Mental Health Parity Rules - Updated Guidance and Enforcement
In its on-going effort to ensure compliance with mental health and substance abuse parity laws, the Department of Labor’s Employee Benefit Security Administration (EBSA) has issued additional guidance. In addition, the agency released a modified disclosure request form, and a summary of its enforcement activities of these laws during 2018.
Finalized FAQ Guidance
In large part, the FAQ guidance focuses on the application of nonquantitative treatment limitations imposed on mental health and substance abuse services, which must be comparable to those imposed on medical and surgical services. These FAQs provide clarifications relating to:
- Exclusions for treatment that are considered experimental or investigative (Qs 1 and 2);
- Prescription drug coverage (Qs 3 and 4);
- Step therapy protocols or fail-first policies as they apply to in-patient and out-patient treatment (Q5);
- Comparable provider reimbursement rates (Q6) and network provider participation standards (Q7); and
- Coverage for eating disorders (Q8).
FAQs 9-11 amplify prior guidance relating to disclosure of accurate plan materials to ensure current information is available to participants and enrollees. Under ERISA, if a plan utilizes a network of providers, then its summary plan description (SPD) must contain an up-to-date, accurate, and complete general description of the participating provider network. The provider directory can be provided as a separate document to accompany the plan’s SPD as long as it is furnished automatically, without charge, and the SPD contains a statement to that effect. Any changes made to the document can be communicated to participants by way of a summary of material modification. Similarly, the Affordable Care Act (ACA) requires insurers to make available an up-to-date, accurate, and complete provider directory to enrollees. Whether required by ERISA, or by the ACA, updated provider information can be provided electronically, as long as the relevant electronic disclosure methodologies are followed.
Finalized disclosure request form
Participants of individual and employer-sponsored group health plans, or their authorized representatives, have the right to request information about plan coverage, or to solicit information from the plan following an adverse determination of their mental health or substance use disorder benefits to support an appeal. EBSA revised its model form (Mental Health and Substance Use Disorder Parity Disclosure Request) which can be used for this purpose. While it is not mandatory for individuals to use this model notice, it does provide a means in which the individual, or his/her representative, can request benefit information. Group health plan sponsors or administrators are obligated to provide the requested information within 30 days of receiving the individual’s request.
Enforcement activities in 2018
For the past several years, EBSA has released a summary of its enforcement efforts of the mental health parity laws. According to its Fact Sheet, the agency investigated and closed 285 health plan investigations in 2018, of which 21 plans, were cited for violation. The agency investigates plans based on a number of parameters including annual and lifetime limitations, classification of benefits, financial requirements (deductibles, co-pays, coinsurance, or out-of-pocket maximums), treatment limits, cumulative financial requirements, as well as processing claims and disclosure violations. The majority of violations in 2018 involved annual and lifetime limit provisions (55%) and financial and quantitative treatment limitations (35%).
The bottom line is that EBSA is serious about compliance with the mental health parity laws.
Additional information relating to the mental health parity laws is available from EBSA’s dedicated webpage.
The information contained in this article is provided as general guidance and may be affected by changes in law or regulation. This article is not intended to replace or substitute for accounting or other professional advice. Please consult a CBIZ professional. This information is provided as-is with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.