After Alarming Reports of ‘Mass Denials,’ Labor Leaders Urge DOL to Improve Transparency for Consumers
“We are especially concerned that the secrecy surrounding denied claims for health benefits harms workers and their families and we urge you to prioritize improvements in the collection of data regarding such denials.”
WASHINGTON – Today, Education and the Workforce Committee Ranking Member Robert C. “Bobby” Scott (VA-03) and Health, Employment, Labor, and Pensions Subcommittee Ranking Member Mark DeSaulnier (CA-10) urged the Department of Labor to improve transparency for consumers after alarming reports of widespread denials of benefits by employment-based health plans. These plans cover more than 130 million Americans and are subject to important consumer protections under the Employee Retirement Income Security Act (ERISA).
Recent media investigations have uncovered systemic “arbitrary, improper, and mass denials” of health benefits by insurers and third-party administrators, preventing workers and their families from accessing critical care. These denials happen in near-total secrecy, in part due to the failure of the Trump Administration to implement crucial transparency requirements of the Affordable Care Act (ACA) and ERISA.
Under ERISA, employee benefit plans, including group health plans, must submit an annual report to the Department of Labor regarding their financial status and operations. However, the annual report, known as the Form 5500, provides little to no transparency regarding key operations of most group health plans, including data that is required under the ACA regarding denied claims. Moreover, due to a loophole in current regulations, the vast majority of the 2.8 million ERISA-covered group health plans are totally exempt from submitting the Form 5500 at all.
“We write to encourage the Department of Labor (the Department) to take action to strengthen disclosure requirements under [ERISA] for group health plans. Improved transparency is urgently needed in light of recent investigations that have uncovered widespread denials of health benefits by insurers and third-party administrators and the devastating consequences that these denials have for workers and their families,” the Members wrote.
Scott and DeSaulnier urge the Department to improve Form 5500 to ensure that all necessary data regarding benefit denials is collected and to close loopholes that currently exempt millions of ERISA-covered plans from compliance. These improvements are consistent with recommendations of the Office of the Inspector General and reforms previously proposed by the Obama Administration. The Members continued, “We are especially concerned that the secrecy surrounding denied claims for health benefits harms workers and their families and we urge you to prioritize improvements in the collection of data regarding such denials. Improper claim denials impose health and financial hardships on individuals, leading to delays in necessary treatments, deterioration of one’s health, and high out-of-pocket costs.”
Read the full text of the letter here.
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