ERISA Alert – New Regulations Concerning Notices of Adverse Benefit Determination on an EOB for Medical Payments
The Department of Labor (DOL) issued final regulations effective April 1, 2018, that revise the claims procedure regulations under ERISA for employee benefit plans providing disability benefits. In its final regulations, the DOL also indicated that notices of adverse benefit determinations on review FOR OTHER BENEFIT TYPES (emphasis added) would be required to include some disclosure about any applicable contractual limitations period.
The controlling judicial precedent and the individual facts and circumstances will dictate the language utilized; however, the DOL regulations consider the inclusion of the information in Paragraph (j)(4)(ii) below to be appropriate disclosures for all plan types.
Paragraph (j)(4)(i) of the DOL regulations provides:
“(ii) In the case of a plan providing disability benefits in addition to the information described in Paragraph (j)(4)(i) of this section, the statement of the claimant’s rights to bring such an action under section 502(a) of this Act shall also describe any applicable contractual limitations period that applies to the claimant’s right to bring such an action, including the calendar date on which the contractual limitations period expires for the claim.
(5) In the case of a group health plan -”
While this is blank in the regulation, again reference is made to the introductory paragraph of the DOL regulation.
This issue has not been directly addressed in all of the circuits of the United States. Prior to the issuance of the new regulations, there had been a split in authority. The 1st, 3rd and 6th Circuits have held that providers must include the procedure/time limitations for judicial review and that the failure to do so invalidates the limitation, providing a “free pass” for the Covered Person.
The 11th Circuit has indicated that the EOB should provide the administrative rule procedure, but it has not found that the language must be incorporated in the EOB. However, in that particular case, the Covered Person waited four years to raise the issue.
The 2nd, 5th, 9th and 10th Circuits have held to the contrary.
Citations of these cases are as follows:
First Circuit – Santana- Diaz v. Metropolitan Life Insurance Company, 816 F .3d 172 (1st Cir. 2016).
Second Circuit – Heimeshoff v. Hartland Life & Accident Insurance Company, 496 Fed. Appx. 129 (2nd 2d Cir. 2012), aff’d J. 60. 604 (2013).
Third Circuit – Mirza v. Insurance Administration of America, Inc., 800 F .3d 129 (3d Cir. 2015).
Fifth Circuit – McGowan v. New Orleans Emplr’s Int'l Longshoreman's Ass'n, AFL-CIO., 538 F .App’x. 495 (5th Cir. 2013).
Sixth Circuit – Moyer v. Metropolitan Life Ins. Co. 762 F .3d 503 (6th Cir. 2014)
Ninth Circuit – Scharff v. Raytheon Company Short-Term Disability Plan, 581 F .3d 899 (9th Cir. 2009).
Tenth Circuit – Holmes v. Colorado Coalition for Homeless Long Disability Plan 762 F .3d 1196 (10th Cir. 2014) – It should be noted that this case indicated that the Defendant complied without going further.
Eleventh Circuit – Wilson v. The Standard Insurance Company, 613 Fed. Appx. 841 (11th Cir. 2015).
We suggest including the date for appealing an adverse determination on the EOBS. There is no harm in doing so; only a benefit.
If you have any questions about this Alert, please contact the author listed below or the Aronberg Goldgehn attorney with whom you normally consult:
Mitchell J. Melamed