New Mental Health and Substance Abuse Parity Compliance Guidance for Large Employer-Sponsored Plans

New Mental Health and Substance Abuse Parity Compliance Guidance for Large Employer-Sponsored Plans

The federal Departments of Health and Human Services (HHS), Labor and Treasury recently released multiple pieces of guidance on how to comply with the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA).  The MHPAEA impacts private businesses that employed an average of at least 51 people during the prior calendar year, and state and local governmental employers that had an average of at least 101 employees, if these employers elect to cover any benefit that falls into the realm of mental health or substance abuse.  A mandate in the 21st Century Cures Act requires the HHS, Labor and Treasury Departments to improve large employer group mental health parity compliance, and so the assistance documents the Trump Administration released to help include (1) a series of new proposed frequently asked questions guidance for insurers and group health plans; (2) a self-compliance tool for insurers and large group plans; (3) a revised disclosure template for employers to provide to employees who request information about mental health and addiction treatment limitations from their insurer or group health plan; (4) a fact sheet on MHPAEA enforcement efforts in 2017; (5) an action plan from HHS; and (6) a report to Congress entitled “Pathway to Full Parity.”

The MHPAEA is a measure that most employer health plan sponsors need to understand better.  This law, which was passed over a decade ago, prevents fully-insured and self-funded large group health plans, as well as large group health insurance carriers that provide mental health or substance use disorder benefits from imposing any mental health or substance abuse benefit limitations that are less generous than any limits the plan places on medical and/or surgical benefits. Employer compliance liability exists even if an employer offers fully-insured coverage or if self-funded plan coverage is administered by a third party.

The Department of Labor has jurisdiction over private group health insurance plans concerning enforcement of MHPAEA provisions and the final MHPAEA regulation outlines the law’s detailed implementation requirements.  This guidance package is intended to help large group plan sponsors and health insurers better understand these rules, and the self-check tool was specifically released to assist employers in becoming fully compliant.

A focus in the FAQs includes how plans may legally handle experimental or investigative treatment exclusions to mental health or substance use disorder benefits. This section of FAQs includes a stipulation that a plan violates parity rules if it excludes all claims for applied behavioral analysis (ABA), which is a common therapy for autism spectrum disorder.   The FAQs also address limits on prescription drugs, including dosage limitations and full exclusions of coverage for certain diseases, including the exclusion of related prescription drugs.  Another common problem addressed by the FAQs is out-of-date and otherwise inadequate mental health provider directories.  Other topics covered include step therapy, the licensing of mental health providers, how group plans and issuers must ensure network adequacy, emergency room care, and finally residential treatment for eating disorders.

Another document relevant to employer plans is the revised disclosure form for employers to give employees who request information about how mental health and substance abuse claims decisions are made and any non-qualitative treatment limits that may be in their plan’s design.  Group health plans are required to disclose to participants criteria used for medical necessity claims determinations upon request, and this draft form is intended to help employees request/employers provide this information if needed.  Employer plans don’t need to use this form yet, but it is expected that they will once it is finalized later this year.

Finally, employers subject to MHPAEA will likely find the 2017 enforcement fact sheet interesting.  The document explains how federal MHPAEA enforcement works, and also notes that of the 187 MHPAEA investigations the Department of Labor closed in 2017, 92 entities were cited with violations for MHPAEA noncompliance.  This trend is likely to continue and even increase in 2018 and years following, given the mandate on parity compliance improvement and federal enforcement in the 21st Century Act, as well as increased public attention to mental health and substance abuse issues, including the national opioid addiction crisis.

Kistler Tiffany Benefits encourages our larger group clients to review the new guidance, particularly the new FAQs and self-compliance check tool.  If you have any questions about MHPAEA compliance, please contact your Kistler Tiffany benefits consultant.