim appeal regulations. These regulations, which were released on July 23, 2010, are effective for all plans and issuers on September 21, 2010. The new internal claims regulations require plans and issuers to: (1) utilize a broader definition for “adverse benefit determinations,” (2) notify claimants “as soon as possible” but not later than 24 hours after receipt of the claim of the plan’s decision on an urgent care claim, (3) provide claimants “free of charge” with all new or additional evidence considered, relied upon, or generated in connection with the claim, (4) avoid internal conflicts of interest relating to claims adjudication, (5) provide notices in a “culturally and linguistically” appropriate manner, and (6) strictly adhere to all internal claim appeal procedures. Failure to “strictly adhere” entitles the claimant to an immediate external review and decision that may become binding on the plan.

The interim final regulations require plans and issuers to provide notices in a “culturally and linguistically” appropriate manner. Plans and issuers are considered to have met this requirement if the notices are “provided in a non-English language” based on thresholds of the number of participants “who are literate in the same non- English language.” These thresholds are adapted from the style and format requirements for summary plan descriptions. If the threshold number is met, the notice must be provided upon request in the non-English language. More importantly, all subsequent notices must also be provided in the same non-English language. In his submission, Frank argued that the recently issued model notices will undoubtedly increase the cost of plan administration and increase the number of external claim reviews.

The model notices contain several “free-form” sections that require the plan or issuer to provide detailed information regarding the decision made on every “individual” claim. These “free form” sections require the plan or issuer to provide (1) “Background Information,” (2) “Final Decision” information that includes a list of all documents and statements that were reviewed in making the final decision and (3) “Findings” which discuss the reason or reasons for the decision. Based on this requirement, plans and issuers will be required to hire and train additional claims personnel that are proficient in several non-English languages. For the Departments’ consideration, Frank noted that drafting correspondence in a non-English language is not the same as drafting a legally sufficient adverse benefit determination in an a non-English Language (Spanish, Japanese, Russian, Polish, Chinese, etc.) as required by the new regulations. As a result of the “culturally and linguistically” appropriate requirement, Frank posited that plan administrative expenses and employee premiums will undoubtedly increase. Plan expenses and premiums will increase even further when one considers that these new “free form” adverse benefit determinations will form the basis for any external claim appeal thereby requiring the independent reviewing agency to secure language translation services and/or hire individuals with the ability to read and interpret multiple languages.