Employers may need to act as a result of regulations implementing expanded health parity requirements for group health plans. The interim final rules, published in yesterday's Federal Register, require the integration and coordination of the medical, surgical, mental health, and substance use disorder benefits in such plans.
The expanded requirements were imposed by the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), signed into law in October 2008. They are generally applicable for plan years beginning after July 1, 2010 (January 1, 2011, for a calendar year plan).
As has been the case, group health plans will not be required to provide mental health and substance use disorder benefits under MHPAEA. However, those providing such coverage must now comply with new parity requirements for plan terms limiting benefits on a basis other than annual and lifetime dollar limits, while plans providing substance abuse benefits for the first time must comply with the existing parity provisions applicable to annual and lifetime dollar limits.
The interim final rules - released by the Internal Revenue Service, U.S. Department of Labor, and U.S. Department of Health and Human Services - provide substantial guidance on MHPAEA, including:
- Guidance for determining the "predominant" financial or treatment limitation that applies to "substantially all" medical/surgical benefits in a classification for purposes of identifying the basis for applying the parity requirement
- A requirement that the medical, surgical, mental health, and substance use disorder coverage that any participant (or beneficiary) can simultaneously receive be combined when determining the parity of benefits and practices, thus preventing an end run around the law through creation of technically separate plans
- A prohibition against cumulative financial requirements (e.g., deductibles and out-of-pocket maximums) or cumulative quantitative treatment restrictions (e.g., treatment or visit limits) being applied separately to mental health and substance abuse disorder benefits and medical and surgical benefits (these rules do not apply to lifetime or annual dollar limits)
- A prohibition on more stringent applications of discretionary standards applicable to non-quantitative treatment limitations (such as case management standards, prescription drug formulary design, standards for provider network participation, and conditioning benefits on completion of a course of treatment) to mental health and substance use disorder benefits
- A requirement that up to six separate benefit classifications, such as in-network/in-patient benefits, provided by a plan must be examined for parity
- Two new disclosure requirements relating to mental health and substance abuse disorder benefits?the criteria for medical necessity determinations, upon request of the beneficiary or provider, and a statement of the reasons for the denial of benefits (Note: These requirements will have a greater impact on governmental and church plans than on ERISA plans, largely subject to them already.)
The regulations do not define specific disorders, such as autism, as mental health or substance abuse conditions. Instead, they require that a plan's determination be based on the Diagnostic and Statistical Manual of Mental Disorders (DSM), state guidelines, or other generally accepted independent standards.
Although MHPAEA became effective on October 1, 2009, good faith efforts to comply with a reasonable interpretation of the statute will be taken into account for enforcement purposes. However, the regulations' preamble notes that such relief does not prevent participants or beneficiaries from bringing a private action under the statute.