Authorized Representatives – Fresh Look at an Old Rule

Matthew P. Chiarello • July 18, 2019

Earlier this year, the Department of Labor issued an information letter explaining ERISA’s authorized representative requirement.  Below are some of the takeaways employers may want to consider.

1.     The Authorized Representative Requirement Under ERISA

ERISA’s claims procedure regulations expressly give participants and beneficiaries the right to appoint authorized representatives to act on their behalf in connection with a claim for benefits and an appeal of an adverse benefit determination.  Furthermore, when a claimant clearly designates an authorized representative to assist with a claim and/or appeal, the plan should direct the claimant’s information and notifications to the authorized representative to act on behalf of the claimant.

2.     Plan Sponsors May Want to Establish Authorized Representative Procedures

A plan may establish reasonable procedures for determining whether an authorized representative has been designated.  Such procedures must be in the plan’s summary plan description (“SPD”) or a separate document that accompanies the SPD.

One advantage of maintaining procedures is to give participants, beneficiaries, and plans a mechanism to identify when an individual is authorized to act on a participant or beneficiary’s behalf and to understand the scope of that authorization.  This is becoming increasingly important as plans, employers, and employees work with third parties to help employees navigate their health benefits.

3.     An Authorized Representative Is Different From An Assignee

If there has been an assignment of benefits by a claimant to an assignee (e.g., a medical provider), it means that the claimant has assigned the assignee the claimant’s right to receive benefits under the plan (i.e., payments for services), and as a result the assignee can assert (e.g., through lawsuit) his/her right to payment.  In other words, the assignee can then act on behalf of himself to obtain payment under the plan, while an authorized representative can act on behalf of the claimant to obtain payment under the plan.

Unlike authorized representatives, ERISA does not expressly permit or prohibit participants and beneficiaries from assigning benefits.  Therefore, a plan can generally prohibit, or limit the scope of, an assignment of benefits through an anti-assignment clause in its plan document.

For more information regarding authorized representative appointments and assignment of benefits, see our October 11, 2016 SW Benefits Blog, “ Dealing with Long-Winded Out-of-Network Provider Nuisance Letters.”

Employee burnout: what it is and how to prevent it

By Mardy Gould • May 24, 2024
Employee burnout has become an epidemic in today’s modern workplace. So much so that the World Health Organization (WHO) officially recognizes it as an “occupational phenomenon.”1 While many used to consider mounting workplace stress an individual employee problem, these days, it’s become an employer’s responsibility to prevent burnout before it hurts productivity and business performance—not to mention your employees’ physical and mental health. Luckily, you can prevent burnout from affecting your workforce in several ways. This article will explore the causes and signs of employee burnout and the steps you can take to create a positive work environment where employees feel safe from toxic stress levels.

Form 720 and PCORI fee FAQs

By Mardy Gould • May 23, 2024
If you're a small business owner, you may have heard of the acronym PCORI and the fees that come with it. But what is PCORI, and how does it apply to your organization? Under the Affordable Care Act (ACA), sponsors of self-insured health plans must pay a fee to fund the federal Patient-Centered Outcomes Research Institute (PCORI). PCORI is an independent organization the ACA created to conduct research to help healthcare consumers make better decisions for their specific needs and outcomes. It also performs research related to clinical effectiveness. Employers offering a self-insured medical reimbursement health plan, such as a health reimbursement arrangement (HRA), must pay this fee by July 31 each year via Form 7201. This fee was initially set to expire in 2019, but Congress extended it through September 30, 20292, due to the Further Consolidated Appropriations Act of 20203.
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