The Obama administration released new regulations that give consumers new and expanded rights to appeal denials of health insurance claims.

The regulations will make it easier for consumers to dispute an insurer’s claims denials -- directly to their insurers and then, if necessary, to an independent, third-party review boards. Health plans will have to pay the cost of external appeals, and if they're overruled, they must cover the disputed claim in full.Consumer’s coverage will continue during the appeal.

The rule issued on Thursday is part of the nation’s new health care law will apply to new health plans that begin on or after September 23. The rules do not apply to "grandfathered" plans that existed on March 23, 2010, when the health law was enacted.

Although most health plans already have a system for appeals — and 44 states provide for some form of outside review — the level of consumer protection varies greatly, and in some states, the outside reviewer is hired by the insurer that denied the claim.

In the current system, the federal rules are more stringent with insurers and friendlier to consumers. The federal regulation will require a clear explanation when a claim is denied.

Next year, about 40 million consumers in employer and individual plans will benefit from the new protections. By 2013, the number of people in covered plans will rise to 88 million.

Under the regulations, states are to adopt the new external review standards by July 2011.