(a) The contractor shall use reconsiderations to explain actions taken or to be taken and to settle disputes with applicants and participants.

(b) When an applicant or participant makes any oral or written request of a contractor's employee which indicates a desire to have any action of the contractor reviewed, and the matter cannot be resolved by that employee, the applicant or participant shall be informed of the right to reconsideration by the contractor.

(c) If the applicant or participant indicates that he/she wants a reconsideration one shall be arranged.

(d) An employee of the contractor, who has authority to reverse the action, or failure to act, and who did not participate in the determination to take the action complained of, shall conduct the reconsideration. The reconsideration shall be made at such a time and in a manner as to afford a meaningful opportunity to resolve the dispute. Provisions shall be made for reconsiderations by mail, telephone and in person.

(e) A determination on the reconsideration shall be made within 30 days of the request and a notice of determination after reconsideration shall be mailed to the applicant or participant at his/her designated address. Where a reconsideration is favorable to the applicant, this determination notice will include a statement that the applicants will be reimbursed for program-eligible costs incurred from the date on which the annual coverage period would have commenced if the application was approved initially.