Mental health parity is nowhere close to the top of most lists of benefit concerns. After all, the Mental Health Parity and Addiction Equity Act (MHPAEA) is eight years old and has never received the attention paid to other laws. Its rules are complex, requiring comparison of mental health/substance use disorder benefits with medical/surgical benefits in six separate classifications.
It is a mistake to ignore the MHPAEA, though, for at least three reasons.
First, mental health issues are abuzz in Washington. Witness increased public awareness of gun violence and opioid abuse. Several bills are pending, including HR 2646, a bi-partisan effort that would strengthen the MHPAEA. Also, earlier this year the President created a Mental Health and Substance Use Disorder Taskforce that will issue a report later this year that will identify gaps in parity implementation and discuss best practices.
Second, the regulatory agencies view mental health parity as a high priority. In May, DOL, Treasury, and HHS clarified in FAQ Part 31 that insurance companies or TPAs performing mental health parity testing cannot base the testing on their book of business. Instead, they must use plan-specific data when available. Also, in early June DOL and HHS provided a list of 15 red flags that indicate an issue with MHPAEA, including differing preauthorization requirements, likelihood of improvement provisions and written treatment plan constraints. DOL reviews mental health parity in its plan audits.
Finally, May’s final §1557 regulations have brought one mental health condition to the forefront: gender dysphoria. Health programs and activities receiving HHS funds cannot discriminate based on gender, among other protected categories. Blanket exclusions based on gender are prohibited -- this includes a broad exclusion of all items and services related to gender transition/re-assignment. Employers covered by final 1557 regulations will potentially have to cover gender reassignment benefits when deemed medically necessary. Mental health parity rules could limit design options as it prohibits stricter cost-sharing (e.g., a lifetime or annual limits) for mental health benefits than applies to medical/surgical benefits in the same classification.
Additional issues arise in varied situations, like carved-out behavioral health and autism spectrum disorder coverage. The challenge is that MHPAEA includes financial requirements, quantitative treatment limitations, and non-quantitative treatment limitations.
What should employers do? At least three things come to mind:
- Review current and future medical plan designs with legal counsel to determine if there are any mental health parity “red flags.”
- Address testing concerns with their insurance company or TPA to assess compliance with the recently issued FAQ.
- Work with a trusted advisor to determine if any other mental health parity issues are lurking “under the hood.”