Safe Harbor Offered For External Reviews Under Health Reform
Federal agencies have announced the availability of EBSA Technical Release No. 2010-01, which provides an interim enforcement safe harbor for non-grandfathered self-insured group health plans not subject to a State external review process, and therefore subject to the Federal external review process.
The EBSA noted that in the case of health insurance coverage offered in connection with a group health plan, the issuer has primary responsibility to comply with the interim final regulations/ The interim enforcement safe harbor applies for plan years beginning on or after September 23, 2010, and until superseded by future guidance on the Federal external review process that is being developed.
During the period that the interim enforcement safe harbor is in effect, the Department of Labor and the Internal Revenue Service will not take any enforcement action against a self-insured group health plan that complies with either of the following interim compliance methods:
- Compliance with the procedures outlined in Technical Release 2010-01 – The DoL and IRS will not take enforcement action against any plan that complies with the procedures set forth in Technical Release No. 2010-01. These procedures are based on the Uniform Health Carrier External Review Model Act promulgated by the National Association of Insurance Commissioners (NAIC Model Act) in place on July 23, 2010.
- Voluntary compliance with State external review processes – Alternatively, States may choose to expand access to their State external review process to plans that are not subject to the applicable State laws, such as self-insured plans, and such plans may choose to voluntarily comply with the provisions of that State external review process. In such circumstances, while the interim enforcement safe harbor is in effect, the DoL and IRS also will not take enforcement action against a plan that voluntarily complies with the provisions of a State external review process that would not otherwise be applicable or available.
In addition, the notice said that if a plan complies with one of the interim compliance methods, no excise tax liability should be reported on IRS Form 8928 with respect to PHS Act section 2719(b).
During the limited interim enforcement safe harbor period, the Department of Health and Human Services will not take any enforcement action against an issuer that complies with the interim compliance method that will be detailed by HHS on the Office of Consumer Information and Insurance Oversight Web site (http://www.hhs.gov/ociio/). This method will either involve use of a State external appeals process or a temporary process established by HHS.
According to the notice, prior to July 1, 2011, HHS will issue further guidance as to which State external review laws have been determined to satisfy the minimum standards of the NAIC Model Act as identified in 45 CFR §147.136(c). The Departments will issue guidance regarding what process will apply under 26 CFR §54.9815-2719T(d), 29 CFR §2590.715-2719(d), and 45 CFR §147.136(d) no later than July 1, 2011, to replace the interim process.
Model notices, including a notice of adverse benefit determination; a notice of final internal adverse benefit determination; and a notice of final external review decision, that can be used to satisfy the disclosure requirements of the interim final regulations are on http://www.dol.gov/ebsa and http://www.hhs.gov/ociio/
Model language for the description of the internal claims and appeals and external review procedures in the summary plan description provided to participants and beneficiaries will be posted on these Web sites in the future.
For a copy of the Technical Release, go to: