Monday, July 12, 2021
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The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) and final regulations require that group health plans and insurers that provide mental health or substance use disorder benefits provide coverage for those services in the same manner as medical and surgical benefits.
The MHPAEA applies to most group health plans, with limited exceptions for retiree-only plans and small grandfathered and self-insured group health plans for employers with fewer than 50 employees. Plans subject to these requirements are subject to three different mandates:
Annual or Lifetime Limits: Group health plans that apply annual or lifetime dollar limits for medical/surgical benefits must generally apply those same (or higher) dollar limits for mental health benefits and substance use disorder benefits.
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Parity as to Financial Requirements and Quantitative Treatment Limitations: Plans must provide uniformity between medical/surgical benefits and mental health or substance use disorder benefits as to financial requirements (e.g., deductibles, copays, coinsurance, and out-of-pocket maximums) and quantitative treatment limitations (e.g., number of treatments, visits, or days of coverage).
Parity as to Non-quantitative Treatment Limitations (NQTL): Plans must comply with other requirements for non-quantitative treatment limitations (e.g., medical management standards, step therapy, or formulary design, excluding benefits based on medical necessity or medical appropriateness, or non-uniform preauthorization requirements).
Until recently, compliance efforts and federal guidance focused on the first two mandates. Since analyzing NQTLs is so difficult, many entities glossed over ensuring NQTL parity in the past, with very few consequences. However, the Consolidated Appropriations Act of 2021 (CAA) added several provisions related to transparency in group health plan coverage, including compliance with mental health parity laws. Specifically, group health plans must perform an annual comparative analysis of NQTLs that apply to mental health and substance use disorder treatments.
Insurance carriers and plan sponsors share responsibility for ensuring fully insured plans comply with the MHPAEA and any applicable state laws. Self-funded plan sponsors are solely responsible for preparing the analysis required for their plans.
At a high level, the CAA requires that plan sponsors and insurers prepare a written analysis documenting the following for each plan option offered:
A written description of each plan option’s terms of coverage by benefits classification, including relevant NQTL information.
A detailed description of what defined factors the plan uses to determine how NQTLs will apply to mental health and substance use disorder benefits and medical or surgical benefits.
The evidentiary standards used for the factors identified when applicable and any other source or evidence relied upon to design and apply the NQTLs to mental health and substance use disorder benefits and medical or surgical benefits.
Documentation and a comparative analysis of the processes, evidentiary standards, and other information sources the plan uses in applying NQTLs to both mental health or substance use disorder benefits and medical or surgical benefits; and
Details of the results of the analysis to indicate that the plan is or is not in compliance with MHPAEA NQTL requirements.
The results will be provided to the Department of Labor (DOL), Health and Human Services (HHS) and state agencies upon request. The Departments will generally request a copy when they are investigating potential MHPAEA violations or complaints regarding noncompliance with MHPAEA that concern NQTLs, although they can request a copy in other circumstances, including during a routine health plan audit.
If the agency’s review of the information indicates a parity violation, the plan will have 45 days to provide additional analysis or specify actions it will take to correct the violation. If the agency makes a final determination that the plan is still out of compliance, the plan must notify all enrollees of the noncompliance within seven days of the determination. In addition, the agencies will share the findings with applicable state officials.
Plan participants, beneficiaries, and enrollees will also be permitted to request copies of the comparative analysis and plan sponsors will be required to provide the information under ERISA.
Employer Next Steps
Since the CAA passed, DOL officials have made it exceedingly clear that MHPAEA compliance and the new NQTL analyses are at the top of their 2021 enforcement list, so plan sponsors need to act now to ensure their plans are compliant.
The comparative analysis will require considerable resources and expertise to complete. Plan sponsors with fully insured plans should reach out to their carriers to determine how the carrier will handle the requirements. Self-funded plan sponsors should put an action plan in place to complete the testing, either through their third-party administrator, benefits counsel, or actuarial vendor of their choice.
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Sam Slade is Managing Director, Employee Benefits, at The Hilb Group of New England, where he delivers consulting and brokerage services to local employers. He has extensive experience in all aspects of employee benefits, including underwriting, plan design, communications, compliance, and analytics, with a particular focus on alternative funding and self-insurance. Sam lives in South Kingstown with his wife and three sons.
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