Jump to Content

Department of Labor Regulations

DOL Affect on BCBSM/BCN ERISA and Non-ERISA Underwritten Groups

BCBSM has adopted a two-step appeals process that includes handling both levels of appeals for members.


State law (Michigan Public Act 250) also applies to insured ERISA plans unless it prevents the application of the DOL regulations. For example, PA250 requires BCBSM and BCN to decide appeals of post-service claims within 35 days. Since this rule provides members quicker review times than the DOL regulations and does not prevent compliance with the maximum period of 60 days allowed under the DOL rules for finalizing post-service appeals it will be followed. Therefore, members in insured groups will receive notice of determination on appeal of post-service claims within 35 days.

DOL Affect on BCBSM ERISA Self-Funded Groups

DOL regulations generally affect appeals for self-funded ERISA groups in the following ways:

  • Members must be provided with a "full and fair review" of all adverse benefit decisions
  • A member must be afforded at least 180 days from the initial adverse determination to file an appeal
  • A member must not be required to file more that two appeals before he or she may bring a civil action
  • A person who made the adverse benefit determination that is the subject of the appeal or his subordinate must not conduct the appeal

DOL Affect on BCBSM Non-ERISA Self-Funded Groups

ERISA does not affect the appeal rights for these groups and the Insurance Commissioner has held that self-funded groups are not eligible for PA250. Thus, BCBSM will offer the first and second level of appeals to these groups.


BCBSM offers ERISA groups with Administrative Service Contracts the following three options on handling appeals:

  • Option A — BCBSM handles both levels of appeals for pre-service, urgent care and post-service claims. This means BCBSM handles all administrative work associated with any member appeals.
  • Option B — BCBSM handles the first level and the group handles the second level. BCBSM is willing to provide administrative support for handling these appeals but requires at least 21 calendar days lead time to research the appeal and provide a response to the group. The group is then responsible for communicating the appeals decision to the member within the 30-day timeframe allowed under the DOL regulations.
  • Option C — The group handles both levels of appeals. When a group chooses this option, BCBSM is unable to provide the comprehensive services as in Options A and B. Although the group retains the ability to interpret their health care plan, BCBSM does not have the ability, on the group's behalf, to resolve many of the issues that a group may currently encounter.

DOL Affect on Exception Payments

DOL regulations do not make it possible for BCBSM to authorize exception payments for ERISA groups. ERISA requires all similarly situated participants in a group health plan be treated in the same manner. DOL regulations also require plan fiduciaries (including BCBSM and BCN as claim fiduciaries) to verify that all similarly situated participants in a group health plan are treated in the same manner and that all benefits are paid in accordance with the group's plan documents. Thus, unless the group is willing to amend its benefit plan, as evidenced by a signed exception payment form, no exceptions will be made.


BCBSM will make exception payments for self-funded and ERS groups exempted from ERISA regulations.


Type of group Eligible for Exception Payments?
Area/industry-rated ERISA No
Area/industry-rated non-ERISA No
Experience-rated ERISA No
Experience-rated non-ERISA Yes
ASC ERISA No
ASC non-ERISA Yes

Non-Compliance by BCBSM and BCN

Failure to comply with DOL regulations allows members to initiate civil actions without exhausting the appeal process. In that case, the court will not give deference to the claims determination.