In 2021, Congress passed the Consolidated Appropriations Act to put teeth into the Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008.
As a result, employers sponsoring physical and mental health coverage must ensure the coverage limits are equal for medical/surgical benefits and mental health/substance use disorder benefits.
The Department of Labor has warned that employers who aren’t in compliance are subject to enforcement actions and can face potential lawsuits from employees. Jay Kirschbaum, World Insurance Associates’ Benefits Compliance Director and Senior Vice President, explains that providing equal coverage is problematic for insurers because mental health issues, such as ADHD, are more complicated to diagnose than physical ailments. Regarding physical ailments, telehealth providers allow approximately 30 minutes for the diagnosis and prescription of medication, which is insufficient for mental health issues.
Who Is Responsible for Ensuring Parity?
While the mental health parity rules target insurers and employer-sponsored group health plans, the latter often rely on the insurance companies to properly follow the rules. According to the Employee Retirement Income Security Act (ERISA), though, employers play the role of fiduciaries for both health and welfare benefits and retirement plans.
Employers are responsible for ensuring that their providers follow the rules. The MHPAEA does not make it obligatory for employers to offer mental health coverage, but if they do, coverage must be on par with medical and surgical benefits.
Mental health treatment cannot have separate or higher deductions for both co-pays and out-of-pocket expenses if the same doesn’t apply to medical benefits.
Nonquantitative treatment limitations (NQTL) make achieving parity more challenging. NQTLs refer to any factors that limit the scope or duration of the provided benefits or services and can include, but are not limited to, formulary design for prescription drugs, step therapy protocols, and restrictions based on geographic location.
According to Kirschbaum, while coverage can differ, plans must provide valid reasons for the differences. For example, treatment for substance use disorder requires a more extended stay in a rehab center than postsurgical recovery.
Comparative Analysis Reports Required
Group health plans providing medical/surgical benefits and mental health/substance use disorder benefits are obligated to conduct comparative analyses of NQTLs to ensure parity. These analyses must be made available to anyone signed up for the plan, the DOL, the Department of Health and Human Services (HHS), or any other applicable authority upon request. Employers have 45 days to submit a copy of the analysis.
According to the DOL, plans and insurance companies are not as compliant as they should be. When requests were submitted for data, none of the targeted plans and issuers sent sufficient information, whereupon a third of them were immediately flagged for not being compliant. As a result, the DOL has implemented various changes to help with enforcement, including assembling a dedicated task force.
The increased attention to enforcement means employers must keep an eye on the ball and ensure the comparative analysis reports are being done. It’s also advisable to document all related activities because employers are liable for compliance and passing the blame onto the insurer will not work.
Some experts feel that it would be beneficial for employers to establish health and welfare benefits committees to prove they are doing their due diligence. Although it is not mandatory, it demonstrates the seriousness with which the employer is taking its fiduciary role.
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Copyright © 2022 Smarts Publishing. This is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.