3.5 ERISA, ACA & No Surprises Act (NSA)
Key Takeaways
- ERISA governs self-funded employer health plans and federally preempts state insurance laws for those plans, so state mandates often do not apply.
- ERISA sets claims and appeals procedures, and members generally have 180 days to file an internal appeal of an adverse benefit determination.
- The ACA requires essential health benefits, first-dollar coverage of recommended preventive services with no cost-sharing, marketplace plans, and dependent coverage up to age 26.
- The No Surprises Act protects patients from balance billing for emergency services and for out-of-network facility-based care delivered at in-network facilities.
- When a No Surprises Act payment dispute arises between a provider and a payer, it is resolved through Independent Dispute Resolution rather than billing the patient.
Three Laws That Shape Plan Billing
Billers work with many plan types, and three federal laws explain the rules behind them: ERISA, the Affordable Care Act (ACA), and the No Surprises Act (NSA).
ERISA and Self-Funded Plans
The Employee Retirement Income Security Act (ERISA) is a federal law that governs employee benefit plans, including most self-funded (self-insured) employer health plans. In a self-funded plan, the employer bears the claims risk and often hires a third-party administrator to process claims.
Key ERISA points for billers:
- Federal preemption. ERISA preempts state insurance laws for self-funded plans. This means many state mandates — coverage requirements, prompt-pay rules, certain consumer protections — may not apply to a self-funded ERISA plan. Identifying whether a plan is self-funded or fully insured changes which rules apply.
- Claims procedures. ERISA sets standardized claims and appeals procedures, including required timeframes for the plan to decide claims and respond to appeals.
- Appeals timeline. A member generally has 180 days from an adverse benefit determination to file an internal appeal. After internal appeals are exhausted, external review may be available.
ACA Billing-Relevant Provisions
The Affordable Care Act introduced coverage rules that affect billing every day:
| ACA Provision | Billing Impact |
|---|---|
| Essential health benefits (EHBs) | Individual and small-group plans must cover ten benefit categories (e.g., ambulatory care, emergency services, maternity, prescription drugs) |
| Preventive services, no cost-sharing | Recommended preventive services are covered with no copay, coinsurance, or deductible when delivered in-network |
| Marketplace plans | Plans sold on the Health Insurance Marketplace are organized by metal tiers (Bronze, Silver, Gold, Platinum) |
| Dependent coverage to age 26 | Adult children may stay on a parent's plan until they turn 26 |
| No annual or lifetime dollar limits | Plans cannot cap essential health benefits in dollars |
A practical billing rule: if a service is correctly coded as a covered preventive service in-network, the patient should owe nothing. A patient billed cost-sharing for a routine in-network preventive screening signals a coding or claim error.
The No Surprises Act
The No Surprises Act (NSA) protects patients from unexpected balance billing — being billed the gap between a provider's charge and the plan's allowed amount by an out-of-network (OON) provider the patient did not choose.
NSA-protected scenarios:
| Scenario | Protected? |
|---|---|
| Emergency services from an out-of-network hospital or provider | Yes — patient pays only in-network cost-sharing |
| Out-of-network facility-based providers (e.g., anesthesiologist, radiologist, pathologist) at an in-network facility | Yes — patient cannot be balance billed |
| Air ambulance from an out-of-network provider | Yes |
| A patient who knowingly chooses an out-of-network provider and signs a valid notice and consent | Generally not protected (limited situations) |
| Ground ambulance | Generally not covered by the NSA's federal protections |
When the provider and plan disagree on the payment amount for an NSA-protected service, they do not bill the patient the difference. Instead, the dispute goes through Independent Dispute Resolution (IDR) — an arbitration process in which a neutral entity selects between the parties' proposed payment amounts.
A patient is treated at an in-network hospital, but the anesthesiologist who provides care is out-of-network. The anesthesiology group sends the patient a bill for the balance above what the plan paid. Which law was violated?
A biller is told a patient's health coverage is a large employer's self-funded plan. The patient's state has a law requiring coverage of a specific service. Which statement is most accurate?