Increased attention around the country on mental health and substance abuse issues has also increased attention on a lesser-known federal law that affects many group health plans sponsored by employers: The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), which took effect January 1, 2010.
The MHPAEA generally requires a covered group health plan that offers mental health or substance use disorder (MH/SUD) benefits to provide those benefits at a level consistent with other medical and surgical benefits in the same category. The MHPAEA defines six categories of benefits that each requires parity: inpatient in-network, inpatient out-of-network, outpatient in-network, outpatient out-of-network, emergency care and prescription drugs. Within each benefit category, there must be parity between MH/SUD benefits and substantially all of the medical/surgical benefits in the category with respect to:
Financial Requirements:
The cost of treatment, such as copays, coinsurance, deductibles and out-of-pocket maximums.
Quantitative Treatment Limitations:
Numerical limits that affect the scope or duration of benefits for treatment, such as annual visit limits.
Non-Quantitative Treatment Limitations:
Non-numerical limits that affect the scope or duration of benefits for treatment, such as preauthorization requirements.
An important thing to remember about the MHPAEA is that it does not mandate coverage of MH/SUD benefits. Instead, the MHPAEA generally prevents group health plans that do provide MH/SUD benefits from imposing stricter limitations on those benefits than on medical/surgical benefits.
Recently, there have been efforts to help participants better understand the MH/SUD benefits that may be offered under their health plan. The 21st Century Cures Act, signed into law in late 2016, directed the U.S. Departments of Labor, Treasury and Health and Human Services to develop additional guidance on the MHPAEA, including methods that plans may use for disclosing information to individuals to confirm a plan’s compliance with the MHPAEA. For example, the U.S. Department of Labor is currently reviewing comments it received on a draft of a template form that an individual can use to request documentation from his or her plan that non-quantitative treatment limitations comply with the MHPAEA.
We encourage employers to take a closer look at any limitations on MH/SUD benefits provided under their group health plans. Examples of requirements or limitations on MH/SUD benefits that could indicate a MHPAEA compliance issue include:
Failure to comply with the MHPAEA could result in lawsuits for breach of fiduciary duty, claims for payment of MH/SUD benefits alleged to be due under the plan and damages for unpaid benefits, interest and attorney’s fees. Additionally, the IRS may impose excise taxes for a group health plan’s failure to comply with the MHPAEA’s requirements.
The MHPAEA has been around for almost a decade, but attention to this law has ramped up in recent years. The government has increased enforcement efforts to bring group health plans into line with the MHPAEA, litigation under the MHPAEA is abundant and we are seeing increased focus from the government on transparency between plans and participants with respect to MHPAEA compliance. We do not anticipate attention to the MHPAEA slowing down any time soon.
If you need assistance with MHPAEA compliance, please contact Stephanie H. Grant, (sgrant@wnj.com or 248.784.5068), Norbert F. Kugele (nkugele@wnj.com or 616.752.2186) or any other member of Warner’s Employee Benefits and Executive Compensation Practice Group.
