Employers Take Note, Part Three: Appeals Process Expanded, Reinsurance For Early Retirees In Health Reform

As the Senate proceeds with its debate on health reform, Health Reform Talk continues a series examining health reform provisions that will affect employer-sponsored health plans and would take effect soon after enactment of any legislation. This series will look at features of the legislation already passed in the House (H.R. 3962) and the bill being considered in the Senate (H.R. 3590). These are features likely to survive in health reform legislation and which will directly affect employers. Today an expansion of the employee appeals process and the establishment of a reinsurance program for early retirees are discussed.

Appeals Process

H.R. 3590: Sec. 1001 requires that a group health plan implement an effective appeals process for appeals of coverage determinations and claims, including doing the following:

(1) have in effect an internal claims appeal process;

(2) provide notice to enrollees, in a culturally and linguistically appropriate manner, of available internal and external appeals processes;

(3) allow an enrollee to review a file, to present evidence and testimony as part of the appeals process, and to receive continued coverage pending the outcome of the appeals process; and

(4) provide an external review process for such plans and issuers that includes the consumer protections set forth in the Uniform External Review Model Act from the National Association of Insurance Commissioners.

This provision of Sec. 1001 would take effect for plan years beginning on or after six months after the date of enactment.

H.R. 3962: Sec. 101 has an appeals process for a high risk insurance pool that takes effect on Jan. 1, 2010. Other appeals processes take effect after the Health Insurance Exchange is adopted.

Reinsurance For Early Retirees

H.R. 3590: Sec. 1102 establishes a temporary reinsurance program to provide reimbursement to participating employment-based plans for a portion of the cost of providing health insurance coverage to early retirees (and to the eligible spouses, surviving spouses, and dependents of such retirees). Early retirees are those aged 55-64.

Qualifying employer-based retiree health plans submit claims for reimbursement to the Department of Health and Human Services.  Reimbursements are available for 80% of costs between $15,000 and $90,000. Reimbursement may be used to reduce plan premium costs or to reduce premium contributions, co-payments, deductibles, co-insurance, or other out-of-pocket costs for plan participants. A total of $5 billion is appropriated for this program.

The program would be established within 90 days of enactment and ends on Jan. 1, 2014.

H.R. 3962: Sec. 111 is almost identical to the Senate version; however, the House bill appropriates $10 billion to the program’s operations.