This week in our web log series on best practices in administering benefit claims, we discuss the importance of knowing and, importantly, understanding the laws governing benefit merits administration.

Section 503 of ERISA sets forth the general guidelines for a program'southward claims and appeal procedures.  It requires that a plan provide adequate written notice of the deprival of a claim by a participant or beneficiary (or authorized representative).  The notice has to set forth the specific reasons for the denial and be "written in a manner calculated to be understood by the participant."  ERISA too requires that a program provide a participant whose claim has been denied the opportunity for a "full and off-white review past the advisable named fiduciary." The U.S. Department of Labor'south implementing regulations elaborate on the ERISA claims procedures requirements in much more detail and, in particular, concern the time, notification, and content requirements for each stage of the claims process.

  • What is the timing for an initial merits decision? The regulations provide specific timing requirements for deciding an initial claim; more often than not speaking, a decision regarding a claim must be rendered inside ninety days of receipt of the merits regardless of whether the claim was complete.  That flow can be extended in the case of "special circumstances" provided the claimant is notified of the extension earlier the expiration of the initial period.  In some cases (e. yard., urgent intendance, pre-service, and mail-service claims under a group health plan), the menses may exist shorter than xc days.
  • What information must an adverse claim conclusion include? If the claims fiduciary determines that the claim should exist denied (in whole or in part), that adverse determination has to include the specific reasons for determination, information needed to perfect the claim, references to relevant plan provisions, a statement of the claimant'south correct to relevant documents, a description of the programme's appeal procedures and time limits, and a argument of the claimant's correct to bring suit under ERISA following an adverse benefit determination on appeal.  Additional information may be required when dealing with a group health program or a plan providing disability benefits.
  • What is the timing for decision on appeal? A claimant should be given at least lx days (or 180 days for grouping health plans) to appeal following receipt of an adverse benefit decision discover.  In connectedness with their appeals, claimants should be given the opportunity to submit comments and other documentation related to the claim, and to request whatever documents, records, and data relevant to the claim.
  • Who decides the entreatment and what information must an adverse appeal conclusion include? The aforementioned person or group may generally decide the claim and appeal other than for group health plans where the decision-maker on the appeal must be different from the decision-maker on the claim.  In all cases, the fiduciary responsible for the decision on appeal may not give deference to the initial claim conclusion and should have into account everything submitted in connection with appeal to make its ain decision.  If at that place is an adverse benefit decision on entreatment, the find must comprise much of the aforementioned information as the initial agin claim decision.
  • Special rules for group health plans. There are a number of special rules for grouping health plans, including those noted above and, in certain instances, an external review requirement.  These requirements go well-beyond the scope of this blog.

ERISA's claims regulations weave a circuitous web of rules for a plan's claims and appeal procedures.  Intendance should be taken to (1) review and understand the regulations, and (2) properly document the claims procedures in the program document and summary program clarification.

Next week, we'll discuss the importance of a skillful claims process and a participant'southward obligation to exhaust the claims procedures before commencing an activity for benefits.

You lot tin can find our previously published best practices here:

  • #1 – Know (and Read) Your Plan Document
  • #2 – Know (and Read) Your SPD
  • #three – Dealing with Do good Assignments
Tags: ADVERSE BENEFIT DETERMINATIONS, Benefit Claims, BEST PRACTICES, Merits DENIAL, Claims and appeals procedures, CLAIMS FOR BENEFITS, EMPLOYEE RETIREMENT INCOME SECURITY ACT, ERISA, FULL AND FAIR REVIEW, PLAN, SECTION 502, SECTION 502(A)(1)(B)