EBSA Extends Transition Period For State External Review Process Under ACA

The Employee Benefits Security Administration (EBSA) has issued a technical release (T.R. 2013-01) that updates and clarifies Technical Release 2011-02 (T.R. 2011-02), which provided guidance for states on state external review processes under the Patient Protection and Affordable Care Act (ACA). T.R. 2013-01 also extends the applicability of the temporary National Association of Insurance Commissioners (NAIC)-similar process standards until Jan. 1, 2016.

Background. Public Health Service Act (PHSA) Sec. 2719 sets forth standards for group health plans and health insurance issuers offering coverage in the group and individual markets regarding both internal claims and appeals process and external review. The Departments of Labor, Health and Human Services (HHS), and the Treasury (the Departments) published interim final regulations implementing PHSA Sec. 2719 on July 23, 2010 (the July 2010 regulations), and an amendment to the interim final regulations on June 24, 2011 (the June 2011 amendment).

On June 22, 2011, the Departments issued T.R. 2011-02, which established a transition period until Jan. 1, 2012 for state external review process implementation. T.R. 2011-02 also established a set of temporary standards—similar to the consumer protections set forth in the Uniform Health Carrier External Review Model Act issued by NAIC—that would apply until Jan. 1, 2014 for a state-administered external review process authorized under PHSA Sec. 2719(b)(2) and paragraph (d) of the July 2010 regulations.

Paragraph (c)(2) of the July 2010 regulations sets forth the 16 minimum consumer protection standards from the NAIC Uniform Model Act that a state external review process must include in order to be authorized under PHSA Sec. 2719(b)(1).

Transition period extended. Until Jan. 1, 2016 (or earlier if a state enacts an NAIC-parallel process prior to Jan. 1, 2016), issuers (and, if applicable, self-insured nonfederal governmental plans) will be considered to comply with the requirements of paragraph (c)(2) of the July 2010 regulations if they comply with an applicable state external review process that meets the temporary NAIC-similar process standards established in T.R. 2011-02, even if it does not meet all the minimum consumer protections of paragraph (c)(2) of the July 2010 regulations, as amended.

During this extended transition period, the states that the Center for Consumer Information and Insurance Oversight (CCIIO) has already determined to meet the NAIC-similar process standards will continue to be considered compliant with the requirements of PHSA Sec. 2719 until Jan. 1, 2016.

Beginning Jan. 1, 2016, a state external review process will need to satisfy the standards of paragraph (c)(2) of the July 2010 regulations, as amended, or issuers (and, if applicable, self-insured nonfederal governmental plans) in that state will need to comply with a federally-administered external review process.

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