Reasonable Health and Disability Benefit Claim Procedures

Adapted from Compliance Assistance - Group Health and Disability Plans Benefit Claims Procedure Regulation (29 CFR 2560.503-1), published by the U.S. Department of Labor; selected section: B. Reasonable Procedures — § 2560.503-1(b) T. The source text is reproduced with headings and formatting adjusted for this guide.

B. Reasonable Procedures — § 2560.503-1(b) T

The regulation requires that every employee benefit plan establish and maintain reasonable procedures governing the claims process. Procedures will be deemed reasonable only if they satisfy certain requirements. The following questions and answers relate to some of the requirements for a reasonable claims procedure.

Q-B1: May a plan require that a claimant complete and file a form identifying any person authorized to act on his or her behalf with respect to a claim?

A: Yes, with one exception. The regulation provides that a reasonable claims procedure may not preclude an authorized representative of a claimant from acting on behalf of a claimant with respect to a benefit claim or appeal of an adverse benefit determination. The regulation also provides, however, that a plan may establish reasonable procedures for determining whether an individual has been authorized to act on behalf of the claimant. Completion of a form by the claimant identifying the authorized representative would be one method for making such a determination.

The one exception is where a claim involves urgent care. In such instances, a plan must, without regard to the plan's procedures for identifying authorized representatives, permit a health care professional with knowledge of the claimant's medical condition (e.g., a treating physician) to act as the authorized representative of the claimant. This exception is intended to enable a health care professional to pursue a claim on behalf of a claimant under circumstances where, for example, the claimant is unable to act on his or her own behalf. (See § 2560.503- 1(b)(4).)

Q-B2: Does an "assignment of benefits" by a claimant to a health care provider constitute the designation of an "authorized representative"?

A: No. An assignment of benefits by a claimant is generally limited to assignment of the claimant's right to receive a benefit payment under the terms of the plan. Typically, assignments are not a grant of authority to act on a claimant's behalf in pursuing and appealing a benefit determination under a plan. In addition, the validity of a designation of an authorized representative will depend on whether the designation has been made in accordance with the procedures established by the plan, if any.

Q-B3: When a claimant has properly authorized a representative to act on his or her behalf, is the plan required to provide benefit determinations and other notifications to the authorized representative, the claimant, or both?

A: Nothing in the regulation precludes a plan from communicating with both the claimant and the claimant's authorized representative. However, it is the view of the Department that, for purposes of the claims procedure rules, when a claimant clearly designates an authorized representative to act and receive notices on his or her behalf with respect to a claim, the plan should, in the absence of a contrary direction from the claimant, direct all information and notifications to which the claimant is otherwise entitled to the representative authorized to act on the claimant's behalf with respect to that aspect of the claim (e.g., initial determination, request for documents, appeal, etc.). In this regard, it is important that both claimants and plans understand and make clear the extent to which an authorized representative will be acting on behalf of the claimant.

Q-B4: What kind of administrative processes and safeguards must a plan have in place to ensure and verify appropriately consistent decisionmaking?

A: The Department did not intend to prescribe any particular process(es) or safeguard(s) to ensure and verify consistent decisionmaking by plans. To the contrary, the Department intended to preserve the greatest flexibility possible for designing and operating claims processing systems consistent with the prudent administration of a plan. The Department believes that prudent plan administration requires ensuring that similarly situated claims are, under similar circumstances, decided in a consistent manner. Consistency in the benefit claims determinations might be ensured by applying protocols, guidelines, criteria, rate tables, fee schedules, etc. Consistent decisionmaking might be ensured and verified by periodic examinations, reviews, or audits of benefit claims to determine whether the appropriate protocols, guidelines, criteria, rate tables, fee schedules, etc. were applied in the claims determination process. (See § 2560.503-1(b)(5).)

Q-B5: For purposes of furnishing "relevant documents" to a claimant, what kind of disclosure is required to "demonstrate compliance with the administrative processes and safeguards required to ensure and verify appropriately consistent decisionmaking in making the benefit determination"?

A: The documents required to be disclosed will depend on the particular processes and safeguards that a plan has established and maintains to ensure and verify appropriately consistent decisionmaking. (See 65 FR at 70252.) The Department does not anticipate new documents being developed solely to comply with this disclosure requirement. Rather, the Department anticipates that claimants who request this disclosure will be provided with what the plan actually used, in the case of the specific claim denial, to satisfy this requirement. The plan could, for example, provide the specific plan rules or guidelines governing the application of specific protocols, criteria, rate tables, fee schedules, etc. to claims like the claim at issue, or the specific checklist or cross-checking document that served to affirm that the plan rules or guidelines were appropriately applied to the claimant's claim. Plans are not required to disclose other claimants' individual records or information specific to the resolution of other claims in order to comply with this requirement. (See § 2560.503-1(m)(8)(iii). Also see question Q-D12.)

Q-B6: Do the regulation's limits on the use of predispute arbitration extend to other actions that a participant or beneficiary might pursue with regard to a health care provider or other person or entity?

A: No. The regulation is intended to regulate predispute arbitration only with respect to group health and disability benefits provided under ERISA-covered plans. The regulation is not intended to affect the enforceability of a predispute arbitration agreement with respect to any other claims or disputes. Accordingly, the regulation should not be read to affect the obligation of a participant or beneficiary to arbitrate such other claims and disputes within the scope of the arbitration agreement. (See 29 CFR § 2560.503-1(c)(3)(iii).)

This guide concerns U.S. workplace benefits and the federal rules described by the Department of Labor. The type of plan, its governing documents, and the facts of a claim matter. Government, church, and other excluded plans may follow different rules.

Source and scope

Compliance Assistance - Group Health and Disability Plans Benefit Claims Procedure Regulation (29 CFR 2560.503-1) — U.S. Department of Labor. Accessed October 28, 2026. This public domain federal guidance is an educational reference; use the source publication and the applicable plan or employment documents for the full context and later updates. Fynoptic is independent and is not endorsed by the Department of Labor.