29 CFR 2560.503-1 - Claims procedure. 

 

    * Section Number: 2560.503-1

    * Section Name: Claims procedure. 

 

        (a) Scope and purpose. In accordance with the authority of sections

    503 and 505 of the Employee Retirement Income Security Act of 1974

    (ERISA or the Act), 29 U.S.C. 1133, 1135, this section sets forth

    minimum requirements for employee benefit plan procedures pertaining to

    claims for benefits by participants and beneficiaries (hereinafter

    referred to as claimants). Except as otherwise specifically provided in

    this section, these requirements apply to every employee benefit plan

    described in section 4(a) and not exempted under section 4(b) of the

    Act.

        (b) Obligation to establish and maintain reasonable claims

    procedures.

    Every employee benefit plan shall establish and maintain reasonable

    procedures governing the filing of benefit claims, notification of

    benefit determinations, and appeal of adverse benefit determinations

    (hereinafter collectively referred to as claims procedures). The claims

    procedures for a plan will be deemed to be reasonable only if--

        (1) The claims procedures comply with the requirements of

    paragraphs (c), (d), (e), (f), (g), (h), (i), and (j) of this section,

    as appropriate, except to the extent that the claims procedures are

    deemed to comply with some or all of such provisions pursuant to

    paragraph (b)(6) of this section;

        (2) A description of all claims procedures (including, in the case

    of a group health plan within the meaning of paragraph (m)(6) of this

    section, any procedures for obtaining prior approval as a prerequisite

    for obtaining a benefit, such as preauthorization procedures or

    utilization review procedures) and the applicable time frames is

    included as part of a summary plan description meeting the requirements

    of 29 CFR 2520.102-3;

        (3) The claims procedures do not contain any provision, and are not

    administered in a way, that unduly inhibits or hampers the initiation

    or processing of claims for benefits. For example, a provision or

    practice that requires payment of a fee or costs as a condition to

    making a claim or to appealing an adverse benefit determination would

    be considered to unduly inhibit the initiation and processing of claims

    for benefits. Also, the denial of a claim for failure to obtain a prior

    approval under circumstances that would make obtaining such prior

    approval impossible or where application of the prior approval process

    could seriously jeopardize the life or health of the claimant (e.g., in

    the case of a group health plan, the claimant is unconscious and in

    need of immediate care at the time medical treatment is required) would

    constitute a practice that unduly inhibits the initiation and

    processing of a claim;

        (4) The claims procedures do not preclude an authorized

    representative of a claimant from acting on behalf of such claimant in

    pursuing a benefit claim or appeal of an adverse benefit determination.

    Nevertheless, a plan may establish reasonable procedures for

    determining whether an individual has been authorized to act on behalf

    of a claimant, provided that, in the case of a claim involving urgent

    care, within the meaning of paragraph (m)(1) of this section, a health

    care professional, within the meaning of paragraph (m)(7) of this

    section, with knowledge of a claimant's medical condition shall be

    permitted to act as the authorized representative of the claimant; and

        (5) The claims procedures contain administrative processes and

    safeguards designed to ensure and to verify that benefit claim

    determinations are made in accordance with governing plan documents and

    that, where appropriate, the plan provisions have been applied

    consistently with respect to similarly situated claimants.

        (6) In the case of a plan established and maintained pursuant to a

    collective bargaining agreement (other than a plan subject to the

    provisions of section 302(c)(5) of the Labor Management Relations Act,

    1947 concerning joint representation on the board of trustees)--

        (i) Such plan will be deemed to comply with the provisions of

    paragraphs (c) through (j) of this section if the collective bargaining

    agreement pursuant to which the plan is established or maintained sets

    forth or incorporates by specific reference--

        (A) Provisions concerning the filing of benefit claims and the

    initial disposition of benefit claims, and

        (B) A grievance and arbitration procedure to which adverse benefit

    determinations are subject.

        (ii) Such plan will be deemed to comply with the provisions of

    paragraphs (h), (i), and (j) of this section (but will not be deemed to

    comply with paragraphs (c) through (g) of this section) if the

    collective bargaining agreement pursuant to which the plan is

    established or maintained sets forth or incorporates by specific

    reference a grievance and arbitration procedure to which adverse

    benefit determinations are subject (but not provisions concerning the

    filing and initial disposition of benefit claims).

        (c) Group health plans. The claims procedures of a group health

    plan will be deemed to be reasonable only if, in addition to complying

    with the requirements of paragraph (b) of this section--

        (1)(i) The claims procedures provide that, in the case of a failure

    by a claimant or an authorized representative of a claimant to follow

    the plan's procedures for filing a pre-service claim, within the

    meaning of paragraph (m)(2) of this section, the claimant or

    representative shall be notified of the failure and the proper

    procedures to be followed in filing a claim for benefits. This

    notification shall be provided to the claimant or authorized

    representative, as appropriate, as soon as possible, but not later than

    5 days (24 hours in the case of a failure to file a claim involving

    urgent care) following the failure. Notification may be oral, unless

    written notification is requested by the claimant or authorized

    representative.

        (ii) Paragraph (c)(1)(i) of this section shall apply only in the

    case of a failure that--

        (A) Is a communication by a claimant or an authorized

    representative of a claimant that is received by a person or

    organizational unit customarily responsible for handling benefit

    matters; and

        (B) Is a communication that names a specific claimant; a specific

    medical condition or symptom; and a specific treatment, service, or

    product for which approval is requested.

        (2) The claims procedures do not contain any provision, and are not

    administered in a way, that requires a claimant to file more than two

    appeals of an adverse benefit determination prior to bringing a civil

    action under section 502(a) of the Act;

        (3) To the extent that a plan offers voluntary levels of appeal

    (except to the extent that the plan is required to do so by State law),

    including voluntary arbitration or any other form of dispute

    resolution, in addition to those permitted by paragraph (c)(2) of this

    section, the claims procedures provide that:

        (i) The plan waives any right to assert that a claimant has failed

    to exhaust administrative remedies because the claimant did not elect

    to submit a benefit dispute to any such voluntary level of appeal

    provided by the plan;

        (ii) The plan agrees that any statute of limitations or other

    defense based on timeliness is tolled during the time that any such

    voluntary appeal is pending;

        (iii) The claims procedures provide that a claimant may elect to

    submit a benefit dispute to such voluntary level of appeal only after

    exhaustion of the appeals permitted by paragraph (c)(2) of this

    section;

        (iv) The plan provides to any claimant, upon request, sufficient

    information relating to the voluntary level of appeal to enable the

    claimant to make an informed judgment about whether to submit a benefit

    dispute to the voluntary level of appeal, including a statement that

    the decision of a claimant as to whether or not to submit a benefit

    dispute to the voluntary level of appeal will have no effect on the

    claimant's rights to any other benefits under the plan and information

    about the applicable rules, the claimant's right to representation, the

    process for selecting the decisionmaker, and the circumstances, if any,

    that may affect the impartiality of the decisionmaker,

    such as any financial or personal interests in the result or any past

    or present relationship with any party to the review process; and

        (v) No fees or costs are imposed on the claimant as part of the

    voluntary level of appeal.

        (4) The claims procedures do not contain any provision for the

    mandatory arbitration of adverse benefit determinations, except to the

    extent that the plan or procedures provide that:

        (i) The arbitration is conducted as one of the two appeals

    described in paragraph (c)(2) of this section and in accordance with

    the requirements applicable to such appeals; and

        (ii) The claimant is not precluded from challenging the decision

    under section 502(a) of the Act or other applicable law.

        (d) Plans providing disability benefits. The claims procedures of a

    plan that provides disability benefits will be deemed to be reasonable

    only if the claims procedures comply, with respect to claims for

    disability benefits, with the requirements of paragraphs (b), (c)(2),

    (c)(3), and (c)(4) of this section.

        (e) Claim for benefits. For purposes of this section, a claim for

    benefits is a request for a plan benefit or benefits made by a claimant

    in accordance with a plan's reasonable procedure for filing benefit

    claims. In the case of a group health plan, a claim for benefits

    includes any pre-service claims within the meaning of paragraph (m)(2)

    of this section and any post-service claims within the meaning of

    paragraph (m)(3) of this section.

        (f) Timing of notification of benefit determination. (1) In

    general. Except as provided in paragraphs (f)(2) and (f)(3) of this

    section, if a claim is wholly or partially denied, the plan

    administrator shall notify the claimant, in accordance with paragraph

    (g) of this section, of the plan's adverse benefit determination within

    a reasonable period of time, but not later than 90 days after receipt

    of the claim by the plan, unless the plan administrator determines that

    special circumstances require an extension of time for processing the

    claim. If the plan administrator determines that an extension of time

    for processing is required, written notice of the extension shall be

    furnished to the claimant prior to the termination of the initial 90-

    day period. In no event shall such extension exceed a period of 90 days

    from the end of such initial period. The extension notice shall

    indicate the special circumstances requiring an extension of time and

    the date by which the plan expects to render the benefit determination.

        (2) Group health plans. In the case of a group health plan, the

    plan administrator shall notify a claimant of the plan's benefit

    determination in accordance with paragraph (f)(2)(i), (f)(2)(ii), or

    (f)(2)(iii) of this section, as appropriate.

        (i) Urgent care claims. In the case of a claim involving urgent

    care, the plan administrator shall notify the claimant of the plan's

    benefit determination (whether adverse or not) as soon as possible,

    taking into account the medical exigencies, but not later than 72 hours

    after receipt of the claim by the plan, unless the claimant fails to

    provide sufficient information to determine whether, or to what extent,

    benefits are covered or payable under the plan. In the case of such a

    failure, the plan administrator shall notify the claimant as soon as

    possible, but not later than 24 hours after receipt of the claim by the

    plan, of the specific information necessary to complete the claim. The

    claimant shall be afforded a reasonable amount of time, taking into

    account the circumstances, but not less than 48 hours, to provide the

    specified information. Notification of any adverse benefit

    determination pursuant to this paragraph (f)(2)(i) shall be made in

    accordance with paragraph (g) of this section. The plan administrator

    shall notify the claimant of the plan's benefit determination as soon

    as possible, but in no case later than 48 hours after the earlier of--

        (A) The plan's receipt of the specified information, or

        (B) The end of the period afforded the claimant to provide the

    specified additional information.

        (ii) Concurrent care decisions. If a group health plan has approved

    an ongoing course of treatment to be provided over a period of time or

    number of treatments--

        (A) Any reduction or termination by the plan of such course of

    treatment (other than by plan amendment or termination) before the end

    of such period of time or number of treatments shall constitute an

    adverse benefit determination. The plan administrator shall notify the

    claimant, in accordance with paragraph (g) of this section, of the

    adverse benefit determination at a time sufficiently in advance of the

    reduction or termination to allow the claimant to appeal and obtain a

    determination on review of that adverse benefit determination before

    the benefit is reduced or terminated.

        (B) Any request by a claimant to extend the course of treatment

    beyond the period of time or number of treatments that is a claim

    involving urgent care shall be decided as soon as possible, taking into

    account the medical exigencies, and the plan administrator shall notify

    the claimant of the benefit determination, whether adverse or not,

    within 24 hours after receipt of the claim by the plan, provided that

    any such claim is made to the plan at least 24 hours prior to the

    expiration of the prescribed period of time or number of treatments.

    Notification of any adverse benefit determination concerning a request

    to extend the course of treatment, whether involving urgent care or

    not, shall be made in accordance with paragraph (g) of this section,

    and appeal shall be governed by paragraph (i)(2)(i), (i)(2)(ii), or

    (i)(2)(iii), as appropriate.

        (iii) Other claims. In the case of a claim not described in

    paragraphs (f)(2)(i) or (f)(2)(ii) of this section, the plan

    administrator shall notify the claimant of the plan's benefit

    determination in accordance with either paragraph (f)(2)(iii)(A) or

    (f)(2)(iii)(B) of this section, as appropriate.

        (A) Pre-service claims. In the case of a pre-service claim, the

    plan administrator shall notify the claimant of the plan's benefit

    determination (whether adverse or not) within a reasonable period of

    time appropriate to the medical circumstances, but not later than 15

    days after receipt of the claim by the plan. This period may be

    extended one time by the plan for up to 15 days, provided that the plan

    administrator both determines that such an extension is necessary due

    to matters beyond the control of the plan and notifies the claimant,

    prior to the expiration of the initial 15-day period, of the

    circumstances requiring the extension of time and the date by which the

    plan expects to render a decision. If such an extension is necessary

    due to a failure of the claimant to submit the information necessary to

    decide the claim, the notice of extension shall specifically describe

    the required information, and the claimant shall be afforded at least

    45 days from receipt of the notice within which to provide the

    specified information. Notification of any adverse benefit

    determination pursuant to this paragraph (f)(2)(iii)(A) shall be made

    in accordance with paragraph (g) of this section.

        (B) Post-service claims. In the case of a post-service claim, the

    plan administrator shall notify the claimant, in accordance with

    paragraph (g) of this section, of the plan's adverse benefit

    determination within a reasonable period of time, but not later than 30

    days after receipt of the claim. This period may be extended one time

    by the plan for up to 15 days, provided that the plan administrator

    both determines that

    such an extension is necessary due to matters beyond the control of the

    plan and notifies the claimant, prior to the expiration of the initial

    30-day period, of the circumstances requiring the extension of time and

    the date by which the plan expects to render a decision. If such an

    extension is necessary due to a failure of the claimant to submit the

    information necessary to decide the claim, the notice of extension

    shall specifically describe the required information, and the claimant

    shall be afforded at least 45 days from receipt of the notice within

    which to provide the specified information.

        (3) Disability claims. In the case of a claim for disability

    benefits, the plan administrator shall notify the claimant, in

    accordance with paragraph (g) of this section, of the plan's adverse

    benefit determination within a reasonable period of time, but not later

    than 45 days after receipt of the claim by the plan. This period may be

    extended by the plan for up to 30 days, provided that the plan

    administrator both determines that such an extension is necessary due

    to matters beyond the control of the plan and notifies the claimant,

    prior to the expiration of the initial 45-day period, of the

    circumstances requiring the extension of time and the date by which the

    plan expects to render a decision. If, prior to the end of the first

    30-day extension period, the administrator determines that, due to

    matters beyond the control of the plan, a decision cannot be rendered

    within that extension period, the period for making the determination

    may be extended for up to an additional 30 days, provided that the plan

    administrator notifies the claimant, prior to the expiration of the

    first 30-day extension period, of the circumstances requiring the

    extension and the date as of which the plan expects to render a

    decision. In the case of any extension under this paragraph (f)(3), the

    notice of extension shall specifically explain the standards on which

    entitlement to a benefit is based, the unresolved issues that prevent a

    decision on the claim, and the additional information needed to resolve

    those issues, and the claimant shall be afforded at least 45 days

    within which to provide the specified information.

        (4) Calculating time periods. For purposes of paragraph (f) of this

    section, the period of time within which a benefit determination is

    required to be made shall begin at the time a claim is filed in

    accordance with the reasonable procedures of a plan, without regard to

    whether all the information necessary to make a benefit determination

    accompanies the filing. In the event that a period of time is extended

    as permitted pursuant to paragraph (f)(2)(iii) or (f)(3) of this

    section due to a claimant's failure to submit information necessary to

    decide a claim, the period for making the benefit determination shall

    be tolled from the date on which the notification of the extension is

    sent to the claimant until the date on which the claimant responds to

    the request for additional information.

        (g) Manner and content of notification of benefit determination.

    (1) Except as provided in paragraph (g)(2) of this section, the plan

    administrator shall provide a claimant with written or electronic

    notification of any adverse benefit determination. Any electronic

    notification shall comply with the standards imposed by 29 CFR

    2520.104b-1(c)(1)(i), (iii), and (iv). The notification shall set

    forth, in a manner calculated to be understood by the claimant --

        (i) The specific reason or reasons for the adverse determination;

        (ii) Reference to the specific plan provisions on which the

    determination is based;

        (iii) A description of any additional material or information

    necessary for the claimant to perfect the claim and an explanation of

    why such material or information is necessary;

        (iv) A description of the plan's review procedures and the time

    limits applicable to such procedures, including a statement of the

    claimant's right to bring a civil action under section 502(a) of the

    Act following an adverse benefit determination on review;

        (v) In the case of an adverse benefit determination by a group

    health plan or a plan providing disability benefits,

        (A) If an internal rule, guideline, protocol, or other similar

    criterion was relied upon in making the adverse determination, either

    the specific rule, guideline, protocol, or other similar criterion; or

    a statement that such a rule, guideline, protocol, or other similar

    criterion was relied upon in making the adverse determination and that

    a copy of such rule, guideline, protocol, or other criterion will be

    provided free of charge to the claimant upon request; or

        (B) If the adverse benefit determination is based on a medical

    necessity or experimental treatment or similar exclusion or limit,

    either an explanation of the scientific or clinical judgment for the

    determination, applying the terms of the plan to the claimant's medical

    circumstances, or a statement that such explanation will be provided

    free of charge upon request.

        (vi) In the case of an adverse benefit determination by a group

    health plan concerning a claim involving urgent care, a description of

    the expedited review process applicable to such claims.

        (2) In the case of an adverse benefit determination by a group

    health plan concerning a claim involving urgent care, the information

    described in paragraph (g)(1) of this section may be provided to the

    claimant orally within the time frame prescribed in paragraph (f)(2)(i)

    of this section, provided that a written or electronic notification in

    accordance with paragraph (g)(1) of this section is furnished to the

    claimant not later than 3 days after the oral notification.

        (h) Appeal of adverse benefit determinations. (1) In general. Every

    employee benefit plan shall establish and maintain a procedure by which

    a claimant shall have a reasonable opportunity to appeal an adverse

    benefit determination to an appropriate named fiduciary of the plan,

    and under which there will be a full and fair review of the claim and

    the adverse benefit determination.

        (2) Full and fair review. Except as provided in paragraphs (h)(3)

    and (h)(4) of this section, the claims procedures of a plan will not be

    deemed to provide a claimant with a reasonable opportunity for a full

    and fair review of a claim and adverse benefit determination unless the

    claims procedures--

        (i) Provide claimants at least 60 days following receipt of a

    notification of an adverse benefit determination within which to appeal

    the determination;

        (ii) Provide claimants the opportunity to submit written comments,

    documents, records, and other information relating to the claim for

    benefits;

        (iii) Provide that a claimant shall be provided, upon request and

    free of charge, reasonable access to, and copies of, all documents,

    records, and other information relevant to the claimant's claim for

    benefits. Whether a document, record, or other information is relevant

    to a claim for benefits shall be determined by reference to paragraph

    (m)(8) of this section;

        (iv) Provide for a review that takes into account all comments,

    documents, records, and other information submitted by the claimant

    relating to the claim, without regard to whether such information was

    submitted or considered in the initial benefit determination.

        (3) Group health plans. The claims procedures of a group health

    plan will not be deemed to provide a claimant with a reasonable

    opportunity for a full

    and fair review of a claim and adverse benefit determination unless, in

    addition to complying with the requirements of paragraphs (h)(2)(ii)

    through (iv) of this section, the claims procedures--

        (i) Provide claimants at least 180 days following receipt of a

    notification of an adverse benefit determination within which to appeal

    the determination;

        (ii) Provide for a review that does not afford deference to the

    initial adverse benefit determination and that is conducted by an

    appropriate named fiduciary of the plan who is neither the individual

    who made the adverse benefit determination that is the subject of the

    appeal, nor the subordinate of such individual;

        (iii) Provide that, in deciding an appeal of any adverse benefit

    determination that is based in whole or in part on a medical judgment,

    including determinations with regard to whether a particular treatment,

    drug, or other item is experimental, investigational, or not medically

    necessary or appropriate, the appropriate named fiduciary shall consult

    with a health care professional who has appropriate training and

    experience in the field of medicine involved in the medical judgment;

        (iv) Provide for the identification of medical or vocational

    experts whose advice was obtained on behalf of the plan in connection

    with a claimant's adverse benefit determination, without regard to

    whether the advice was relied upon in making the benefit determination;

        (v) Provide that the health care professional engaged for purposes

    of a consultation under paragraph (h)(3)(iii) of this section shall be

    an individual who is neither an individual who was consulted in

    connection with the adverse benefit determination that is the subject

    of the appeal, nor the subordinate of any such individual; and

        (vi) Provide, in the case of a claim involving urgent care, for an

    expedited review process pursuant to which--

        (A) A request for an expedited appeal of an adverse benefit

    determination may be submitted orally or in writing by the claimant;

    and

        (B) All necessary information, including the plan's benefit

    determination on review, shall be transmitted between the plan and the

    claimant by telephone, facsimile, or other available similarly

    expeditious method.

        (4) Plans providing disability benefits. The claims procedures of a

    plan providing disability benefits will not, with respect to claims for

    such benefits, be deemed to provide a claimant with a reasonable

    opportunity for a full and fair review of a claim and adverse benefit

    determination unless the claims procedures comply with the requirements

    of paragraphs (h)(2)(ii) through (iv) and (h)(3)(i) through (v) of this

    section.

        (i) Timing of notification of benefit determination on review. (1)

    In general. (i) Except as provided in paragraphs (i)(1)(ii), (i)(2),

    and (i)(3) of this section, the plan administrator shall notify a

    claimant in accordance with paragraph (j) of this section of the plan's

    benefit determination on review within a reasonable period of time, but

    not later than 60 days after receipt of the claimant's request for

    review by the plan, unless the plan administrator determines that

    special circumstances (such as the need to hold a hearing, if the

    plan's procedures provide for a hearing) require an extension of time

    for processing the claim. If the plan administrator determines that an

    extension of time for processing is required, written notice of the

    extension shall be furnished to the claimant prior to the termination

    of the initial 60-day period. In no event shall such extension exceed a

    period of 60 days from the end of the initial period. The extension

    notice shall indicate the special circumstances requiring an extension

    of time and the date by which the plan expects to render the

    determination on review.

        (ii) In the case of a plan with a committee or board of trustees

    designated as the appropriate named fiduciary that holds regularly

    scheduled meetings at least quarterly, paragraph (i)(1)(i) of this

    section shall not apply, and, except as provided in paragraphs (i)(2)

    and (i)(3) of this section, the appropriate named fiduciary shall

    instead make a benefit determination no later than the date of the

    meeting of the committee or board that immediately follows the plan's

    receipt of a request for review, unless the request for review is filed

    within 30 days preceding the date of such meeting. In such case, a

    benefit determination may be made by no later than the date of the

    second meeting following the plan's receipt of the request for review.

    If special circumstances (such as the need to hold a hearing, if the

    plan's procedures provide for a hearing) require a further extension of

    time for processing, a benefit determination shall be rendered not

    later than the third meeting of the committee or board following the

    plan's receipt of the request for review. If such an extension of time

    for review is required because of special circumstances, the plan

    administrator shall provide the claimant with written notice of the

    extension, describing the special circumstances and the date as of