ERISA requires that a health plan allow an “authorized representative” to act on behalf of a participant during any claims and appeals process. Usually, this takes the form of a parent or spouse acting on behalf of their family member. Recently, however, a business model has emerged where experts analyze a participant’s paperwork and file the initial claim and any appeal. The objective of these businesses is to find errors in plan documentation and preemptively address any potential denials, which will ultimately save the participant money.
An informational letter recently issued by the Department of Labor has made clear that plans cannot prohibit these commercial entities from acting as authorized representatives. It is likely that this trend of employing commercial authorized representatives will only continue has health care costs continue to rise and health administration continues to become more complicated. Plans should take this opportunity to ensure the Summary Plan Description allows the appointment of an authorized representative and describes a reasonable process for a participant to name the authorized representative.