May 23, 2018
On April 23, 2018, the Departments of Labor, Treasury, and Health and Human Services released several pieces of guidance on issues arising under the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), including 2017 enforcement actions, guidance on mental health parity implementation, and an action plan for enhanced enforcement in 2018.
The guidance includes:
Highlights of the April 2018 guidance
2017 MHPAEA Enforcement Actions
The DOL actively enforces MHPAEA during audits of employer-sponsored group health plans. These cases may stem from participant complaints where the facts suggest the problems are systemic and adversely impact other participants. Penalties for parity violations are limited to equitable relief; if violations are found by a DOL investigator, the investigator requires the plan to remove any offending plan provisions and pay any improperly denied benefits.
Each year the DOL publishes a fact sheet summarizing its enforcement activity during the prior year. Out of the 187 applicable investigations where MHPAEA applied, the DOL cited 92 violations for noncompliance with parity rules in 2017. The fact sheet provides 6 examples of MHPAEA enforcement actions and several are noteworthy because of their required corrections:
Proposed FAQs (Part 39)
The April 2018 proposed FAQs provide additional guidance regarding non-quantitative treatment limitations (NQTLs) and disclosure requirements under the MHPAEA. The proposed FAQs address whether specified plan designs are NQTLs and, if so, whether the plan designs comply with the MHPAEA. Among other things, the FAQs clarify that health plans cannot:
Another proposed FAQ provides that the complete exclusion of coverage, including prescription drugs, for a particular condition (e.g., bipolar disorder) does not violate the MHPAEA, although it could raise issues under other laws, especially if the program is insured and subject to state mandate requirements.
The proposed FAQs also address ERISA disclosure requirements for MH/SUD benefits.
The provider list may be furnished in a separate document that is accompanied by the plan’s SPD if it is furnished automatically and without charge and the SPD contains a statement to that effect.
Additional proposed FAQs address mental health treatment limitations involving provider licensure, network adequacy standards, emergency room care, and use of step therapy “fail first” protocols.
For more examples of plan provisions that could be red flags that a plan might be imposing an impermissible NQTL, see Warning Signs- Plan or Policy Non-Quantitative Treatment Limitations (NQTLs) that Require Additional Analysis to Determine Mental Health Parity Compliance.
Updated Draft Model Disclosure Form
The Departments have also issued an updated draft model disclosure form (initially released in June 2017) that plan participants can use to request MH/SUD-related information from their plan or insurer. Plan participants are not required to use the draft model form to request information about their MH/SUD benefits; plan sponsors and issuers must respond to participant requests for this information even if the model form is not used.
The updated form includes expanded background language and additional examples. For instance, the form now includes several examples of factors used in the development of a NQTL (e.g., excessive utilization and recent medical cost escalation) and evidentiary standards used to evaluate those factors.
The guidance also includes an updated MHPAEA self-compliance tool that group health plans can use to determine whether they are compliant with the MHPAEA. The tool is the same audit checklist used by DOL investigators for enforcement purposes.
The updated self-compliance tool has significantly more comprehensive guidance regarding NQTLs and disclosure, along with additional examples of what parity is and what it is not.
The DOL has stated it will update the self-compliance tool every two years with additional guidance on MHPAEA’s requirements, as appropriate.
Next Steps for Employers
It is clear from the release of this guidance that mental health parity enforcement remains a high priority for the U.S. Department of Labor.
In light of the new guidance and enhanced enforcement, sponsors of health plans and plan administrators should review with their benefit consultants, legal advisors, and third-party administrators or insurance carriers their practices and plan provisions to ensure their compliance with the MHPAEA and take any corrective action. The new proposed FAQs, if finalized, should serve as a guide for future enforcement actions. Employers may also use the updated self-compliance tool to assist with assessing their health plans’ compliance.
About the Author. This alert was prepared for The Fedeli Group by Marathas Barrow Weatherhead Lent LLP, a national law firm with recognized experts on the Affordable Care Act. Contact Peter Marathas or Stacy Barrow at email@example.com or firstname.lastname@example.org.
The information provided in this alert is not, is not intended to be, and shall not be construed to be, either the provision of legal advice or an offer to provide legal services, nor does it necessarily reflect the opinions of the agency, our lawyers or our clients. This is not legal advice. No client-lawyer relationship between you and our lawyers is or may be created by your use of this information. Rather, the content is intended as a general overview of the subject matter covered. This agency and Marathas Barrow Weatherhead Lent LLP are not obligated to provide updates on the information presented herein. Those reading this alert are encouraged to seek direct counsel on legal questions.
© 2018 Marathas Barrow Weatherhead Lent LLP. All Rights Reserved.
October 20, 2022
On October 18, 2022, the Internal Revenue Service (IRS) released Revenue Procedure 2022-38, which increases the health flexible spending account (FSA) salary reduction contribution limit to $3,050 for plan years beginning in 2023, an increase of $200 from 2022. Thus, for health FSAs with a carryover feature, the maximum carryover amount is $610 (20% of the $3,050 salary […]
August 14, 2018
The Affordable Care Act (ACA) requires insurers who plan on modifying plan premiums to submit their rates to either the state or federal government for review. This applies to plans included on state and federal healthcare insurance exchanges. The rate review process is designed to improve insurer accountability and transparency. It ensures experts are evaluating whether the proposed rate […]