Disability Claims Solutions


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Q&A6There were quite a few questions submitted to DCS about HIPAA and ERISA. There are many good posts about these subjects if you Search for them from the Home Page.

What are the ERISA Rules on pre-existing condition?

The Employment Retirement Income Security Act of 1974 has absolutely nothing to do with disability internal claims review procedures. ERISA was originally placed into law to prevent employers from discriminating against employees in various “welfare” Plans that included disability, benefit and pension Plans.

The importance of ERISA today is that the laws set up timeline disclosures that regulators don’t pay attention to, such as 45-day review periods, 180 days allowed for appeal etc. There are no mandates for EBSA (U.S. Department of Labor) to support insureds until such time as claims are denied, which no one should want anyway. ERISA does NOT in any way support the rights of claimants since “standards of review” such as “arbitrary and capricious” vs. “de novo” review and lack of punitive damages are still enforced by the courts. However, when it comes to ERISA providing claims review guidelines, claimants are out of luck, and the laws won’t help you until claims are denied. Who wants that?

Are STD benefits subject to ERISA?

All Group STD/LTD benefits are subject to ERISA unless specifically excluded by law. Exclusions include non-profit, religious and government run entities.

If a patient/insured dies in a medical facility will the insurance company process a disability claim?

Yes, if the insured otherwise met all other provisions of the Plan or policy. In other words, the insured must have met the Elimination Period before passing away and all other eligibility requirements. Any benefits due will be paid to Survivors if other policy provisions are met dealing with Survivor’s benefits. Families of deceased insureds should read the disability Plan or policy carefully to determine whether benefits should be paid for a closed period of time prior to the expiring of the insured.

Can physicians involved in the claims review process, such as IME physicians bypass HIPAA?

I think it is important to remember that HIPAA only deals with “electronic submission of medical records.” Amendments to HIPAA have greatly reduced, or eliminated guidelines for submission. Disability companies are expressly excluded from HIPAA directly in the regulations. However, physicians (including IME physicians) are still required to be compliant with HIPAA laws. This is why most insurance companies follow HIPAA guidelines for their Authorizations.

HIPAA, like ERISA is an area under which most insureds believe they have a great deal of protection when they really don’t. If you actually read a HIPAA Authorization it tells you that once records are released they lose HIPAA protection entirely. But, insureds get on the Internet and they read misinformation and think ERISA and HIPAA can protect their rights and medical information.

Don’t be fooled into thinking these somewhat antiquated federal laws will provide you with rights and protections because they don’t. Federal regulators aren’t policing the timeline regulations and most judges let timeline violations go unconsidered in litigation. Claimants/insureds still can’t win for losing.