Here Comes the Rain: Employers Offering Mental Health Benefits Should Prepare for More Scrutiny
Authors: Timothy J. Stanton (Chicago), Richard C. Libert (Indianapolis)
Published Date: June 27, 2017
Employers can expect some challenging information requests about the mental health and substance abuse benefits offered to employees and their dependents through group health plans, if a draft form released by federal regulators is any indication.
Employers could receive these information requests directly, though they would likely be routed to third-party administrators or insurers in most cases. The federal agencies are accepting comments from employers and others on the model form until September 13, 2017.
Only three pages long, the model form focuses on one of the more complicated aspects of the MHPAEA: its rule against applying nonquantitative treatment limitations (NQTLs), such as process or evidentiary standards, more stringently to mental health and substance use disorder benefits than they are applied to medical or surgical benefits. (The form does not cover quantitative limits such as caps on office visits or counseling sessions.) Participants could use the form before receiving treatment or as part of an effort to challenge a claim denial related to those limits.
By filling out the simple form, participants would be requesting that a plan:
provide the specific plan language regarding the limitation and identify all of the medical/surgical and mental health and substance use disorder 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 mental health and substance use disorder benefits than to medical and surgical benefits.
This is certainly more information than has typically been sought about mental health and substance use disorder benefits and may be more information than plans or third-party administrators would typically provide even in response to specific requests.
Additionally, federal regulators are seeking public comments on the following issues that were raised in an earlier FAQ:
Whether issuance of model forms regarding NQTLs may be useful to providers and participants, and what information should be solicited on such forms
Whether different types of NQTLs require different model forms
Whether issuance of model forms could also be used in conjunction with individual state NQTL requirements
What other steps the DOL might take to improve the scope and quality of disclosures
What other steps might help improve state insurance regulation in this area and/or federal oversight of plan and/or insurer compliance
The draft form and related guidance is only the latest indication of renewed federal interest in mental health and substance use disorder benefits. Under the 21st Century Cures Act, which was signed into law with bipartisan support in late 2016, employers could expect increased enforcement, along with stricter interpretations, of existing federal parity requirements. Though it did not expand the federal mental health parity rules, the 21st Century Cures Act directed the DOL, HHS, and Treasury Department to issue detailed mental parity compliance guidance in 2017.
Federal and state authorities are also to cooperate more closely in enforcing the parity rules under the 21st Century Cures Act. In addition, when a group health plan or insurer is found to have violated the rules five times, the department secretaries are directed to audit the plan or insurer’s documents the following year to “help improve compliance.”
The 21st Century Cures Act also “clarified” that, under the current mental health parity standards, if coverage is offered for eating disorder treatment, then treatment (including residential treatment) must be provided consistent with the mental health parity rules. The new FAQ also requests comments on the application of the mental health parity rules to benefits for eating disorders.
Inside counsel and HR and benefits leaders alike turn to Tim Stanton for advice and representation on their health and welfare and other employee benefit challenges. He counsels insurers, banks and other financial services companies, wholesalers and retailers, utilities, food companies and manufacturers, and other clients. Tim helps steer clients through the shoals of Affordable Care Act compliance and HIPAA privacy and security (including data breaches), and helps them establish and maintain...
Richard (Rick) Libert began his professional career as an employee benefits paralegal in Hartford, Connecticut, quickly determining to attend law school to become an attorney in this growing and dynamic practice area. Rick practiced in the ERISA/employee benefits field for over fourteen years at White & Case LLP in New York, where he specialized in qualified retirement plans, health and welfare plans, and executive compensation. He then returned to his native Midwest, joining Ice Miller LLP...