DOL Extends Transition Period for NAIC-similar State External Review Procedures | Practical Law

DOL Extends Transition Period for NAIC-similar State External Review Procedures | Practical Law

The Department of Labor (DOL) issued Technical Release 2013-01, which extends until January 1, 2016, the applicability of temporary NAIC-similar state external review procedures under the Affordable Care Act (ACA).

DOL Extends Transition Period for NAIC-similar State External Review Procedures

Practical Law Legal Update 1-525-2394 (Approx. 4 pages)

DOL Extends Transition Period for NAIC-similar State External Review Procedures

by PLC Employee Benefits & Executive Compensation
Published on 18 Mar 2013 • USA (National/Federal)
The Department of Labor (DOL) issued Technical Release 2013-01, which extends until January 1, 2016, the applicability of temporary NAIC-similar state external review procedures under the Affordable Care Act (ACA).
On March 15, 2013, the DOL issued Technical Release 2013-01, which extends until January 1, 2016, the applicability of temporary NAIC-similar state external review procedures included in prior Affordable Care Act (ACA) guidance. Under the extension, states that have already satisfied NAIC-similar procedures will continue to be considered compliant with those standards until January 1, 2016.
The ACA requires nongrandfathered group health plans and insurers to comply with additional requirements and procedures involving:
Under the external review rules, group health plans and insurers must comply with a state's external review procedures if those procedures include certain minimum protections:
  • Set forth in the Uniform Health Carrier External Review Model Act issued by the National Association of Insurance Commissioners (NAIC).
  • Reflected in interim final regulations issued in July 2010 and amended in June 2011.
If a state's external review procedures do not meet the minimum protections, the plans and insurers must implement an external review process that satisfies minimum standards set by the DOL in guidance. The DOL provided these standards in Technical Release 2011-02 (June 2011), which included standards:
  • Similar to the consumer protections in the NAIC's Uniform Health Carrier External Review Model Act (the NAIC-similar process).
  • Applicable until January 1, 2014.
Technical Release 2013-01 extends the transitional period under Technical Release 2011-02 until January 1, 2016, and clarifies that:
  • Insurers (and self-insured, nonfederal governmental plans, if applicable) will be considered to comply with the minimum standards for state external review procedures under the interim final regulations, as amended, until January 1, 2016, if they comply with a state external review process that meets the NAIC-similar process standards in Technical Release 2011-02. This is true even if the procedures do not meet all the protections under the interim final regulations.
  • Starting January 1, 2016:
    • state external review procedures must satisfy the minimum standards under the interim final regulations, as amended; or
    • insurers (and self-insured, nonfederal governmental plans, if applicable) must comply with a federally-administered external review process.
According to the DOL, Technical Release 2013-01 is intended to:
  • Give states additional time to bring their state external review procedures into compliance with the standards for an NAIC-parallel process.
  • Serve as a bridge until additional clarification regarding state standards for external review is issued.
The DOL expects to provide additional clarification regarding the state standards for external review that reflects comments on the July 2010 regulations, as amended, and subsequent guidance.
For additional information on external review requirements under the ACA, see Practice Note, External Review under the ACA.