ACA Claims and Appeals Requirements

The Affordable Care Act imposes new claims and appeals requirements on non-grandfathered plans for plan years beginning on or after September 23, 2010. The aim of these changes is to increase consumer protection. For fully-insured plans, the insurance carrier has primary responsibility to administer and comply with these regulations. Self-funded sponsors are subject to these requirements as well, but their third party administrator will usually have to administer the provisions as part of their normal claims operations.

The new internal claims and appeal requirements are applicable to group health plans and individual health coverage. All plans must:

1) establish an internal claims appeal process;

2) provide notice to enrollees, in a culturally and linguistically appropriate manner, of available internal and external appeals processes and the availability of any applicable office of health insurance, consumer assistance or ombudsman to assist members with the appeals process;

3) allow enrollees to review their own file, and present evidence and testimony as part of the appeals process; and

4) allow enrollees to receive continued coverage pending the outcome of the appeal process.

Internal Review Process

The ACA requirements are aimed at making the review process simpler and more responsive to health care consumers. One way this will be achieved is by creating standardized time frames for the handling of claims. Consumers must also be allowed to review the claim file and to present evidence and testimony as part of the process.

During the review process, consumers must be provided any new or additional evidence used by the plan in connection with the claim. Any new rationale for determinations must also be explained.  This information must be provided for free and far enough in advance of the final internal appeal, so the claimant has a reasonable opportunity to respond. Whether or not a plan asserts that it has complied with the requirements of the internal review process, a claimant may initiate an external review.

External Review Process

The external review process is available to claims that involve medical judgment and rescissions.  Any other type of claim is ineligible for external review.


All notices to claimants must provide:

      • Information sufficient to identify the claim involved
      • The reason the claim was denied
      • A description of available internal appeals and external review processes along with information regarding how to initiate those processes
      • The availability of, and contact information for, California health insurance consumer assistance

Notices must be provided in a culturally and linguistically appropriate manner. There are specific literacy threshold requirements for providing notices in non-English languages.


The penalty for failing to comply with these rules is $100 per day for each failure. Claimants will also have the right to bring an action in either State or Federal court.

Important Note

Plans must provide continued coverage pending the outcome of an appeal.

Additional information and model communications can be found on the Department of Labor’s Health Reform page.
Glocal Insurance Services is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Clients are advised to consult with their own attorney for a determination of their legal rights, responsibilities and liabilities, including the interpretation of any statute or regulation, or its application to the clients’ business activities.