On Friday, July 23, 2010, the Departments of Health and Human Services, Labor and the Treasury released interim final regulations implementing the enhanced internal claims and appeals and external review processes under the Patient Protection and Affordable Care Act. These regulations will generally affect health insurance issuers, group health plans and participants, beneficiaries, and enrollees in health insurance coverage and group health plans, and are effective for plan or policy years beginning on or after September 23, 2010.
The regulations have broad applicability. The IRS regulations affect private-sector and church group health plans and insurers; the DOL regulations apply to ERISA plans and their insurers; and the HHS regulations apply to governmental plans and insurers operating in the group and individual markets under the Public Health Service Act (PHSA). Compliance responsibilities vary for insured and self-insured plans. Self-insured plans under ERISA must comply with all of the rules, while insured plans or their insurers must comply with the internal claims and appeal rules. The insurer remains responsible for complying with the external review requirements. However, grandfathered plans and plans providing “excepted” benefits under HIPAA are not required to comply. “Excepted” benefits include most health FSAs, some HRAs and limited scope dental and vision plans.
The effect of these new regulations is to extend the application of existing DOL claims procedure regulations to non-ERISA governmental and church group plans. These regulations also enhance existing DOL regulations by expanding the definition of “adverse benefit determination” to include rescissions of coverage; shortening the deadline for making urgent care determinations from 72 hours to 24 hours; adding criteria that spell out what constitutes a “full and fair review” including giving claimants the opportunity to present evidence and testimony and to give claimants sufficient time to review and respond to any new evidence adduced by the insurer or plan; adding criteria to avoid conflicts of interest in the selection of persons to conduct the claims review; expanding the content that must be included in any benefits denial notice; permitting a claimant to go to court without exhausting the plan’s internal review and appeal procedures if the plan or insurer fails to “strictly adhere” to the new requirements; allowing claimants to obtain a review of a “final internal adverse benefit determination” by an “independent review organization” (IRO); extending federal external review procedures to self-insured group health plans and insurers that are not subject to state regulation; and requiring the provision of notices describing the claims review and appeal rules in a “culturally and linguistically appropriate manner” if the plan covers a specified minimum number of participants who are literate in the same non-English language. This last provision goes substantially beyond current ERISA requirements which only require that “assistance” be provided to non-English readers. Under the new regulations, relevant notices will have to be translated into the appropriate language upon request and once translated, all subsequent notices to the claimants must also be translated.
These regulations may be found at http://edocket.access.gpo.gov/2010/pdf/2010-18043.pdf An accompanying Fact Sheet may be found at: http://www.dol.gov/ebsa/newsroom/fsaffordablecareact.html
