Flexible Spending Account - Appeals Process

[Guest akwallace]

Our previous FSA vendor provided the appeals review process as a standard part of their administration service.

Our new vendor does not provide the service, and the SPD directs all first level appeals directly to the employer to review.

Is this typical practice for the employer to review the FSA appeals? If so, what steps do you take to do this?

Thanks.

[sloble@crowleyfleck.com]

The FSA is a group health plan subject to all of the claims procedure regulations. Under the regs, appeals must be made to "an appropriate named fiduciary" Reg 2560.503-1(h)(1). A named fiduciary is either named in the plan document or who is identified as a fiduciary by the plan sponsor. ERISA 402(a). In addition, the appeal may not be decided by the same individual who decided the initial claim. (Nor can the individual deciding the appeal be a subordinate of the initial claim decider.)

So, the way your arrangement is now is appropriate (TPAs are rarely named fiduciaries). Sounds like the TPA will decide the first level and then the appeals are decided by the named fiduciary (the employer--acting as a benefits committee). The regs provide more details on the "full and independent" review.