In May 2013, the U.S. Department of Labor (“DOL”) issued a guidance and a revised model COBRA election notice in anticipation of the approaching effective date of the insurance exchanges required by the Affordable Care Act (“ACA”). Specifically, beginning on January 1, 2014, individuals and employees of small businesses will have access to coverage through a new private health insurance market known as the Health Insurance Marketplace. Open enrollment for health coverage through Marketplace began on October 1, 2013.
Employer-sponsored group heath plans typically allow reimbursement to the plan for benefits paid in connection with injuries sustained as a result the tortious conduct of a third party. That right of reimbursement arises when the injured plan participant obtains a recovery against the tortfeasor and is enforceable, as an equitable lien by contract, against the proceeds of any recovery. Plan terms also, as an alternative remedy, subrogate the plan to the rights of the injured participant and allow the plan to pursue the participant’s tort claim in its own name.
Beginning on January 1, 2013, calendar year, non-grandfathered group health plans must provide coverage of certain women’s preventive services without cost sharing – that is, no co-pay or deductible. The Health Resources and Services Administration of the Department of Health and Human Services (HHS) has issued guidelines on this subject which were developed by the Institute of Medicine.
The 2010 health care reform legislation, Patient Protection and Affordable Care Act (“Affordable Care Act”), created a new disclosure tool for group health plans and issuers of health insurance policies – the Summary of Benefits and Coverage. This new document, which will be called the SBC, is in addition to the existing SPD (summary plan description) and SMM (summary of material modifications). The SBC can, however, be included in the SPD so long as it is intact and prominently displayed at the front of the SPD.
Group health plans typically provide that when the plan pays benefits for treatment of injuries incurred as the result of a third party’s negligence, the plan is entitled to reimbursement for those payments from the proceeds of injured participant’s recovery (if any) from the third party. In general, those kinds of provisions are enforceable under federal law, and careful drafting of precise and unambiguous language can help ensure that the plan is entitled to reimbursement even if the participant’s recovery does not fully compensate the participant for the harm suffered by the participant – that is, make the participant whole. Further, again assuming appropriate language in the plan, the plan’s reimbursement will not be subject to reduction for a share of the participant’s attorneys’ fees. That appears to be the state of the law in West Virginia, Ohio, and Kentucky. Until about a month ago, it was the law in Pennsylvania as well.
The Patient Protection and Affordable Care Act (“PPACA”) requires health insurance issuers and certain employer-sponsored group health plans to comply with “the applicable State external review process for such plans and issuers.” States’ external review processes must provide for external review of denials of insurance claims (and claims for group health plan benefits) for medical care based on medical necessity, appropriateness, health care setting, level of care, or effectiveness of a covered benefit. PPACA’s external review requirements were to become effective to policies issued after September 23, 2010, and then, via interim regulations, after a transition period ending on July 1, 2011.
As a general rule, under what is called “the American Rule” each party to a lawsuit pays his own attorney’s fees, win or lose, unless a statute or a contract provides otherwise. The Employee Retirement Income Security Act (“ERISA”) authorizes courts to award attorneys’ fees and costs to either party. Such “fee-shifting” is not automatic in ERISA cases. It’s up to the trial judge to determine whether an award of fees is appropriate on a case-by-case basis.