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Merritt Personal Lines Manual: Federal HMO Act

The Federal HMO Act defines what is an HMO. To be an HMO an organization must have:

  • an organized system for providing health care or otherwise assuring health care delivery in a geographic area,
  • an agreed upon set of basic and supplemental health maintenance and treatment services,
  • a voluntarily enrolled group of people.

All employers offering health benefits to their employees through managed care organizations or traditional indemnity insurers must comply with requirements of the Employee Retirement Income Security Act. ERISA requires private employer-provided health benefit plans to disclose certain information to plan participants, to report information to the Federal government and to pay benefits that are promised under the plan. ERISA regulations generally require employer health plans to approve or deny claims within 90 days and to approve or deny appeals of claims denials within 60 days. Although ERISA health plans are required to establish and disclose complaint and appeals procedures to participants and to notify participants of claims denials, the plans are not required to provide a particular complaint procedure.

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