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March 31, 2011
The DOL, HHS, and the IRS (the Departments) have been issuing regulations in several phases related to provisions of the Affordable Care Act (ACA) pertaining to standards for internal claims appeals and external review. These provisions apply to all non-grandfathered plans effective on plan years beginning after September 23, 2010.
The Departments published interim final regulations on July 23. On September 20, 2010, the DOL issued Technical Release 2010-02 (T.R. 2010-02), which delayed enforcement for compliance with certain provisions of the rules until July 1, 2011.
The Departments have now issued a second enforcement delay. Technical Release 2011-01, released March 18th, extends the enforcement grace period for some provisions of the law until plan years beginning on or after January 1, 2012.
Important Note Regarding Fully-insured vs. Self-funded Plans
While these rules apply to both fully insured and self-funded plans, it is important to recognize that for fully-insured plans the rules apply directly to the insurance carrier (referred to as the “Issuer” in the law and regulations). Employers who sponsor fully-insured plans will rely on the insurance carrier to administer the claims appeal process, just as they have under prior rules.
On the other hand, employers who sponsor self-funded health plans are responsible to assure that their plan has implemented the appropriate internal appeal and external review procedures. Self-funded employers should consult with their administrator to determine what level of compliance support the administrator will provide to the employer’s plan. An administrator’s involvement, and ability to provide services that would assist the self-funded employer with their compliance obligations, may vary from firm to firm.
Internal Appeal and External Review Rules Background
The ACA requires that group health plans and health insurance issuers, that are not grandfathered health plans, implement an expanded internal claims and appeals process. As mentioned above, the 2010 interim final regulations apply directly to health insurance issuers, in addition to group health plans. The 2010 interim final regulations provide the following standards for internal claims and appeals processes:
Details of the Delay
Technical Release 2011-01 extends the enforcement grace period until plan years beginning on or after January 1, 2012 with respect to the following:
During the grace period, the Departments will not take any enforcement action against a group health plan with respect to these provisions.
As stated above, employers who sponsor fully-insured health plans have little to do on a practical level since the appeals process will generally be administered by the health insurance carrier. Employers who sponsor self-funded plans should work closely with the plan administrator to determine the level of appeal process support the administrator will provide to the employer’s plan to assure compliance within the required timelines.
The views and opinions expressed within are those of the author(s) and do not necessarily reflect the official policy or position of Parker, Smith & Feek. While every effort has been taken in compiling this information to ensure that its contents are totally accurate, neither the publisher nor the author can accept liability for any inaccuracies or changed circumstances of any information herein or for the consequences of any reliance placed upon it.