ERISA is one of the many buzzwords that you hear about in the health insurance industry. ERISA applies to private (non-government) employers that offer employer-sponsored health insurance plans. ERISA does not apply to private plans or individual insurance policies.
ERISA – the Employee Retirement Income Security Act of 1974, sets the standard on how participants under pension and health plans must be protected. ERISA does not mandate that an employer provide health insurance to its employees; but, if offered, it regulates how the health plan must behave.
ERISA plans include some important protections:
In addition, ERISA...
ERISA has a huge importance to employees but why is ERISA important to providers and billers?
Many years ago when I first started out in the insurance industry, it was not uncommon for a me to spend a great amount of my time appealing for coverage for services that were denied by the health carrier for some reason or another. The first thing I would do is ask the patient for a copy of their Summary Plan Description (SPD). The SPD helped me to understand if I even had a basis for appeal.
ERISA requires that all plan members be provided with a Summary Plan Description. A Summary Plan Description is often referred to as a plan booklet and is provided to all plan members upon enrollment. It provides pages and pages of information on all aspects of the plan including:
Today, occasionally, I still refer to a patient’s SPD to help me appeal a complex denial.
Real Word Example
Recently, I had a carrier deny a service based on the age of the patient. After referring to ALL pages of their SPD, I could not find anywhere that stated that the service in question was age specific. The appeal was presented to the carrier along with a copy of the appropriate section in the SPD. The denial was overturned and the approval was granted.
Of course, this goes the other way as well. Had this plan clearly stated the age requirement, I would have known that it was a waste of time to appeal to the carrier and the patient would have been advised of their options before proceeding with the order.