[Federal Register Volume 75, Number 165 (Thursday, August 26, 2010)]
[Notices]
[Pages 52597-52599]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-21206]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

RIN 1545-BJ63

DEPARTMENT OF LABOR

Employee Benefits Security Administration

RIN 1210-AB45

DEPARTMENT OF HEALTH AND HUMAN SERVICES

RIN 0991-AB70


Availability of Interim Procedures for Federal External Review 
and Model Notices Relating to Internal Claims and Appeals and External 
Review Under the Patient Protection and Affordable Care Act; Notice

AGENCY: Internal Revenue Service, Department of the Treasury; Employee 
Benefits Security Administration, Department of Labor; Office of 
Consumer Information and Insurance Oversight, Department of Health and 
Human Services.

ACTION: Notice.

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SUMMARY: This document announces the availability of guidance detailing 
interim procedures for the Federal external review process and model 
notices both for internal claims and appeals and for external review 
processes under the Patient Protection and Affordable Care Act.

FOR FURTHER INFORMATION CONTACT: Amy Turner or Beth Baum, Employee 
Benefits Security Administration, Department of Labor, at (202) 693-
8335; Karen Levin, Internal Revenue Service, Department of the 
Treasury, at (202) 622-6080; Ellen Kuhn, Office of Consumer Information 
and Insurance Oversight, Department of Health and Human Services, at 
(301) 492-4100.
    Customer Service Information: Individuals interested in obtaining

[[Page 52598]]

information from the Department of Labor concerning employment-based 
health coverage laws may call the EBSA Toll-Free Hotline at 1-866-444-
EBSA (3272) or visit the Department of Labor's Web site (http://www.dol.gov/ebsa). In addition, information from HHS on private health 
insurance for consumers can be found on the Centers for Medicare & 
Medicaid Services (CMS) Web site (http://www.cms.hhs.gov/HealthInsReformforConsume/01_Overview.asp) and information on health 
reform can be found at http://www.hhs.gov/ociio/ and http://www.healthcare.gov.

SUPPLEMENTARY INFORMATION:

I. Background

    The Patient Protection and Affordable Care Act (the Affordable Care 
Act), Public Law 111-148, was enacted on March 23, 2010; the Health 
Care and Education Reconciliation Act (the Reconciliation Act), Public 
Law 111-152, was enacted on March 30, 2010. The Affordable Care Act and 
the Reconciliation Act reorganize, amend, and add to the provisions of 
part A of title XXVII of the Public Health Service Act (PHS Act) 
relating to group health plans and health insurance issuers in the 
group and individual markets. The Affordable Care Act adds section 
715(a)(1) to the Employee Retirement Income Security Act (ERISA) and 
section 9815(a)(1) to the Internal Revenue Code (the Code) to 
incorporate the provisions of part A of title XXVII of the PHS Act into 
ERISA and the Code, and make them applicable to group health plans, and 
health insurance issuers providing health insurance coverage in 
connection with group health plans. The Departments of Labor, Health 
and Human Services, and the Treasury (the Departments) have been 
issuing regulations in several phases to implement the revised PHS Act 
sections 2701 through 2719A and related provisions of the Affordable 
Care Act.
    Section 2719 of the PHS Act applies to group health plans and 
health insurance coverage that are not grandfathered health plans 
within the meaning of section 1251 of the Affordable Care Act.\1\ It 
sets forth standards for plans and issuers regarding both internal 
claims and appeals and external review. The Departments published 
interim final regulations implementing PHS Act section 2719 on July 23, 
2010, at 75 FR 43330 (the interim final regulations). In general, the 
interim final regulations require plans and issuers to comply with the 
requirements of 29 CFR 2560.503-1 (the DOL claims procedure regulation) 
and impose specified additional standards for internal claims and 
appeals.
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    \1\ The Departments published interim final regulations 
implementing section 1251 of the Affordable Care Act on June 17, 
2010, at 75 FR 34538.
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    Section 2719 of the PHS Act provides that plans and issuers in 
States without an applicable State external review process shall 
implement an effective external review process that meets minimum 
standards established by the Secretary through guidance and that is 
similar to a State external review process described in PHS Act Section 
2719(b)(1). The statute and the interim final regulations also provide 
a basis for determining when plans and issuers must comply with an 
applicable State external review process and when they must comply with 
the Federal external review process. Generally, if a State has an 
external review process that meets, at a minimum, the consumer 
protections set forth in the interim final regulations, an issuer (or a 
plan) subject to the State process must comply with the State process. 
The regulations include a transition period for plan years (in the 
individual market, policy years) beginning before July 1, 2011, during 
which the Department of Health and Human Services (HHS) will work 
individually with States on an ongoing basis to assist in making any 
necessary changes to incorporate additional consumer protections so 
that the State process will continue to apply after the end of the 
transition period. For plans and issuers not subject to an existing 
State external review process (including self-insured plans), a Federal 
process is to apply for plan years (in the individual market, policy 
years) beginning on or after September 23, 2010.
    The preamble to the interim final regulations provided that the 
Departments would issue additional guidance on the Federal external 
review process. In addition, the preamble stated that the Departments 
would issue model notices that could be used to satisfy the notice 
requirements under the interim final regulations. This notice announces 
the availability of and provides links to guidance on the interim 
Federal external review process, as well as links to the model notices.

II. Interim Federal External Review Process for Self-Insured Group 
Health Plans

    This notice announces the availability of EBSA Technical Release 
No. 2010-01, which provides an interim enforcement safe harbor for non-
grandfathered self-insured group health plans not subject to a State 
external review process, and therefore subject to the Federal external 
review process. (In the case of health insurance coverage offered in 
connection with a group health plan, the issuer has primary 
responsibility to comply with the interim final regulations.) This 
interim enforcement safe harbor applies for plan years beginning on or 
after September 23, 2010 and until superseded by future guidance on the 
Federal external review process that is being developed and that will 
apply after this interim period. During the period that this interim 
enforcement safe harbor is in effect, the Department of Labor and the 
Internal Revenue Service will not take any enforcement action against a 
self-insured group health plan that complies with either of the 
following interim compliance methods (and if a plan complies with one 
of the interim compliance methods of this notice, no excise tax 
liability should be reported on IRS Form 8928 with respect to PHS Act 
section 2719(b)):
    <bullet> Compliance with the procedures outlined in Technical 
Release 2010-01. The Department of Labor and the Internal Revenue 
Service will not take enforcement action against any plan that complies 
with the procedures set forth in Technical Release No. 2010-01. These 
procedures are based on the Uniform Health Carrier External Review 
Model Act promulgated by the National Association of Insurance 
Commissioners (NAIC Model Act) in place on July 23, 2010.\2\ The 
Technical Release is available today on the Department of Labor's Web 
site at: http://www.dol.gov/ebsa.
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    \2\ Even though these procedures are based on the NAIC Model 
Act, they do not include all the consumer protections of the NAIC 
Model Act. For example, the procedures set forth in this notice do 
not include the special provisions for claims relating to 
experimental or investigational treatment and do not include a 
government agency certifying and assigning independent review 
organizations. The NAIC Model Act is available at http://www.dol.gov/ebsa and http://www.hhs.gov/ociio/. Future guidance will 
address the minimum consumer protections required under the Federal 
external review process after the interim enforcement safe harbor 
period.
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    <bullet> Voluntary compliance with State external review processes. 
Alternatively, States may choose to expand access to their State 
external review process to plans that are not subject to the applicable 
State laws, such as self-insured plans, and such plans may choose to 
voluntarily comply with the provisions of that State external review 
process. In such circumstances, while the interim enforcement safe 
harbor is in effect, the Department of Labor and

[[Page 52599]]

the Internal Revenue Service also will not take enforcement action 
against a plan that voluntarily complies with the provisions of a State 
external review process that would not otherwise be applicable or 
available.
    The Departments will issue guidance regarding what process will 
apply under 26 CFR 54.9815-2719T(d), 29 CFR 2590.715-2719(d), and 45 
CFR 147.136(d) no later than July 1, 2011 to replace the interim 
process.

III. Interim Federal External Review Process for Issuers

    For issuers in the individual market and the small group and large 
group health insurance markets (including fully-insured group health 
plans), there will be an interim enforcement safe harbor which will 
apply only for plan years (in the individual market, policy years) 
beginning on or after September 23, 2010 and until superseded by future 
guidance on the Federal external review process that is being developed 
and that will apply after this interim period. During this limited 
interim enforcement safe harbor period, HHS will not take any 
enforcement action against an issuer that complies with the interim 
compliance method that will be detailed by HHS on the Office of 
Consumer Information and Insurance Oversight Web site (http://www.hhs.gov/ociio/). This method will either involve use of a State 
external appeals process or a temporary process established by HHS.
    Prior to July 1, 2011, HHS will issue further guidance as to which 
State external review laws have been determined to satisfy the minimum 
standards of the NAIC Model Act as identified in 45 CFR 147.136(c). The 
Departments will issue guidance regarding what process will apply under 
26 CFR 54.9815-2719T(d), 29 CFR 2590.715-2719(d), and 45 CFR 147.136(d) 
no later than July 1, 2011 to replace the interim process.

IV. Model Notices

    Model notices that can be used to satisfy the disclosure 
requirements of the interim final regulations \3\ are being posted on 
the Department of Labor's Web site at http://www.dol.gov/ebsa and the 
Department of HHS/Office of Consumer Information and Insurance 
Oversight Web site at http://www.hhs.gov/ociio/. These models include:
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    \3\ For rules regarding the form and manner of notice, see 26 
CFR 54.9815-2719T(e), 29 CFR 2590.715-2719(e), and 45 CFR 
147.136(e).
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    (1) A notice of adverse benefit determination;
    (2) A notice of final internal adverse benefit determination; and
    (3) A notice of final external review decision.
    Model language for the description of the internal claims and 
appeals and external review procedures in the summary plan description 
provided to participants and beneficiaries will be posted on these 
websites in the future.
    Please note that the Departments accounted for the actual costs of 
the external appeal process taking into account the model notices when 
the interim final regulations were issued.

    Signed: August 19, 2010.
Sarah Hall Ingram,
Acting Deputy Commissioner for Services and Enforcement, Internal 
Revenue Service.
    Signed: August 20, 2010.
Michael L. Davis,
Deputy Assistant Secretary, Employee Benefits Security Administration, 
Department of Labor.
    Dated: August 20, 2010.
Jay Angoff,
Director, Office of Consumer Information and Insurance Oversight.
[FR Doc. 2010-21206 Filed 8-23-10; 11:15 am]
BILLING CODE 4830-01-P; 4510-29-P; 4120-01-P