Mental health and substance use disorders continue to be a concern for employers. As the pandemic is about to enter its third year, many express a heightened need for mental health care. Additionally, insurers report increased claims and demand for mental health services as well as longer wait times for mental health provider requests.
A 2021 International Foundation survey found that the prevalence of mental health and substance use disorder conditions has increased since 2016. More details on the survey can be found in our blog: Uncertainty of Workplace Mental Health Issues on the Rise. As mental health benefits continue to grow in importance, we wanted to provide information on recent regulations regarding mental health parity compliance.
In November, our Talking Benefits podcast welcomed special guest Stephanie Patrick, senior consulting actuary for Horizon Actuarial Services, LLC, to share her expertise in mental health and substance use disorder parity in benefits as well as Department of Labor (DOL) enforcement of the Consolidated Appropriations Act, 2021 (CAA). Below are some helpful insights that Patrick shared.
The CAA, enacted in late December of 2020, amended the Mental Health Parity and Addiction Equity Act of 2008 by adding documentation requirements. The CAA requires group health plans and health insurance issuers that offer both medical benefits and mental health/substance use disorder (MH/SUD) benefits to provide a comparative analysis document that explains how nonquantitative treatment limitations (NQTLs) compare between medical and MH/SUD benefits in their plan. More information on the CAA can be found here.
Some of the regulations on NQTLs include:
- The process for establishing mental health NQTLs needs to be applied the same way as for medical limits.
- Plans can’t have NQTLs that are only for mental health.
- The NQTL comparative analysis must be assessed both as written and in process. If a plan’s actual practice isn’t included in the summary plan description (SPD), then an analysis of the current practice must be included in NQTL documentation.
Patrick also encourages plans to use mental health claims data to evaluate parity and compliance.
In 2021, DOL mental health parity audits cited coverage items that are more nuanced and less numbers-based. Issues found include differences in NQTL between medical and MH/SUD benefits for medical necessity review, prior authorization and clinical review, and treatment for autism spectrum disorder.
The passing of the CAA didn’t involve a change in what insurance plans have to cover, but it did add documentation requirements. As of February 2021, plans should be able to provide a comparative analysis of NQTLs document to DOL upon request. DOL is taking the new rules seriously, and plans that can’t provide full documentation need to take corrective action quickly.
How is the CAA enforced?
- DOL has to request at least 20 NQTL comparative analysis documents to review each year.
- If DOL learns of a possible violation or a complaint is filed for a plan, they must review the comparative analysis documentation.
- Centers for Medicare & Medicaid Services (CMS) also must review 20 different NTQL analysis documents from government and state insurance plans.
If DOL finds a parity violation when auditing a plan:
- The plan has 45 days to take corrective action.
- If the plan isn’t fixed in 45 days, the plan must notify all enrolled members within seven days about noncompliance.
- DOL names violators in a published annual report.
- DOL can work with IRS to assess monetary penalties.
In addition to making sure their plans are in compliance, Patrick suggested that employers provide mental health assistance by:
- Providing an employee assistance program or EAP
- Offering virtual or telehealth mental health services in their plan
- Allowing a flexible work schedule to make it easier for employees to schedule appointments during the workday if needed (especially if appointments are difficult to get).
As you can see, mental health parity is complex and can be difficult to understand, much less implement in your plan. With the current DOL parity enforcement practices, employers and plan administrators are encouraged to review their NQTL practices and documentation and be prepared to take action.
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