Mental Health Parity Matters

By Mary C. Moffatt

“Group health plan compliance.” 

Yes, I know … most readers likely consider such topics about as exciting as reading a mutual fund prospectus. But before you turn the page, ask yourself a couple of questions: 

(1) Does your company’s group health plan provide mental health/substance use disorder benefits? If so, are those benefits in parity with every classification in which medical/surgical benefits are provided?

(2) In the event of a DOL audit regarding the plan’s compliance with the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), will you be ready? Will you have the comparative analysis documentation ready?   

Although the MHPAEA is over 10 years old, it has just recently received renewed attention for enforcement by the Departments of Labor, Health & Human Services, and Treasury (“the Departments”). This article will review the origins of these enforcement efforts and explore what steps plan providers, employers (in their role as plan sponsors), and issuers should take now in order to be ready for a potential plan review by the Departments.       

Background.

The MHPAEA requires that group health plans and issuers maintain parity between medical and surgical benefits and mental health and substance use disorder (MH/SUD) benefits. If a plan does offer MH/SUD coverage, it must do so in parity with (in other words, equivalent to) the coverage provided under the plan for physical/medical conditions. In application, this means that benefit terms such as co-pays, deductibles, the number of treatment events available, prior authorization requirements, maximum benefit limits, etc. must be the same for MH/SUD as the plan provides for medical or surgical services. For example, group health plans are not permitted to impose annual or lifetime financial limits on mental health benefits that are less than such limits imposed on medical or surgical benefits. 

Most group health plans will be covered by the MHPAEA unless they have been “grandfathered” in, which means the plan was created before March 23, 2010, or falls into one of the other limited exceptions. If an employer is not sure about whether it’s group health plan is required to follow federal parity laws, the employer should ask the insurance carrier agent, or obtain legal guidance to determine coverage. Where applicable state law has stronger parity requirements than the MHPAEA, the plan must follow state law. 

The MHPAEA requires the comparison of group plan benefits to be based on six benefit classifications: (1) inpatient, in network; (2) inpatient, out-of-network; (3) outpatient, in network; (4) outpatient, out-of-network; (5) emergency care, and (6) prescription drugs. If a plan provides coverage for mental health/substance use disorder in any of the six categories, it must also provide such coverage in all of the categories. Treatment for mental health may include coverage for therapy, inpatient and outpatient treatment, medication management for depression, bipolar disorder, and applied behavioral analysis for the treatment of autism spectrum disorder. Treatment for substance use disorder from alcohol, tobacco and drugs may include detox medications and other therapy, behavioral counseling, etc. 

There are two types of coverage requirements under the MHPAEA: (1) financial requirements and (2) quantitative treatment limitation requirements. Group health plans covered by the MHPAEA are required to ensure that the financial requirements and treatment limitations on MH/SUD benefits are no more restrictive than those that apply to medical/surgical benefits; these requirements are generally referred to as financial requirements and quantitative treatment limitation requirements (QTL). The MHPAEA requires that nonquantitative treatment limitations (NQTL) be no more restrictive for MH/SUD benefits than for medical/surgical benefits under the same plan, which includes such benefit terms as preauthorization and precertification requirements; medical necessity determinations; standards for provider admission to participate in a network; nutritional counseling limitations; exclusions and/or specific treatment for certain conditions; and standards for providing access to out-of-network providers.

The Department of Labor’s Employee Benefits Security Administration (DOL/EBSA) maintains a MHPAEA self-compliance tool on its website to help group health plans, sponsors, plan administrators, and group and individual market health issuers determine whether a particular group health plan or health insurance issuer is in compliance with MHPAEA, which is available at www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/self-compliance-tool.pdf.

Enforcement Update

The Consolidated Appropriations Act of 2021 (CAA) amended the MHPAEA to require plans (including self-insured plans) to perform and document a comparative analysis of the NQTLs for medical surgical benefits in comparison to MH/SUD benefits in the plan. The law requires plans and issuers to make their NQTL comparative analyses available to the Secretary of Health and Human Services (HHS) or applicable state authorities upon request.   

The comparative analysis must include specific and detailed information such as the specific plan terms; a description of all MH/SUD versus medical/surgical benefits in each respective benefits classification; the factors used to determine the MH/SUD benefits and medical or surgical benefits; the evidentiary standards used for the factors identified; and the specific findings and conclusions reached by the plan or issuer, including any results of the analyses which indicate that the plan is/is not in compliance with the MHPAEA.   

If the submitted report is insufficient, the Departments will ask for more information, and where the Departments find a problem with the plan, the plan sponsor or issuer will have 45 days to correct the issue. If the Departments are not satisfied that the problem has been corrected, the plan will be required to notify its plan participants that the plan violates the MHPAEA.

The Departments have indicated that a general statement of compliance, coupled with a conclusory reference to broadly stated processes, strategies, evidentiary standards, or other factors is “insufficient to meet the statutory requirement” and plans and issuers should avoid responding to a request for comparative analyses by producing a large volume of documents “without a clear explanation of how and why each document is relevant to the comparative analysis.” 

In a Joint Report submitted to Congress in March of 2022, the Departments reviewed the common pitfalls in plans such as failure to demonstrate compliance of NQTLs, failure to specify which benefits in covered classifications were affected by NQTLs, and submitting analyses that were simply nonresponsive to the Departments’ request. The Joint Task Force found that no plan was able to produce comparative analyses and satisfy the Departments by the initial deadlines.  

In their Joint Report, the Departments noted that mental health is a vital component of overall health and well-being. It also noted that COVID-19 pandemic has brought into focus the importance of attending to mental health and substance use disorder health, and that the pandemic “exacerbated existing barriers to and health disparities in accessing treatment.” The Departments noted that given the rapidly escalating challenges mental health and substance use disorder conditions have posed during COVID-19, “greater enforcement of MHPAEA is essential” to integrating treatment of these benefits with those available for physical health. The report states “this new enforcement authority is the cornerstone of the Departments’ heightened enforcement efforts … These efforts have already born results, and the Departments will continue to devote greater resources to enforcement so as to take full advantage of these new and existing tools that Congress has provided to the Departments …” 

The 2022 MHPAEA Report to Congress by the Departments also provided information regarding notable enforcement results. For example, the DOL/EBSA found a group health plan’s financial requirements were not compliant with MHPAEA in the classification of outpatient/in network services in that the participants seeking mental health/substance use disorder benefits were being charged higher co-pays when compared to medical surgical benefits in the same classification. As a result, plan fiduciaries were required to re-adjudicate claims over a four-year period, which concluded that the benefits were not in parity compliance. This resulted in required reimbursements of overpaid cost-sharing payments to 1,945 affected participants in the total reimbursement amount of $82,065. 

Conclusion.

It is clear the Departments have focused their attention on parity issues, as well as in raising awareness and additional mechanisms for enforcement of the MHPAEA requirements. Plan sponsors should prioritize compliance in plan terms, as well as in understanding the appropriate steps to conduct the comparative analysis required, and in actually preparing the analysis which will be best accomplished by working with insurance carriers, third-party administrators, and legal counsel to ensure compliance as well as addressing areas of noncompliance. Plan sponsors (i.e., employers) should contact their insurance carriers (or third-party administrators) and inquire as to what specific steps these agencies are taking to prepare for compliance with Section 203 of the CAA, and whether the plan is in full compliance with the MHPAEA.