ERISA regulations contain potentially costly rules
The federal agencies charged with issuing regulations interpreting the law already have started their work.
There are several new requirements. The three most visible, and arguably most important, changes are:
Plan participants also enjoy increased rights during the administrative process. Under PPACA, a plan administrator still must provide a participant with a "full and fair review" and must allow the participant to present evidence. The plan administrator also must provide the claimant with any new evidence considered in connection with the claim and any new rationale on which an adverse benefit determination will be based.
Furthermore, this information must be provided to the claimant in advance of the date on which the notice of an adverse benefit determination is provided.
The complete scope of the "full and fair review" requirement-and, especially, its mandate that a participant be allowed to present evidence-is not entirely clear. Historically, ERISA plans have not permitted participants to present live testimony during the claims administration process. Neither PPACA nor the interim final regulations make clear whether a plan must now offer that option, which could increase the cost of claims administration.
PPACA's changes to the ERISA claims process will affect the majority of plans and apply to plan years beginning after September 23, 2010. Although a complete overhaul of the ERISA claims administration process-feared by many-has not occurred, the interim final regulations nonetheless contain a number of (potentially costly) provisions of which claims administrators should be aware, as they likely will require plan sponsors and plan administrators to amend certain provisions of their plan documents.
This column is written for informational purposes only and should not be construed as legal advice.
Christopher S. Williams is a partner in the litigation practice at the Cleveland, Ohio-based law firm Calfee, Halter & Griswold LLP.
Jeffrey J. Lauderdale is a litigator at Calfee, Halter & Griswold LLP.
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