Tuesday, September 7, 2010

Requirement for federal external review process for self-funded plans

In July, the IRS, DOL and HHS issued an Interim Final Rule (IFR) containing expanded rules for internal claims and appeals of those claims. The IFR also covers a state-based external review process, but did not provide complete guidance on the required federally-based external review system.

On August 23, the DOL published Technical Release 2010-01, which creates a safe harbor that will apply to non-grandfathered, self-funded plans that are subject to the federal external review process for plan years beginning on or after September 23, 2010. This interim safe harbor will apply for plan years beginning on or after September 23 until superseded by future guidance on the federal review process that is currently being developed, to be released by July 1, 2011.

While the safe harbor is in effect, the DOL and IRS will not penalize any plan that complies as follows:

Compliance with NAIC Uniform External Review Model Act
The DOL and IRS will not take enforcement action against any plan that complies with the procedures set forth in the Technical Release 2010-01, based on the Uniform Health Carrier External Review Model Act from the National Association of Insurance Commissioners (NAIC).

Compliance with state external review processes
Alternatively, self-insured employers who do business in a state that already has an external review requirement can be exempt from federal requirements if they agree to comply with the state’s existing external review process AND the state agrees to apply its program to self-insured employers.

For more information, click to view the DOL Fact Sheet, NAIC Uniform Health Carrier External Review Model Act, and the Interim Final Rule.

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