Background

In our July 2010 Employee Benefits Developments we wrote about the recently issued Interim Final Rules Relating to Internal Claims and Appeals and External Review Processes.

The Interim Final Claims Rules provide standards that non-grandfathered group health plans must follow in connection with both internal claims and appeals, and external review of denied claims. The Interim Final Claims Rules also provide a basis for determining when plans must comply with an applicable state external review process and when they must comply with the federal external review process.

For group health plans that are not subject to an existing state external review process (including self-insured plans), a federal process is to apply to non-grandfathered group health plans for plan years beginning on or after September 23, 2010 (January 1, 2011, for calendar-year plans).

The preamble to the Interim Final Claims Rules provided that there would be additional guidance on the federal external review process. In Technical Release 2010-01, released August 23, 2010, the U.S. Department of Labor (DOL) provides this guidance.

Technical Release 2010-01

The technical release provides an interim enforcement safe harbor for non-grandfathered self-insured group health plans that are subject to the federal external review process. Under the interim enforcement safe harbor, the DOL and IRS will not take any enforcement action against a self-insured group health plan that complies with either of the following compliance methods:

The group health plan complies with detailed procedures set forth in the technical release. Affected plans can begin their review of these procedures by accessing the technical release at: http://www.dol.gov/ebsa/pdf/ACATechnicalRelease2010-01.pdf

If a state chooses to extend its state external review process to self-insured plans, the group health plan chooses to voluntarily comply with the provisions of that state external review process.

The interim enforcement safe harbor applies for plan years beginning on or after September 23, 2010. The safe harbor applies until superseded by future guidance to be issued no later than July 1, 2011.

Model Notices

The preamble to the Interim Final Claims Rules also stated that the agencies would publish model notices that plans could use to satisfy the notice requirements of the Interim Final Claims Rules. These model notices are now posted on the DOL’s website at www.dol.gov/ebsa.

The model notices include:

  • A notice of adverse benefit determination available at: http://www.dol.gov/ebsa/IABDModelNotice2.doc
  • A notice of final internal adverse benefit determination available at: http://www.dol.gov/ebsa/IABDModelNotice1.doc
  • A notice of final external review decision available at: http://www.dol.gov/ebsa/IABDModelNotice3.doc

Model language for the description of the internal claims and appeals and external review procedures in the summary plan description provided to participants and beneficiaries will be posted in the future.