PWBA Field Office Press Release

PENSION AND WELFARE BENEFITS ADMINISTRATION USDL: 01-6

LABOR DEPARTMENT ISSUES RULES STRENGTHENING WORKERS’ HEALTH BENEFIT RIGHTS

New rules announced today by the U. S. Department of Labor will ensure workers quick processing of health insurance claims and timely decisions on appeals when claims are denied. The rules cover health plans offered by employers and covered by the Employee Retirement Income Security Act, known as ERISA.

“More than 130 million people in employer-based health plans will be able to count on a faster, fairer and more informed process for handling their claims and appeals to pay benefits,” Secretary of Labor Alexis M. Herman said. “This final rule was directed by President Clinton and is based on recommendations from the President’s Advisory Commission on Consumer Protection and Quality in Health Care, which called for better disclosure of information about health benefits and a fair and efficient system for resolving disputed claims for health benefits.”

The final rule will be published in tomorrow’s Federal Register. It is the first change in rules governing the claims and appeals process in 20 years. The Labor Department published proposed claims procedures in September 1998 and held a hearing on the proposal in February 1999.

The new rule covering ERISA-governed health plans:

• requires timely coverage and appeal decisions;
• provides meaningful information to patients about their rights under the appeals process; and
• creates a more fair process to review decisions to deny benefits.

The final rule provides for:

• faster decisions on initial claims and appealed claims, with time frames based on whether the claims are pre-service and post-service;
• special rules requiring expeditious consideration of claims involving “urgent care”;
• more time for patients to appeal denied health claims;
• different decision maker to handle appeals; consultation with relevant health care professionals in making decisions about appeals that involve medical judgment;
• enforcement of claimants rights through the court;
• timely action on “concurrent care reviews” for patients receiving a course of treatment who face early termination of benefits or have a need to extend treatment;
• fuller disclosure, including a full decision of the plan’s claim procedures; and
• more information about the reasons for a denied claim and the criteria and rules applied by the plan.

In addition, the department will publish tomorrow final amendments to its regulation governing the contents of summary plan descriptions to update and clarify specifically what information must be disclosed to workers and their families about their health plans. The final rule also covers plan descriptions that affect both pension and welfare benefit plans. It further adopts in final form regulations that were effective on an interim basis implementing certain amendments to ERISA’s disclosure rules that were enacted as part of the Health Insurance Portability and Accountability Act and the Newborns’ and Mothers’ Health Protection Act.

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