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.
- Under ERISA claims rules, members generally have 180 days to file an internal appeal of an adverse benefit determination.
- The ACA requires ten essential health benefit categories, first-dollar coverage of in-network preventive services with no cost-sharing, metal-tier marketplace plans, and dependent coverage 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.
- NSA payment disputes start with a 30-business-day open negotiation period and, if unresolved, go to Independent Dispute Resolution (IDR) — never the patient's bill.
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 governing employee benefit plans, including most self-funded (self-insured) employer health plans. In a self-funded plan the employer bears the claims risk and usually hires a third-party administrator (TPA) to process claims.
Key ERISA points for billers:
- Federal preemption. ERISA preempts state insurance laws for self-funded plans. Many state mandates — coverage requirements, prompt-pay rules, certain consumer protections — may not apply. Identifying whether a plan is self-funded or fully insured is the first move because it changes which rules govern.
- Claims procedures. ERISA sets standardized claims-and-appeals timeframes the plan must meet.
- Appeals timeline. A member generally has 180 days from an adverse benefit determination to file an internal appeal; once internal appeals are exhausted, external review may be available.
ACA Billing-Relevant Provisions
The Affordable Care Act introduced coverage rules that touch billing daily:
| ACA Provision | Billing Impact |
|---|---|
| Essential health benefits (EHBs) | Individual/small-group plans must cover ten categories (e.g., ambulatory, emergency, maternity, Rx) |
| Preventive services, no cost-sharing | In-network recommended preventive care has no copay, coinsurance, or deductible |
| Marketplace plans | 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/lifetime dollar limits | Plans cannot cap EHBs in dollars |
Practical 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 screening signals a coding or claim error.
The No Surprises Act
The No Surprises Act (NSA), effective January 1, 2022, protects patients from unexpected balance billing — the gap between an out-of-network (OON) provider's charge and the plan's allowed amount, when the patient did not choose the OON provider.
| Scenario | Protected? |
|---|---|
| Emergency services from an OON hospital or provider | Yes - patient pays only in-network cost-sharing |
| OON facility-based providers (anesthesiologist, radiologist, pathologist) at an in-network facility | Yes - no balance billing |
| Air ambulance from an OON provider | Yes |
| Patient knowingly chooses OON and signs valid notice-and-consent | Generally not protected (limited cases) |
| Ground ambulance | Generally NOT covered by federal NSA protections |
How NSA Payment Disputes Resolve
When the provider and plan disagree on the payment amount for an NSA-protected service, the patient is never billed the difference. Instead:
- A 30-business-day open negotiation period begins (initiated through the federal IDR portal).
- If unresolved, either party initiates Independent Dispute Resolution (IDR) — a "baseball-style" arbitration where a neutral certified IDR entity picks one party's proposed payment offer.
The patient owes only their in-network cost-sharing throughout; the provider's recourse is against the plan, not the patient.
The Good Faith Estimate and Self-Pay Patients
A frequently missed NSA piece: uninsured and self-pay patients are entitled to a Good Faith Estimate (GFE) of expected charges before a scheduled service. If the final bill exceeds the GFE by $400 or more, the patient may use the NSA's patient-provider dispute resolution (PPDR) process. Billers must generate accurate GFEs and document them, because an inaccurate estimate can be challenged.
Notice-and-Consent: A Narrow Exception
The one way an out-of-network provider may balance bill a protected patient is to obtain a valid notice and consent waiver — but this is sharply limited. It is not available for emergency services, nor for ancillary services like anesthesiology, radiology, pathology, neonatology, or for any service where there was no in-network provider available. The waiver must be given at least 72 hours before service (or 3 hours if the appointment is made same-day) and must include a good-faith cost estimate.
The exam tests that you cannot simply slip a balance-billing waiver into the registration packet for an emergency or for hospital-based specialists.
Reconciling the Three Laws
| Question | Look to |
|---|---|
| Is the plan self-funded, and do state mandates apply? | ERISA |
| Must this preventive screening be free in-network? | ACA |
| Did an OON provider surprise-bill the patient? | NSA |
| How long does the member have to appeal a denial? | ERISA (180 days internal) |
| Where does a provider-plan payment fight go? | NSA open negotiation, then IDR |
A Worked Example
A patient on a fully insured ACA marketplace Silver plan gets a screening colonoscopy in-network and is billed a $250 coinsurance. Because a screening preventive service in-network must carry no cost-sharing under the ACA, that $250 charge signals a coding error — likely the encounter was coded as diagnostic rather than screening, or a modifier was omitted. The fix is on the billing side, not a patient collection: the biller should review whether modifier 33 (preventive service) or the correct screening code was applied so the claim reprocesses at zero patient responsibility.
A patient is treated at an in-network hospital, but the anesthesiologist 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 learns a patient's coverage is a large employer's self-funded plan, and the patient's state has a law mandating coverage of a specific service. Which statement is most accurate?