The Affordable Care Act is big … and complicated … but there is another complicated act, the Mental Health Parity and Addiction Equity Act (MHPAEA), that health administrators must act on very soon.
John Barlament, partner at Quarles & Brady LLP in Milwaukee, served up this series of sobering messages to the Milwaukee Chapter of the International Society of Employee Benefit Specialists (ISCEBS) on October 21, 2014 at an event hosted by The Benefit Services Group in Pewaukee, Wisconsin:
- The MHPAEA regulations were finalized in November 2013.
- They are effective for calendar-year plans on January 1, 2015.
- They are more complicated than the Affordable Care Act’s Play or Pay provisions (Yikes!).
- The Internal Revenue Service levies fines of $100 per day per affected individual for plans out of compliance, and it requires plans to self-report violations.
- Even if a plan does not self-report, there are plaintiffs’ attorneys who are very aware of these final regulations and know how difficult it can be for plans to comply.
Not many would argue this law doesn’t have good goals. In the past, individuals were not always able to obtain the coverage they needed to adequately treat mental health and/or substance use disorders because of health plan limits on things like dollar amounts of coverage, number of covered treatments, visits or days of treatment. Limits applied to mental health and substance use disorder treatments were often more restrictive than limits applied to major medical/surgical physical treatments.
To correct this imbalance, MHPAEA requires health plans providing mental health and/or substance use disorder benefits to offer coverage that is not more restrictive or stringent than coverage applying to major medical/surgical treatments. (HIPAA-excepted benefits including dental, vision, health FSAs and EAPs are not subject to MHPAEA.)
Determining whether the limits a plan applies to mental health and substance use disorder benefits are actually more restrictive than the limits applied to major medical/surgical coverage is not easy.
[Related: Certificate in Health and Welfare Plans]
Each plan must predict next year’s claims, analyze both its quantitative treatment limitations and its non-quantitative treatment limitations, and determine the level of coverage needed to make sure its mental health and substance use disorder benefits are in parity with its major medical and surgical benefits.
Each plan needs to do separate analyses on these six types of coverage:
- Inpatient, in-network
- Inpatient, out-of-network
- Outpatient, in-network
- Outpatient, out-of-network
- Emergency care
- Prescription drugs.
The more levels of coinsurance or copayments a plan has, the more complicated it gets. The analyses are based not only on the terms of the plan document, but also on the plan’s claims experience.
Due to the complexity of the calculations, mental health treatment must sometimes be covered more generously than major medical/surgical treatment in order to comply with MHPAEA, which may be surprising.
Between the Affordable Care Act and the Mental Health Parity and Addiction Equity Act, health plan administrators face quite a challenge getting their “acts” together this year.
Final Rules Under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, Federal Register, November 13, 2013
The Department of Labor’s Employee Benefits Security Administration Resources: