Regulators Ramp Up Mental-Health Parity Efforts

Proposed guidance clarifies how mental-health parity rules apply to benefit limits

By Julia Zuckerman and Lysle Laderman © Conduent May 16, 2018
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The Departments of Labor (DOL), Treasury, and Health and Human Services (HHS) recently issued guidance that clarifies how mental-health parity rules apply to benefit limits, such as pre-authorization and medical-management techniques, with specific examples of parity standards for experimental or investigative treatment limits, drug-formulary design and provider networks.

The guidance package, which the departments issued on April 23, was comprised of:

Background

The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) generally prohibits group health plans that provide mental health or substance-use disorder (MH/SUD) benefits from imposing less favorable conditions or more stringent limits on those benefits than they do on the same classification of medical and surgical benefits. This federal law requires parity in financial requirements (like deductibles or co-payments) and quantitative treatment limits (such as number of covered visits). It also requires parity in nonquantitative treatment limits, which are non-numerical limits on the scope or duration of benefits, such as a pre-authorization requirement or a medical-management technique.

MHPAEA does not require a plan to cover any specific MH/SUD conditions; rather, it requires that if it covers an MH/SUD condition, it covers it in parity with medical/surgical benefits. Also, MHPAEA does not apply to retiree-only plans or to excepted benefits.

Participants, beneficiaries, and the DOL may file claims for payment of mental health benefits under the law's civil enforcement provisions. Failure to comply with MHPAEA also may trigger an excise tax of $100 per day for each individual to whom a failure relates, under Internal Revenue Code Section 4980D.

As part of its 2017 MHPAEA enforcement efforts, the DOL reviewed 187 group health plans and identified 92 MHPAEA violations. Additionally, it answered over 127 public inquiries in 2017 relating to MHPAEA.

[SHRM members-only: Managing Employee Assistance Programs]

Proposed FAQs

The proposed FAQs identify certain plan features as nonquantitative treatment limits that violate (and, in a few cases, do not violate) parity requirements. For instance, a plan may not unconditionally exclude all experimental or investigative treatments for MH/SUD conditions while covering certain experimental or investigative treatments for medical and surgical conditions on a treatment-by-treatment basis.

It's unusual for subregulatory guidance like FAQs to be proposed for notice and comment, a process typically reserved for proposed regulations. The departments may have chosen this approach to retain the flexibility of subregulatory guidance while incorporating specific stakeholder feedback.

Revised Disclosure Template

The proposed disclosure template is designed to help participants and beneficiaries request information on any limitations that may affect their MH/SUD benefits, with the idea of enabling them to evaluate parity. The draft form, which participants and beneficiaries can use to request information from plans even though it has not yet been finalized, gives the plan 30 days to respond to these requests.

Self-Compliance Tool

The self-compliance tool, which the DOL intends to update every two years to reflect any additional MHPAEA guidance, is designed to assist plan sponsors in determining whether their plans comply with MHPAEA requirements. Plan sponsors can use the tool to review plan terms and policies, and to monitor those of vendors or carriers to confirm MHPAEA compliance.

Focus on Enforcement

The guidance suggests that, a decade after MHPAEA's enactment, enforcement is now a stronger priority than ever.

Julia Zuckerman, JD, is director of the compliance consulting center at Conduent HR Services in Washington, D.C. Leslye Laderman, JD, LLM, is a principal in the firm's Knowledge Resource Center in the Greater St. Louis area. An unabridged version of this article originally appeared in the May 14, 2018, issue of FYI In Depth. © 2018 Conduent Inc. All rights reserved. Republished with permission.


Other Views on the Proposals

Self-Testing Recommended:

"All group health plans that provide MH/SUD benefits must comply with the MHPAEA," according to an analysis of the proposals by consultants at Willis Towers Watson. "These FAQs are a reminder for employers to undertake their own testing, particularly as the DOL is actively auditing employers for compliance."

"Plan sponsors may wish to dialogue with their insurers or third-party administrators [TPAs] to ensure they're supplying adequate explanation of a claim denial," noted an online post by a compliance attorney at Lockton, a benefits broker and consultancy. DOL investigators "at this point are permitting noncompliant plans to reassess claim denials and make the participants whole without additional enforcement penalties, so employers will likely find cooperation with the investigators to be a manageable course of action," the advisory noted.

The self-compliance tool "may be helpful for health plan administrators to work through plan exclusions and policies that may violate the MHPAEA, posted attorneys at law firm Brinker Biddle. "A plan administrator may use it to evaluate its TPA's or insurer's policies and procedures related to MH/SUD benefits." The attorneys "have seen a recent focus on reviewing coverage for autism and ABA therapy, residential treatment center benefits, and sufficiency of MH/SUD provider networks, and many other plan terms may be implicated as well."

Concerns About Provider-Network Disclosures:

"Perhaps the most surprising aspect of FAQs … was the proposed guidance regarding disclosure of the health care provider network in a plan's summary plan description (SPD)," noted a blog post by the law firm Proskauer.

The agencies' proposed rule would "require plan administrators to distribute hard copy health care provider lists when the ERISA electronic disclosure standards cannot be met," the post explained. "This proposed requirement deviates from the standard practice of directing plan participants to network administrator websites for provider lists and would be sure to significantly increase administration costs."

SHRM Online



Related SHRM Articles

Prepare for More Scrutiny of Mental Health Benefits, SHRM Online Benefits, July 2017

Mental Health Access Back on the Agenda, SHRM Online Benefits, September 2016



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