For many employers, 2015 health plan open enrollment is underway. While many of you have already tackled or are in the midst of tackling looming compliance deadlines, there seem to be a number of issues that are catching employers by surprise, or at least sneaking up on them. To help you cover your bases, this Alert focuses on four issues that may require your immediate attention -- Mental Health Parity Rules, HPID Requirements, First Reinsurance Fee Payments and, Treatment of Temporary Employees under Pay or Play Rules -- along with hot off the presses guidance on Reference-Based Pricing and MOOP Limits.
Mental Health Parity Rules Require Immediate Attention
In November 2013, three federal agencies issued final regulations under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 ("MHPAEA"). These stringent new rules start applying to calendar-year plans on January 1, 2015.
Self-Funded Health Plans Most Affected. Employers with self-funded major medical plans should be the employers who are most concerned about these rules. It appears that insurers will address the rules for fully-insured major medical plans, although this is not completely clear.
Quantitative Treatment Limitations. MHPAEA is challenging because it requires an employer to conduct two different analyses on its plan. First, the employer must predict what next year's claims will be -- information an employer may not necessarily have. The employer then tries to identify whether the plan contains various "quantitative treatment limitations", such as deductibles, copayments and coinsurance. Most plans have these, of course.
If the plan does have such quantitative treatment limitations, the employer then engages in a mathematical determination of whether the quantitative treatment limitations apply to "substantially all" the medical / surgical benefits and, if so, what is the "predominant" limitation. If the plan has multiple tiers of copayments and coinsurance the analysis is often somewhat time-consuming. The analysis is easier if the plan only has a single level of copayments and coinsurance.
Nonquantitative Treatment Limitations. Once an employer has finished that analysis, it should then review whether the plan contains any "nonquantitative treatment limitations", such as standards for provider admission and medical management techniques (such as excluding benefits based on whether they are "medically necessary"). Most plans also have these, of course.
If the plan does have these "nonquantitative treatment limitations", the employer then verifies whether the limitations apply more "stringently" to mental health / substance use disorder benefits than medical / surgical benefits. "Stringent" for these purposes is not a mathematical test -- it is more of a subjective test. While subjectivity can be helpful, it also can create confusion and uncertainty.