Employers that offer group health benefits need to be ready to respond when employees and providers request benefit documents. In addition to routine requests for plan documents and summary plan descriptions (SPDs), employers need to be prepared to handle a new type of request: documents related to the plan’s compliance with federal requirements for mental health and substance use disorder benefits.
The federal Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) generally requires health plans to provide mental health and substance use disorder (MH/SUD) benefits on par with medical and surgical benefits. Employer-sponsored plans do not have to include MH/SUD benefits, but if included, the benefits must be at least as good as the plan’s medical and surgical benefits in the same category (e.g., inpatient, outpatient, prescriptions).
Further, the MHPAEA requires that health plans and insurers disclose to plan participants, including current and potential participants, and to contracting providers the criteria that the plan uses in determining medical necessity for MH/SUD benefits. Plans also must make available to claimants the reasons why the plan denies benefit payments.
A few types of plans are exempt from the MHPAEA. Examples include retiree-only plans, small employer plans based on a cost exemption, small group plans in some states, and certain self-funded plans sponsored by governmental employers.
For several years, federal regulators have attempted to clarify the MHPAEA’s disclosure requirements, along with similar requirements under the Employee Retirement Income Security Act (ERISA) applying to plans sponsored by non-governmental employers and the Affordable Care Act (ACA). New guidance released last month goes a long way in helping to clarify the requirements for employers and insurers.
On June 16, 2017, the Departments of Labor (DOL), Treasury, and Health and Human Services released a draft model form that plan participants and their authorized representatives (including providers) may use to request information about treatment limits from the health plan or insurer. Employers or plans that receive this type of request, whether on the DOL’s draft form or a similar form or letter, must respond within 30 calendar days. Failure to respond may result in penalties of up to $110 per day.
The draft form, called the Mental Health and Substance Use Disorder Parity Disclosure Request, advises the participant or provider that limits cannot be applied to MH/SUD benefits unless the limits are comparable to those applied to medical and surgical benefits.
To comply with the request for information, the plan’s response must:
- Provide the specific plan language regarding the limitation and identify all of the medical and surgical and MH/SUD benefits to which it applies in the relevant benefit classification;
- Identify the factors used in the development of the limitation and the evidentiary standards used to evaluate the factors;
- Identify the methods and analysis used in the development of the limitation; and
- Provide any evidence to establish that the limitation is applied no more stringently, as written and in operation, to MH/SUD benefits than to medical and surgical benefits.
The model request form was included as part of an FAQ that summarizes key provisions of the MHPAEA and the importance of plan participants and providers being able to get pertinent plan information. The FAQ also clarifies that eating disorders are mental health conditions and therefore are covered by the MHPAEA.
In summary, employers that offer group health coverage that includes any benefits for mental health or substance use disorders should be familiar with the MHPAEA since the basic requirements have existed for many years. More recently, however, federal rules have expanded the scope of information that plans must disclose to participants and their health care providers.
Many employers offer coverage through group insurance arrangements, so benefit determinations are made by the insurer. Other employers have self-funded plans for which they are responsible for administering benefits and claim appeals. In either case, employers can expect to receive MHPAEA information requests and need to identify how they, or the insurer or claims administrator, will respond within 30 days.