There are times when an individual who has a claim under ERISA is unable to bring that claim on their own. In these situations, an authorized representative of the claimant can bring the claim instead. A recent Department of Labor (DOL) Information Letter, issued at the end of February, provides clarification regarding the ability of this individual to act on behalf of the claimant. Specifically, it addressed the question brought by a patient advocate regarding healthcare claim recoveries, but the capacity to represent a claimant would apply to all ERISA contentions.
DOL Reg. 2560.503-1(b)(4)
The regulations put out by the DOL, and clarified in their Information Letter, gives ERISA-qualified plan participants, as well as those who are beneficiaries under a plan, the authority to appoint someone to act as their representatives. These authorized representatives would then have the authority to file both initial claims for benefits owed to the plan participants and beneficiaries as well as to appeal decisions regarding benefits. Plans cannot include language or otherwise act in a way that prevents these representatives from acting on behalf of plan participants.
There are numerous situations where this could come into play, particularly regarding plan benefits for long-term disability or death. The plan participant may no longer be physical or mentally capable of representing him or herself. The plan beneficiaries, upon death, may be minors or individuals who have no exposure and understanding of the benefit plan. In these cases, they can authorize an attorney to step into their stead and ensure they receive all benefits to which they are entitled. Further, the authorized representative likely has enough experience to ensure any benefit decisions made are in line with both the needs of the individual, the rules of the plan, and state and federal laws.
Handling Authorized Representatives
While a plan cannot preclude an authorized representative or prevent a claimant from choosing who they want to serve in that capacity, they can establish certain reasonable procedures designed to insure that the person they’re interacting with is, in fact, authorized to act on behalf of the participant. Especially in the current age of security concerns regarding stolen personal information, taking steps to make sure someone is who they hold themselves out to be and has the authority to act is of vital importance to ensuring plan security.
Further, procedures for designating an authorized representative must be included as part of the plan’s claims procedures, in the plan’s summary plan description, or as part of a separate document accompanying the summary plan description. The plan must also have procedures in place to ensure authorized representatives are notified in connection with claim determinations and appeals. Once a plan has confirmed that someone is correctly authorized, they must be informed about the claim as it progresses.
Ensuring that your ERISA plans comply with the latest clarification from the DOL is just the first step. Your business also needs to ensure it has adequate policies and procedures in place to safely handle authorized representatives and claimants when needed. For help setting up benefits plans and ensuring your plans continue to stay in compliance, reach out to the team at Hall Benefits Law. We work with businesses from California to New York to implement, update, and address ERISA benefit plans, compliance processes, and handle unique cases. Reach out today by calling 678-439-6236 or visit the Hall Benefits Law website.
Hall Benefits Law, LLC
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