Who: Generally, most group health plans and health insurers must comply with the mental health parity rules (if the plan offers mental health or substance use disorder benefits). (See additional exceptions below.)
What: The DOL and HHS has issued additional guidance to assist with compliance efforts.
When: Beginning on January 1, 2018, plans that require "fail first" or "step therapy" could violate the Parity's Act's "non-quantitative treatment limitation" (NQTL) rules.
The Mental Health Parity Act (MHPA) and Mental Health Parity and Addiction Equity Act
(MHPAEA) as amended by the Affordable Care Act (ACA) "generally requires that group health plans and health insurance issuers offering group or individual health insurance coverage ensure that the financial requirements and treatment limitations on Mental Health or Substance Use Disorder (MH/SUD) benefits they provide are no more restrictive than those on medical or surgical benefits".
The MHPA or the MHPAEA does not require group health plans to offer mental health or substance use disorder benefits, but to the extent that group health plans do offer such benefits, the plan (if subject to the rules) must comply with the parity requirements.
Exceptions apply to small employers with 50 or fewer employees that meet certain requirements and non-federal government plans with 100 or fewer employees in states who have adopted an expanded definition. (Note that under the ACA, small employers purchasing coverage through the small group market must typically offer mental health benefits as part of essential health benefits coverage.) Exceptions also apply to retiree-only health plans and plans with fewer than 2 active employees. While church plans are subject to mental health parity rules, self-funded non-governmental plans may opt-out of compliance. Plans may also qualify for an "increased cost" exception if specific guidelines are met and determinations are substantiated.
According to Mercer's report, mental health parity remains "a compliance challenge for employers." Last year, the DOL issued guidance on warning of signs of problematic plan language. It also urged firms to review guidance, make changes or face an audit.
Here are some of the plan provisions that the DOL has flagged as requiring careful analysis:
- Preauthorization and Pre-Service Notification Requirements. Provisions requiring scrutiny include blanket preauthorization requirements for mental health or substance use disorder benefits, preauthorization requirements for admission to certain treatment facilities (e.g., a precertification requirement for mental health inpatient treatment), and medical necessity review or prescription drug preauthorization provisions.An example of a fail-first strategy: Requiring mental health or addiction patients to try an intensive outpatient program before admission to an inpatient treatment if the same restriction doesn't apply to medical/surgical benefits.
- Fail-First, Probability of Improvement, and Patient Noncompliance Provisions. Questionable provisions in this category include those that impose progress or treatment attempt requirements on substance use disorder benefits (e.g., a requirement that a patient attempt two forms of outpatient treatment before inpatient substance use disorder treatment is available). The DOL also highlights provisions that require a likelihood of improvement (e.g., coverage of substance use disorder services only if they result in measurable improvement within 90 days), and those that exclude services if the patient fails to comply with the treatment plan (e.g., exclusion of benefits if the patient ends treatment for chemical dependency against medical advice).
- Written Treatment Plan. The DOL lists several provisions that require submission of a treatment plan for mental health or substance use disorder benefits (e.g., a requirement that an individualized treatment plan be submitted and updated every six months).
- Residential, Geographical, and Licensure Requirements. Red flags are raised by provisions that limit residential treatment, impose geographical limitations on where treatment may be provided, or require certain licensure of facilities where these requirements are not also imposed on medical and surgical benefits.