Updated Mental Health Parity Compliance Tool
To assist health insurers, third party administrators, plan sponsors and employers in their compliance with the federal mental health parity laws, the Department of Labor’s Employee Benefit Security Administration (EBSA), in coordination with Departments of Health and Human Services and the Treasury, continue to provide tools and guidance.
As background, the Mental Health Parity Act enacted in 1996, as amended by the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act in 2008, require that if mental health benefits and substance use disorder benefits are to be provided under a plan, the benefits must be offered in parity with covered medical and surgical services. Notably, these laws do not require plans to offer mental health or substance use disorder services. For this purpose, parity refers to plan benefits including annual and lifetime limitations, as well as financial and treatment limitations relating to both quantitative and non-quantitative services.
In its bi-annual obligation to provide a compliance tool, EBSA released a revised version of the Self-Compliance Tool on October 26, 2020. The Compliance Tool reiterates the requirements of the mental health parity laws, and provides illustrations of parity as well as compliance tips. This advisory, initially released in 2018 (see our prior Benefit Beat article), has been modified as a result of public responses received by EBSA and as a result of its enforcement actions. Of particular note, the revised Tool broadens the following components:
- Methods for establishing both in-network and out-of-network provider reimbursement rates, particularly with regard to the non-quantitative treatment limitations requirements;
- Examples and illustrations of compliance and methods to correct parity violations;
- Best practices for establishing an internal compliance plan, together with examples of the types of records that plans should be prepared to provide in the event of a DOL investigation, as well as protocols for internal monitoring and review when responsibilities are delegated to other entities; and
- Warnings or red flags of potential parity violations.
Plan sponsors will want to work with their insurers, or third party administrators as applicable, to ensure compliance with the law, not only because it is the right thing to do but also because compliance with the law continues to be a priority for the Department of Labor, as evidenced in its 2019 Enforcement Action Fact Sheet and Compendium.
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.