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Benefits

DOL Explains ERISA Claims Procedure Rules for Authorized Representatives

EBIA  

EBIA  

DOL Information Letter to Jonathan Sistare (Feb. 27, 2019)

Available at https://www.dol.gov/sites/default/files/ebsa/employers-and-advisers/guidance/information-letters/02-27-2019.pdf

The DOL has released an information letter addressing an entity’s ability to act as an authorized representative for participants and beneficiaries in ERISA group health plans. The letter responds to an inquiry made on behalf of an entity that serves as a “patient advocate and healthcare claim recovery expert for plan participants and beneficiaries, both at the initial application stage and when claimants appeal adverse benefit determinations.”

The letter explains that the DOL’s claims procedure regulations set forth minimum requirements for employee benefit plan claims procedures under ERISA. Under the regulations, participants and beneficiaries have the right to appoint authorized representatives to act on their behalf in connection with an initial claim, an appeal of an adverse benefit determination, or both. A plan cannot preclude claimants from designating an authorized representative of their own choosing, but generally may establish reasonable procedures for determining whether an authorized representative has been designated. (A special rule for urgent care claims requires plans to recognize any health care professional with knowledge of a claimant’s medical condition as the claimant’s authorized representative.) Any procedures for designating an authorized representative must be set out in the plan’s claims procedures and in the SPD (or a separate document that accompanies the SPD). Referring to DOL FAQ guidance on claims procedures, the letter notes that when an authorized representative has been designated to act and receive notices on a claimant’s behalf, the plan should direct communications and notices to the authorized representative unless the claimant directs otherwise. Both the claimant and the plan should make clear the extent of the authorized representative’s authority.

EBIA Comment: A plan’s procedure for authorized representative designations may include requiring a written authorization signed by the claimant on a form specified by the plan. And keep in mind that designating an authorized representative is not the same as executing an assignment of benefits, which gives a health care provider the right to receive direct payment from the plan while the participant or beneficiary receives all of the required notifications regarding the claim (see our Checkpoint Question of the Week). Also, because information disclosed to an authorized representative during the claims process will likely contain PHI, it is advisable for the plan to obtain a HIPAA-compliant authorization from the claimant. For more information, see EBIA’s ERISA Compliance manual at Sections XXXIV.D.3 (“Definition of Authorized Representative”), XXXIV.E.1 (“Authorized Representative Paperwork”), XXXIV.G.3 (“Reasonable Procedures for Identifying Authorized Representatives”), and the Sample Appointment of Authorized Representative. See also EBIA’s Self-Insured Health Plans manual at Section XXVI (“Claims and Appeals”) and EBIA’s HIPAA Portability, Privacy & Security manual at Section XXIII.H.4 (“PHI Disclosures to Claimant’s Authorized Representative”).

Contributing Editors: EBIA Staff.

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