By: HUB’s EB Compliance Team

Following up on some proposed FAQs and documentation that we told you about last year, the U.S. Department of Labor (“DOL”) recently finalized the FAQs guidance and released additional documentation covering Mental Health Parity and Addiction Equity Act (“Mental Health Parity”) issues. There were not many significant changes from the proposed FAQs. In part, that means they still contain a potential land mine for employers. However, overall the package provides valuable insight into the Mental Health Parity rules and how the DOL is enforcing them. The package included (1) final FAQs, (2) a request form participants can use, and (3) an enforcement fact sheet (with a separate introduction and an appendix with links to Mental Health Parity Guidance).

Background

In general, the Mental Health Parity rules do not allow health plans to impose more restrictive terms to mental health and substance use disorder (MH/SUD) benefits than they apply to medical and surgical benefits. This applies to financial requirements (like copays and coinsurance) as well as treatment limitations (such as visit limits).

It also applies to “nonquantitative treatment limitations” (or NQTLs). NQTLs are treatment rules and processes that aren’t numerical, like preauthorization and definitions of medical necessity. These rules must generally be consistent, and applied consistently, under the terms of the health plan or insurance coverage.

FAQs

In what was a first, as far as we can tell, the DOL released proposed frequently asked questions April of last year and asked for comments. The FAQs have now been finalized without too many substantial changes (the final FAQs are available here).

Provider Directories. Of most potential concern for employers, the FAQs note that a provider list is essentially part of the plan’s summary plan description (SPD). Most insurers and third-party administrators will include a link to their provider list or provide instructions how to access it online.

In the proposed FAQs, the DOL said that an employer can only do that if it complies with the DOL electronic distribution safe harbor. The final FAQs do not contain the same direct statement. However, the discussion of providing the provider list electronically includes a footnote (number 24 in the document) that has a reference to the same DOL electronic distribution safe harbor. Thus, it appears the DOL has not changed its view on this point.

The safe harbor generally requires that employees have regular work-related computer access as a key part of their job or else provide consent. For workforces that do not have regular computer access (such as in the hospitality, transportation, agriculture, construction, and manufacturing industries), this would mean employers either have to obtain employee consent to electronic distribution or provide a full provider list with every SPD (and update it as it changes, which can be frequent). This is a very difficult standard for many employers.

Other NQTL Examples. The FAQs also provide examples of NQTLs that are, or are not permissible under the Mental Health Parity rules.

  • Excluding treatment for a condition is not a violation. Mental Health Parity does not require coverage of mental health conditions; it only requires that, if they are covered, they are provided parity. The FAQs correctly note that state laws may require insured plans to cover some conditions, however.
  • Applying more failures under “step therapy” or “fail first” protocol to MH/SUD benefits is probably a violation. If a plan can show that there is sufficient evidence in medical literature for the differential treatment, then it may be okay. However, the stated assumption of the question is that this is unlikely.
  • Applying a higher standard for whether a treatment is “experimental” to MH/SUD treatments than medical/surgical treatments is a violation.
  • Deviating from prescription drug treatment guidelines is a violation if it has the effect of reducing access to medications that treat MH/SUD benefits.
  • Applying higher standards for MH/SUD practitioners to be “in-network” than the standards that apply to medical/surgical practitioners is a violation. This can even include paying non-physician practitioners less under MH/SUD benefits than the plan does for physicians who treat MH/SUD while providing the same reimbursement for physician and non-physician practitioners for medical/surgical benefits.
  • Excluding inpatient, out-of-network treatment for MH/SUD benefits, but not medical/surgical benefits is a violation.

Clarity Lost. Unfortunately, the final FAQs removed one point that would have provided additional clarity with regard to the treatment of acute physical injuries that are a result of mental health conditions. For example, assume someone goes to the ER with a laceration that is a result of them cutting themselves when having a mental health episode. Is treatment for the cut a medical/surgical benefit or MH/SUD benefit?

According to the proposed FAQ, it depended on the terms of the plan. As long as the terms of the plan were consistent with federal and State law, then if the plan viewed the treatment as an MH/SUD benefit, then the proposed FAQs said that’s how the DOL will view it. However, this question and its answer have been removed from the final. It is unclear what this means, so plans should be cautious in relying on their plan terms to characterize these injuries as medical/surgical or MH/SUD.

Enforcement Fact Sheet

The key takeaway for employers from the Mental Health Parity enforcement fact sheet is the examples of closed investigations. These provide additional examples of plan terms and processes that are not permitted, such as:

  • Requiring a written treatment plan and only requiring for MH/SUD conditions that could be improved (not just managed) by treatment (without similar requirements for medical/surgical benefits).
  • Requiring preauthorization for outpatient MH/SUD benefits after 24 visits, with no similar requirement for medical/surgical benefits.
  • Charging a higher copayment (e.g., $40) for MH/SUD outpatient visits compared to the predominant copayment (e.g., $20) for outpatient medical/surgical benefits.
  • Denying continued coverage for MH/SUD treatment if measurable goals and continued progress are not met, even though similar requirements were not imposed on medical/surgical benefits.

Participant Request Form

The package also includes a form participants can use to request information about a plan’s coverage of MH/SUD benefits. This is not significantly different than the proposed form released last year.

Takeaways

Employers should evaluate how they are providing provider directory information in light of this guidance. The DOL’s electronic delivery rules are described as a “safe harbor.” Generally, this means if you comply with them, the DOL cannot second guess you. If you don’t, it doesn’t necessarily mean you’re non-compliant; it just means the DOL has the ability to question it. In practice, however, the DOL seems to view the electronic delivery “safe harbor” as a strict set of rules to be followed.

Additionally, employers may want to familiarize themselves with the kinds of impermissible plan designs described in the FAQs and enforcement fact sheet. For self-funded employers, this may go directly to how they design their plans. For all employers, it will help them to identify potential Mental Health Parity issues when they catch wind of participant complaints and allow them to press their insurers or third-party administrators on how the plans are operated.

Finally, employers may want to review the proposed request form for participants. It will give some idea of what these requests might look like. This will allow employers to recognize them if/when they see them.

If you have any questions, please contact your HUB Advisor. View more compliance articles in our Compliance Directory.

NOTICE OF DISCLAIMER

The information herein is intended to be educational only and is based on information that is generally available. HUB International makes no representation or warranty as to its accuracy and is not obligated to update the information should it change in the future. The information is not intended to be legal or tax advice. Consult your attorney and/or professional advisor as to your organization’s specific circumstances and legal, tax or other requirements.