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DOL Issues Regulations Revising Claims Procedures for Group Health and Disability Plans

By Bruce H. Schwartz
  • February 5, 2001

The United States Department of Labor (DOL) recently issued final regulations that substantially revise the minimum requirements for benefits claims procedures for group health and disability plans subject to the Employee Retirement Income Security Act (ERISA). The new regulation represents the first modification to these rules since they were promulgated in 1977 and is applicable for claims filed on or after January 1, 2002.

Time Frames for Decision-making

For group health plans, the time frames differ depending upon the type of claim involved:

  • urgent care claim decisions (involving immediate medical care to avoid seriously jeopardizing the life or health of the claimant) must be decided not later than 72 hours after receipt of the claim; a maximum of 72 hours is permitted for the review of an adverse determination;
  • pre-service claims (involving requests for approval of benefits in advance of receiving medical care) must be decided not later than 15 days from the receipt of a claim; a maximum of 30 days is permitted for the review of an adverse benefit determination;
  • post-service claims (involving requests for approval of benefits after receiving medical care) must be decided not later than 30 days after receipt of the claim; a maximum of 60 days is permitted for the review of an adverse benefit determination;
  • any decision (other than by plan amendment or employment termination) to terminate or reduce benefits that have already been granted must be treated as an adverse benefit determination; and
  • any request for an extension of a course of treatment involving urgent care must be made within 24 hours after receipt of the claim if the claim was made at least 24 hours before the coverage was due to end.

For disability plans, the initial decision must be made not later than 45 days after receipt of the claim; a maximum of 45 days is permitted for review of an adverse benefit determination.

With the exception of urgent care claims, the regulation provides a limited opportunity to extend the period for decision-making in the initial review stage and the appeal stage if the plan administrator determines that the extension is necessary for reasons beyond the control of the plan.

Notice and Disclosure Requirements

The regulations have greatly expanded upon the information that must be disclosed in connection with denials of claims for group health or disability plans. These new rules include:

  • if the plan utilized a specific protocol in denying a claim , either the protocol must be provided in the explanation of the determination or a copy of the protocol must be made available to the claimant free of charge;
  • claims denied on the basis of medical necessity or an experimental treatment must explain the scientific or clinical judgment of the plan as applied to the claimant's medical circumstance or include a statement that an explanation will be provided, free of charge, upon request; and
  • claimants for benefits under both pension and welfare plans may request, free of charge, all documents "relevant" to their claims. For purposes of this rule, "relevant" means any document relied upon by the plan, submitted by the plan, or generated in the course of making the benefit determination, regardless of whether the information was relied upon by the decision-maker.

Claim Appeals

There are additional time frames and standards for the review of group health and disability claims, including the following, among others:

  • claimants are entitled to at least 180 days to file an appeal following receipt of a notification of an adverse benefit determination;
  • if the denial was based (in whole or in part) on a medical judgment, the decision on appeal must be reached in consultation with a health care professional who (i) has appropriate training and experience in the field of medicine, (ii) was not involved in the initial determination, and (iii) is not a subordinate of the decision-maker;
  • the identity of medical or vocational experts whose advise was obtained from the plan must be given, regardless of whether the advice was relied upon in making the determination;
  • mandatory arbitration of a claim can be required, as long as the claimant is not prevented from later challenging the arbitrator's decision in court.

Preemption of State Law

The new regulations provide that a state law will not be superceded by ERISA if the state law establishes an external review procedure that is beyond the scope of the claims procedure regulation. In addition, these state mandated procedures must involve parties other than an insurer, the plan or the plan's fiduciaries.

©2001 Jackson Lewis P.C. This material is provided for informational purposes only. It is not intended to constitute legal advice nor does it create a client-lawyer relationship between Jackson Lewis and any recipient. Recipients should consult with counsel before taking any actions based on the information contained within this material. This material may be considered attorney advertising in some jurisdictions. Prior results do not guarantee a similar outcome.

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