On November 21, 2000, the Department of Labor (DOL) issued final regulations that change the claims procedures for ERISA plans. These regulations were first proposed in 1997 and will replace the current ERISA claims procedures, effective for claims arising on or after January 1, 2002. The regulations provide extensive changes for group health plans and plans that provide disability benefits, but also change the some of the procedures for all other ERISA plans.

As was required under the old claims procedures, ERISA plans must have reasonable claims and appeals procedures that do not unduly burden the participant. The new rules shorten the time frame for deciding claims and provide new standards for appeals of claims. This article will focus on the major changes made in the new regulations and the new terms that apply.

Changes in procedures that apply to all Plans. The following changes in the regulations apply to all ERISA plans:

• Plans cannot impose fees to make or appeal claims.

• Plans must give participants "relevant" (as opposed to "pertinent" documents, records and other information relating to a denied claim.

• A decision that someone is not eligible for the plan can be appealed.

• Denial notices must inform participants of their ability to sue under ERISA and the availability of voluntary appeals.

• All information a claimant submits must be considered, even it was not submitted with the original claim.

• Administrative processes and safeguards must be in place to ensure that claims are processed within the provisions of the governing documents.

Changes that apply to Group Health Plans and Disability plans. The following changes apply to insured and uninsured group health plans, and to disability claims.

• Time periods for notifying participants of adverse determinations with respect to claims have been shortened Instead of having up to 90 days with a 90 day extension, the time periods are as follows:

• Urgent claims: As soon as possible but no later than 72 hours.

• Pre service health claims: No more than 15 days.

• Other health claims: No more than 30 days.

• Disability claims: No more than 45 days.

• The regulations provide for shorter time periods for decisions on appeals:

• Urgent claims: No more than 72 hours

• Pre service claims: No more than 30 days

• Posit service claims: No more than 60 days

• Disability claims: No more than 45 days.

• No more than two appeals can be required before the participant has a right to sue under ERISA. The maximum time for two appeals is the same as one.

• Arbitration provisions are permitted but cannot be binding on the participant.

• Appeals must be decided by someone other than the original person making the decision (or some one who works for that person), with no deference given to the first decision.

• Plans must allow a claimant to see any internal guidance it uses related to acting on the claim.

• Pre authorizations are benefit claims and therefore require notice and appeals.

• Claim notices, in addition to notices of adverse determinations, must be provided within specific time frames. For example, a person must be notified within 5 days if he or she filed a pre-service claim but did not follow the plan’s procedures (24 hours for urgent care). If a person is filing an urgent care claim, he or she must be notified within 24 hours if the claim is missing necessary information.

New definitions or terms. The following terms used in the regulations are defined as described below:

• Health claims are claims arising under group health plans for medical, dental and vision benefits, and apply equally to insured and self insured benefits.

• Disability claims are claims under long term and short term disability plans and may include qualified plans that have a disability provision.

• Claims is a term that is very broadly defined and includes any request for a plan benefit.

• Adverse determination includes denial, reduction or termination of payment and includes denials due to ineligibility.

• Urgent care claims are any medical claims that have to be decided quickly because a delay could seriously jeopardize the life or health of the person or in the opinion of a doctor with knowledge of the person’s condition, a delay would subject the person to severe pain that cannot be managed without the requested treatment.

• Pre-service claims are claims that require approval before the care is rendered.

• Concurrent care decision are where a plan approved a treatment and is now reducing or terminating that coverage

• Post service claims are anything else.