Our June 17, 2010 posting discussed the interim regulations on "grandfathered" health plan status under the Patient Protection and Affordable Care Act ("PPACA") and the benefits of maintaining that status. Grandfathered plans are exempt from a host of statutory requirements that apply only to non-grandfathered plans. Until recently, little was known about the additional statutory requirements that apply to non-grandfathered plans. However, the Internal Revenue Service, the Department of Health and Human Services and the Department of Labor (referred to collectively as "the agencies") recently issued interim regulations which explain two of the most significant requirements: (1) the internal claim and appeal and external review processes; and (2) availability of certain preventive health services at no cost. These new requirements will take effect for plan years beginning on or after September 23, 2010.
Internal Claims and Appeals and External Review Processes
On July 23, 2010, the agencies jointly published interim final regulations governing a plan's internal claims and appeals procedures and external review processes. The interim regulations require that non-grandfathered group health plans and health insurance issuers offering such plans have an internal claim and appeal procedure which complies with existing Employee Retirement Income Security Act ("ERISA") regulations (29 C.F.R. §2560.503-1). However, the interim regulations impose several additional requirements over and above existing ERISA regulations, including expedited notification of benefit determinations involving urgent care within 24 hours and additional notice requirements.
Non-grandfathered plans also are subject to external review of claims appeals. Currently, 44 states have laws providing some level of external review. Plans operating in states which already have laws that afford at least the same level of consumer protection as the Uniform Health Carrier External Review Model Act will satisfy the external review requirement. The Model Act is a template statute published by the National Association of Insurance Commissioners ("NAIC"). Plans operating in states that have not adopted Model Act will be subject to either a state-run external review process that complies with the new interim regulations or a comparable federal review process. Pennsylvania state law allows for review of claims only under managed care plans; this process will either be expanded by amendment of the state law or supplemented by the federal review process set forth in the new interim regulations.
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