When it comes to retirement plans, plan sponsors want to know when a plan participant makes a benefit claim. ERISA requirements for response and processing of claims include specific timing, as well as rules for claim denials, which must be followed by plan sponsors in order to remain in compliance. It can be difficult, however, to know when a claim was made and whether an individual has submitted a claim.
Retirement Plan Claim for Benefits
A claim for benefits, as defined in ERISA regulations, is a request for a benefit made by a plan participant or beneficiary. This claim must be made in accordance with the plan’s stated procedure for filing claims, and the procedure must be reasonable. For the procedure to be reasonable, it must have a clear, specific method for making claims. It must outline whether the claims should be made in writing and where the claims must be directed. There must also be a method for designating a third-party representative to handle the claim on the claimant’s behalf. These regulations need to be clear to plan participants, beneficiaries, and designated representatives, but they must also be understandable for plan sponsors, so they know where and how to expect claims to arrive.
Requests for items that are not plan benefits are not “claims for benefits,” though they may still be reasonable requests to which plan sponsors must respond. Requests for copies of plan documents, an explanation of benefits, a statement, disclosure documents, and general requests are not “claims for benefits.” These requests are claims only if they also include a request for payment or other action that is a benefit under the plan.
Steps to Take Upon Receipt of a Claim
In addition to having a procedure for making claims, retirement plans must also have an internal procedure for handling these claims. The procedure should be compliant with ERISA regulations, including notification procedures, so the plan administrator or another party can decide whether the claim is valid, counsel can be notified when necessary, and any insurers or outside parties who need to be notified are included.
If you’re uncertain whether the communication received qualifies as a claim for benefits, it’s generally good to first assume that all communications from plan participants, beneficiaries, and third-party designees deserve a response. This may be as simple as providing the requested documents along with a letter stating that they did not seem to make a claim. This puts the recipient on notice that the plan sponsor did not see a claim. If there was the intent to make a claim, then the person who made the initial contact can respond more clearly stating that they intended to make a claim. Opening and maintaining dialogue with plan participants can avoid many potential problems.
Give us a call 678-439-6236 today, or visit the Hall Benefits Law website to learn more about creating effective processes and training your team how to handle benefits claims.
Hall Benefits Law, LLC
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