13-1623. Self-funded portion of employee benefit plan; claim procedure; requirements.

The self-funded portion of an employee benefit plan shall provide for the following:

(1) A written claim for benefits shall be furnished to the plan sponsor (a) in case of a claim for benefits which provide any periodic payment contingent upon continuing loss, within ninety days after the termination of the period for which the plan sponsor is liable and (b) in case of a claim for any other loss, within ninety days after the date of such loss. Failure to furnish such written claim within the time required shall not invalidate or reduce any claim if it was not reasonably possible to give proof within such time and if proof is furnished as soon as reasonably possible and in no event later than one year from the time proof is otherwise required except in the absence of legal capacity;

(2) Indemnities payable for any loss, other than loss for which periodic payment is provided, shall be paid immediately upon receipt of a written claim for benefits. All accrued indemnities for loss which provide periodic payment shall be paid at least monthly, and any balance remaining unpaid upon the termination of liability shall be paid immediately upon receipt of a written claim for benefits;

(3) If a claim remains unsettled, the plan sponsor shall send to the covered employee, covered dependent, or authorized representative a letter every ninety days. The letter shall set forth specific reasons additional time is needed for investigation; and

(4) If a claim is denied or partly denied, a written notice of the denial from the plan sponsor, together with specific reason for the denial, shall be sent to the covered employee, covered dependent, or authorized representative. A denial may be appealed directly to the plan sponsor within sixty days after receiving the notice. The plan sponsor shall inform a covered employee, covered dependent, or authorized representative of its decision within sixty days after receipt of written appeal unless an unusual circumstance requires an extension of time to investigate or consider the appeal. If an extension is needed, the plan sponsor shall inform the covered employee, covered dependent, or authorized representative of the reason and the additional time needed which shall not exceed an additional sixty days. If the claim is denied or partly denied by the plan sponsor, a claim denial may be further appealed pursuant to section 13-1625.

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