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July 12, 2001
New ERISA Rule Delayed
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Department of Labor's Pension and Welfare Benefits Administration has delayed "for at least six months and not more than one year" the effective date for its final ERISA regulations concerning benefit claims procedures of group health plans.

The PWBA issued the final regulations on claims and appeals procedures on Nov. 21, 2000. As originally published, they were scheduled to take effect for benefit claims filed on or after Jan. 1, 2002.

Now, they will take effect on or after the first day of the first plan year beginning on or after July 1, 2002, but in no event later than Jan. 1, 2003.

"This action provides a limited additional period within which group health plan sponsors, administrators, and service providers can bring their claims processing systems into compliance with the new requirements," the PWBA announced in the July 9 Federal Register .

The delay, it added, "will allow a more orderly transition to the new standards and will avoid the confusion and additional expense that would be caused if certain pending Congressional bills are enacted before or soon after the original applicability date."

The delayed regulations would revise the minimum requirements for benefit claims procedures of all employee benefit plans covered under Title I of the Employee Retirement Income Security Act of 1974 (ERISA).

In particular, they call for substantial changes in the way in which employee benefit plans must process claims for group health benefits. These changes include shorter time frames for decision making, new procedural standards for appeals of denied claims, and increased disclosure to claimants.

In addition, they contain new procedural requirements for processing disability claims.

As for other types of benefits, the procedures would continue "largely" as they have since 1977.

"Since the publication of the regulation," the PWBA announced, "a number of issues have been raised by plan sponsors, service providers, state regulators, and others concerning the interpretation and application of the various provisions and requirements of the regulation that apply to group health plans. In this regard, the Department has been requested to provide additional guidance concerning the regulation in order to ensure efficient and effective implementation of the new rules."

Click here to view the full notice published in the Federal Register.
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