What is ERISA?

What is ERISA?

The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans.

When a company self insures their health plan it falls under ERISA laws. The plan may be administered by a large insurer such as Blue Cross, and may appear to be a Blue Cross or other insurance plan. When calling for verification and authorization ask if this is an ERISA plan. If yes, ask for their filing guidelines and request that they fax you an authorized representative form to be signed by the patient.

Typically, but not always, ERISA preempts state law.

There is no preemption if the state law:

  • Seeks to regulate insurance
  • Does not conflict with an ERISA law
  • Does not give a claimant more benefits than the ERISA law provides

(29 CFR 2560.503-1(K)(1)-Nothing in this section shall be construed to supersede any State law that regulates insurance, except to the extent that such law prevents the application of the section (claim procedure)).

Examples:

Exempt from State Law
Coverage for mental health, optometrist
Alcoholism benefits
Coverage for infants from time of birth
Continuation of coverage

Not exempt
Improper claims processing
Wrongful denial of benefits
Bad faith refusal to pay
Unfair insurance practices

If you have a contract with the insurance company, look to the terms of the contract. If they are silent or vague, follow the ERISA claims procedures.

If an ERISA plan denies your claim, they must give:

  • Specific reasons for the adverse determination
  • Reference to the specific plan provisions
  • Description of any additional information necessary for the claimant to perfect the claim
  • Description of the plan’s review procedures and the time limits, including a statement of the claimant’s right to bring a civil suit under section 502(a) after an adverse benefit determination on review

An ordinary Assignment of Benefits does not allow a provider to represent the patient on an ERISA plan. The AOB should contain language designating the provider as the “authorized representative.” The individual plan may dictate the language required to designate an “authorized representative.”

Refunds are not required by ERISA-
The Court in National Benefit Administrators v. Mississippi Methodist Hospital, 748 F. Supp.459 (S.D. Miss 1990) Held that the Employee health benefits plan was not entitled to a refund of money erroneously paid to the third-party health care provider; the health care provider neither knew nor had reason to know of the employee’s misrepresentation of facts to the plan administrator, and was not unjustly enriched by its receipt of payment for medical services provided.

Links of interest:

http://www.dol.gov/ebsa/publications/how_to_file_claim.html
www.freeerisa.com

 
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