10 Tips for Demystifying Your ERISA Health Insurance Plan

10 Tips for Demystifying Your ERISA Health Insurance Plan

  1. Get A Copy Of The Full Health Plan– The complete Plan usually will not be a SBC, SPD (benefit summary) or a print-out from a website. It will be, on average, at least 25-50 pages long. The insurance company or claims administrator will likely not have a copy of the full Health Plan. You can request a copy of the full Health Plan from your Human Resources department.  By law, they are required to give you a copy if requested. A customer service representative for a health insurance company or claims administrator may be able to verify to you what your benefits are over the telephone.  Unfortunately, you cannot rely on what a representative tells you over the phone.
  2. Once You Get A Copy Of Your Full Plan-Read It!– The Plan document controls the benefits available, regardless of what anybody tells you over the phone. This document should contain all coverage levels, claims review procedures, policy exclusions, restrictions etc.. for any and all benefits of the Health Plan.  Read it.
  3. Also Look At The Insurer’s Own Guidelines– Despite the fact that the Health Plan should include all terms of coverage, many times the insurer or claims administrator will apply their own criteria or guidelines to claims decisions. You can find many criteria or guidelines for claims administrators such as BCBS, UHC, Cigna, and Aetna on the internet.
  4. Find Out If Your Health Plan Is Fully Insured Or Self-Insured– Many times ERISA law preempts State Department of Insurance Laws.   Frequently, plans that are funded by an employer must be in compliance with federal ERISA law. Large employers such as Bank of America, and Union Plans, are usually self-insured Plans.
  5. Find Out Who The Plan Administrator Is– Look for a name and address of the Plan Administrator in the Health Plan. If your claim has been denied, send a written request to the Plan Administrator requesting a full and fair review of the denial as well as all plan documents. The Plan Administrator is required to provide the plan documents to you within 30 days. Federal regulations allow you to file a lawsuit to seek penalties from the Plan Administrator in the amount of $110 per day for each day the plan documents are not provided.
  6. Find Out Who Has “Discretionary Authority” To Decide Your Claim– Discretionary Authority usually means that an entity, with “discretion” (claims administrator or insurer), has permission to make decisions about your claims.   An example of discretion in a Plan may be: “Aetna has discretionary authority to determine benefit eligibility and construe the terms of the Plan.” If an entity that has “discretion” is also the entity that pays the claim, then the entity may have a conflict of interest.
  7. Understand the Claims Procedures Of Your Plan– You should be aware of how much time you have to submit a claim and to whom and where you have to submit the Claim.  You should also know the Appeals and Grievance procedures of your Plan.  If your claim is denied, read the appeals or grievance section to determine your appeal rights and deadlines. Generally, the first appeal must be submitted within 180 days of the denial pursuant to ERISA. However, a second level appeal can be a much shorter time period, as little as 30 or 45 days!  This link provides a good overview of ERISA claims procedures and rules: http://www.dol.gov/ebsa/faqs/faq_claims_proc_reg.html
  8. Know The Statute Of Limitations In Your Health Plan– The statute of limitations usually refers to the amount time you have to file a lawsuit to obtain denied benefits. In order to file a lawsuit for benefits pursuant to an ERISA plan, you must first submit appeals (at least one, but no more than two).  This is also known as exhausting your administrative remedy. The statute of limitations may appear in a section titled “Legal Action.”
  9. Know Your Out-Of-Pocket Costs– Annual deductibles, co-pays, and co-insurance can be quite confusing and many times they are applied incorrectly.  Keep track of how much of your own money you are spending.  Read the Explanation of Benefits (EOBs) that the claims administrators or insurers send you.  Compare and calculate the EOBs with your own calculations to ensure your claims are paid in full.
  10. Above All Else, Always Remember To Keep It Simple– If all this seems overwhelming, remember, the law requires the Health Plan to act in YOUR BEST INTEREST.  The laws are clear: “The primary responsibility of the Health Plan is to run the plan solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits and paying plan expenses. In addition, they must follow the terms of plan documents to the extent that the plan terms are consistent with ERISA. They also must avoid conflicts of interest. In other words, they may not engage in transactions on behalf of the plan that benefit parties related to the plan, such as other fiduciaries, services providers, or the plan sponsor”.  http://www.dol.gov/dol/topic/health-plans/fiduciaryresp.htm

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