Department of Labor FAQs

General

What is ERISA?

ERISA is an acronym for the Employee Retirement Income Security Act of 1974, as amended. It is a federal law designed to regulate all employer-sponsored benefit plans, including group health plans. With the exception of church groups and government groups, all other employer-sponsored group health plans are subject to ERISA.

What types of claims are affected by DOL regulations?

All pre-service, urgent care and post-service facility, professional, dental, vision, hearing, pharmacy, Master Medical, group Medicare Supplemental claims as well as all claims processed by BCBSM vendors and through our BlueCard program are affected by the regulations.

What are adverse benefit determinations?

An adverse benefit determination is a denial, reduction of or a failure to provide or make payment, in whole or in part, for a benefit, including those based on a determination of eligibility, application of utilization review or medical necessity.

In the event of an adverse determination, what type of notification is sent to the member when BCBSM or BCN is handling all levels of appeal?

If there is an adverse determination, health plans must follow these guidelines:

  • Written or electronic notice of adverse determinations, including explanation of benefits, must state the reason for denial with as much specificity as possible. The notice must contain a description of the plan's review procedures and the time limits applicable to such procedures, including a statement of the member's right to bring a civil action following an adverse benefit determination.
  • When notice of an adverse benefit determination is given, the member must be notified of his or her right to receive upon request and free of charge: internal rules, guidelines, protocols, or other similar criteria relied upon in making the determination. In cases involving medical necessity or experimental treatment, health plans must provide free of charge and explanation of the scientific or clinical judgment for the determination, if requested.

If a member files an appeal of an adverse determination, what type of notification to the member is required?

On appeal, the member must be notified of his or her right to receive all "relevant" information.

Are there any special requirements for health plans in cases involving medical judgment?

In cases involving medical judgment, the health plan must consult with a health care professional who has appropriate training and experience in the field of medicine involved in the judgment. Upon request, the member who filed the claim is entitled to obtain the identity of the medical experts whose advice was given in connection with the adverse benefit determination.

Claims

What is a pre-service claim?

A pre-service claim is a claim requiring pre-approval as a condition of coverage.

How are pre-service claims affected by DOL regulations?

Members are entitled to a notice of the initial determination (whether adverse or not) on a pre-service claim within a reasonable time period, but no longer than 15 calendar days from receipt of the request.


The time period may be extended for 15 calendar days for reasons beyond the plan's control so long as the member is notified of this extension. If the extension is needed due to lack of information, the member has a minimum of 45 calendar days to provide the information. The time period for deciding the pre-service claim is tolled, or stopped temporarily, from the time the extension notice is sent until the information is received.


If a pre-service claim is improperly filed, the plan must provide notice of this failure to the member within five calendar days.

What are urgent claims?

Urgent claims are claims in which the time periods for making non-urgent determination could:

  • Seriously jeopardize the member's life or health or the member's ability regain maximum function, or
  • In the opinion of a physician with knowledge of the member's medical condition, would subject the member to severe pain that cannot be adequately managed without the care of treatment that is the subject of the claim.

How are urgent claims affected by DOL regulations?

Health plans must use a "prudent layperson" standard to determine whether a claim is for urgent care. However, if a physician with knowledge of the member's medical condition determines the claims involves urgent care, the health plan must treat it as such.


If an urgent claim is incomplete or not properly filed, the member must be notified within 24 hours and will have 48 hours to provide the necessary information.


The member is entitled to a notice of the initial determination (whether adverse or not) as soon as possible, taking into account the medical urgency of the case, but no later than 72 hours after receiving the claim. The notice may be provided orally as long as the plan provides a written notice within three day after the oral notice is provided.

What are post-service claims?

Post-service claims are any claims that are not pre-service.

How are post-service claims affected by DOL regulations?

If there is a post-service claim, members are entitled to a notice of an adverse benefit determination within 30 calendar days of receipt. In addition, the time period may be extended for 15 calendar days for reasons beyond the plan's control, so long as the member is notified of this extension. If the extension is needed due to lack of information, the member has a minimum of 45 days to provide the information.

Is concurrent care affected by DOL regulations?

In the case of concurrent care, a reduction or termination of ongoing care is treated as an adverse benefit determination. The member is entitled to sufficient advance notice to allow an appeal before the benefit is reduced or terminated.

Appeals

What is an appeal?

An appeal is a member's request for a review of a pre-service, urgent care or post-service claims that was initially denied by BCBSM or BCN. A first-level appeal is a formal written appeal letter or other written documentation from the member requesting reconsideration of an advised benefit deletion. A second-level appeal is regarded as any time a member submits a second letter to BCBSM, BCN or, for Administrative Services Contact groups handling their own appeals the group, appealing the first-level appeal determination.


Note: Pre- and post-service claim appeals must be filed in writing. Urgent care claim appeals may be requested via the telephone.

How are appeals affected by DOL regulations?

DOL requires, in general, the following:

  • 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

What if there is a conflict between state law and DOL regulations?

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 a quicker review time than the DOL regulations and will 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 continue to receive notice of determination on appeal of post-service claims within 35 days.

Can members have an authorized representative pursue their claim or appeal?

Yes, BCBSM and BCN members may have an authorized representative pursue a claim or appeal. The health plan can establish reasonable procedures for determining whether an individual has been authorized to represent a member. In a claim involving urgent care, the plan must permit a health care professional with knowledge of the member's medical condition to be an authorized representative.


Members may designate in writing anyone they want to be their authorized representative. The following people will not need to produce written consent signed by the member in order to be considered the member's authorized representative:

  • Family members
  • Member's guardian (if not a family member, written proof of guardianship is required)
  • Patient's treating physician or other treating health care professional

All others including agents must sign a Designation of Authorized Representative and Release of Information form. These forms may be obtained by writing to BCBSM.


BCN also requires an authorization from its subscribers.

Timeframes

What are the DOL timeframes for notifying members of determinations on appeals?

The timeframes are:

  • Pre-service claims not later than 30 calendar days after receipt of the request for review (or 15 calendar days for each appeal step)
  • Urgent care claims as soon as possible taking into account the medical urgency but not later than 48 hours after receipt of the request for review.
  • Post-service claims not later than 60 calendar days after receipt of the request for review (or 30 days for each appeal step)

Are extensions permitted for these timeframes on appeal?

No there are no extensions on appeal. If BCBSM does not have additional information within the allowed timeframe, it must make its determination based upon the information it was provided.

Exception Payments

What types of adjustments are considered exception payments?

The following situations will constitute exception payments:

  • Non-contractual benefit payments and/or payment amounts in excess of annual/lifetime maximums
  • Benefit renewal restrictions are not met or coverage maximums have been exceeded
  • Location restrictions are not met
  • Diagnostic restrictions are not met
  • Annual exams provided prior to the renewal date
  • Balance billing situations

What types of adjustments are not considered exception payments?

Adjusting claim payments on appeals that arise from the following situations will not constitute making an exception payment, and may be corrected for all groups:

  • Incorrect processing edits
  • Group files not updated
  • Incorrect benefit information loaded to the processing system
  • Inaccurate information provided to the member in written communications
  • Inaccurate or unclear benefit information given by a BCBSM or BCN representative to a member
  • Services that are a benefit for the account but which cannot be processed by our internal systems