Medical and Other ERISA Plans

CAFS provides independent final claim appeal processing for ERISA-governed medical and other types of plans, such as severance plans, stay pay plans, certain executive compensation plans and any other ERISA plan that includes an ERISA Section 503 Claims Procedure. CAFS acts as an independent fiduciary, under ERISA, to adjudicate any claims raised by individual claimants with respect to their benefits under such plans. By assuming the important role as the ERISA claim appeal fiduciary, CAFS eliminates conflict of interest, and improves the quality and integrity of decision-making. We have designed our approach to fiduciary decision-making to be a better choice for sponsors of these types of welfare benefit, regardless of how such final appeals are currently being handled.

When plan sponsors undertake this important role internally, there are concerns of conflict of interest, self-dealing and whether the process was prudent. There is also concern about liability for internal staff and executives – even personal liability. Thus, the best practice is to retain an independent third party for this function. Due to the complexities and risk of ERISA fiduciary liability, there are very limited sources of providers that have the capability, expertise and the willingness to take on this important role.

CAFS utilizes its extensive background in all types of ERISA plans, and its extensive working knowledge of ERISA’s fiduciary process requirements to provide plan sponsors with independent claim appeal processing under the rigors of ERISA Section 404 and 405. Plan sponsors are always at an advantage when the employ CAFS to independently handle final claim appeals for their retirement where under ERISA, a Claim Procedure under ERISA Section 503 is mandated.

“Firestone…require[s] abuse of discretion review whenever an ERISA plan grants discretion to a plan administrator, but a review informed by the nature, extent, and effect on the decision-making process of any conflict of interest that may appear in the record, this standard applies to the kind of inherent conflict that exists when an insurer acts as both the plan administrator and the funding source for benefits.” Ford v. Motorola Inc. Involuntary Severance Plan, 2007 WL 162680 (D. Ariz. 2007)(citing Abatie v. Alta Health & Life Ins. Co. 458 F.3d 955 (9th Cir. 2006)(en banc)).

Final Claim Services of Health and other ERISA Plans

The CAFS fiduciary process is adapted and customized to fit each of our clients circumstances. Our overall process (see Full Service Appeal Processing for more details) is tailored to meet our clients specific needs and the other third parties involved in administration. A critical part of this analysis that most of our clients find comforting, is that the internal staff are often part of the internal investigative process. It would not be prudent to make a decision in a vacuum, without the advantage of full background and history, when appropriate.

Using the plan documents, underlying facts and circumstances, consultations with plan service providers, claim administrators and internal staff along with up-do-date information on statutory and regulatory interpretation, including court decisions and promulgations from government authorities and scholars, CAFS processes final claim appeals for medical plans, severance plans, and other ERISA-governed plans. Areas of such appeals may include:

• Calculations and benefit formula elements
• Eligibility and coverage determinations
• Service determinations
• Offsets, co-insurance, and subrogation
• Medical necessity benefit determinations
• Usual, customary, and reasonable benefit determinations
• Other plan-based benefit determination
• Beneficiary Entitlements

CAFS is a better alternative. As a truly independent source of decision-making under ERISA, CAFS eliminates conflict of interest, provides experience and quality processes, decreases staff time and training needs, improves the perception of fairness, and decreases litigation costs and liability exposure in the event disputed claims are litigated. Overall, there are only advantages to using CAFS.