Appeals Process Guidelines Issued under Early Retiree Reinsurance Program | Practical Law

Appeals Process Guidelines Issued under Early Retiree Reinsurance Program | Practical Law

On October 3, 2011, the Department of Health and Human Services issued operational guidance under the Early Retiree Reinsurance Program (ERRP) addressing the appeals process for employers that participate in the program. Additional guidance addresses notice requirements under the ERRP.

Appeals Process Guidelines Issued under Early Retiree Reinsurance Program

Practical Law Legal Update 4-508-7736 (Approx. 4 pages)

Appeals Process Guidelines Issued under Early Retiree Reinsurance Program

by PLC Employee Benefits & Executive Compensation
Published on 03 Oct 2011 • USA (National/Federal)
On October 3, 2011, the Department of Health and Human Services issued operational guidance under the Early Retiree Reinsurance Program (ERRP) addressing the appeals process for employers that participate in the program. Additional guidance addresses notice requirements under the ERRP.
On October 3, 2011, the Department of Health and Human Services (HHS) issued operational guidance addressing the appeals process under the Early Retiree Reinsurance Program (ERRP), which was established under the Affordable Care Act (ACA).
The ERRP reimburses employers that sponsor participating employment-based plans for a portion of the cost of health benefits for early retirees and their spouses or surviving spouses. The ERRP will end by January 1, 2014, but may effectively end before that date if funding is exhausted, as is likely to be the case.
The guidance addresses the process for employers to appeal initial denials of their reimbursement requests under the ERRP, including:
  • What determinations are and are not appealable.
  • Deadlines for submitting appeal requests.
  • Information about submitting appeal requests, including:
    • required documentation; and
    • how and where to submit appeal requests and supporting documentation.
  • Who makes appeals determinations.
    • what happens in the appeals process;
    • how an appeals determination is made and issued; and
    • what is the effect of a decision.
Under the guidance, employers may appeal adverse reimbursement determinations, which are defined to include:
  • Complete or partial denials of reimbursement requests.
  • Whether an individual listed by the employer as an early retiree for purposes of ERRP reimbursement actually meets the substantive criteria for that classification.
  • Whether a given diagnosis, procedure or other code submitted as part of a reimbursement request is acceptable under the ERRP (that is, the code is for a health benefit under the ERRP guidance).
  • Situations where the employer disagrees with the amount of an initial reimbursement determination (for example, if the employer believes an applicable subsidy amount was incorrectly calculated).
The guidance also addresses situations in which employers may not appeal a determination, for example, if the employer failed to include an item or service as part of its reimbursement request.
Employers must submit appeal requests and supporting documentation within 15 calendar days after receiving an adverse reimbursement determination by using either:
  • Electronic submission, if authorized by the HHS Departmental Appeals Board (Board).
  • US mail or a commercial delivery service.
A request for appeal must contain all information necessary to evaluate the request, including:
  • The e-mail notification of adverse determination.
  • Information about the items and services at issue.
  • Information about the individuals to whom the services were provided.
Although the Board's decision can be reopened and revised in some circumstances, the decision on an appeal is generally final and binding. There is no set time period for when the Board decides an appeal. The Board sends a copy of the decision by e-mail, unless the employer requests otherwise. Special rules apply if ERRP funds are exhausted between the time that an appeal request is submitted and the time when the Board notifies HHS of a decision requiring reimbursement.

Notice Requirements

HHS also updated FAQ guidance indicating that employers must provide a form notice to plan participants. The form notifies plan participants that the terms and conditions of their plan may change due to the plan's participation in the ERRP and that the reimbursements may be used to reduce:
  • Premium contributions.
  • Co-payments.
  • Co-insurance deductibles.
  • Other out-of-pocket costs.
The notice must be delivered within a reasonable amount of time after the employer receives its first reimbursement or after a new plan participant enrolls.
An additional FAQ provides that if an employer has been approved for the ERRP but does not request reimbursement, the employer is encouraged but not required to notify the HHS that it will no longer request reimbursement. Although the employer may no longer request reimbursement, it does not relieve the employer from complying with the ERRP's other requirements.

Practical Considerations

Regarding the appeals process, the guidance notes that an e-mail is considered successfully sent to, and received by, an employer if HHS does not receive a message in return stating that the e-mail was undeliverable. As a result, employers should ensure that their relevant e-mail addresses are current in the ERRP Secure Website. In addition, information that is protected health information under the Health Insurance Portability and Accountability Act must be submitted in compliance with applicable privacy and security laws.
For more information on the ERRP, see Practice Note, Early Retiree Reinsurance Program (ERRP). Also, for information on the HIPAA privacy and security rules, see Practice Notes, HIPAA Privacy Rule, HIPAA Security Rule: Overview and Administrative Safeguards, and HIPAA Security Rule: Physical Safeguards, Technical Safeguards, and Other Issues.