Articles | September 22, 2021
Mental health benefits are a key component of group health plan coverage. Mental health and substance use disorder (MH/SUD) benefits are particularly important in light of the COVID-19 pandemic and its impact on workers.
The Mental Health Parity and Addiction Equity Act (MHPAEA) requires similar financial requirements (e.g., copayments and deductibles) and quantitative treatment limitations (e.g., visit limits) for MH/SUD benefits and medical/surgical benefits. In addition, under MHPAEA regulations, any non-quantitative treatment limitations (NQTLs) for MH/SUD benefits must be comparable to limitations that apply to medical/surgical benefits.
The Consolidated Appropriations Act, 2021 amended MHPAEA to require group health plans and insurers offering coverage for both medical/surgical benefits and MH/SUD benefits to document a comparative analysis of the design and application of NQTLs and provide a copy to the Department of Labor (DOL) upon request. The DOL has undertaken a vigorous enforcement campaign to collect comparative analyses from plan sponsors. The size and scope of the enforcement efforts are significant. Resolution of the enforcement initiative is proving to be very time consuming for plan sponsors.
(Our March 30, 2020 insight addresses the federal government’s continued focus on mental health parity. See also our January 14, 2021 insight, which summarizes new compliance requirements related to mental health parity and SUD benefits in the Consolidated Appropriations Act, 2021 and listen to our March 2021 webinar covering what plan sponsors need to know about the new rules for MHPAEA.)
The Public Health Services Act (as amended) permits self-funded non-federal governmental plans to elect an exemption from certain provisions of federal law, including the mental health parity provisions.
Plans that opt out of MHPAEA would not be subject to the specific requirements of that law, including the arguably burdensome enforcement efforts currently in use by the DOL; although, in some cases, state law would govern what mental health benefits must be covered. Plan participants today expect meaningful and comprehensive mental health and substance use disorder coverage. Any decision to opt out needs to be balanced with meeting participants’ needs for comprehensive care, while addressing plan sponsors’ concerns. It should also be noted that non-federal governmental plans are regulated by the Department of Health and Human Services (not the DOL).
An opt-out election by a self-funded non-federal governmental plan requires plan sponsors to take several actions, including filing an annual election electronically and notifying each affected enrollee at time of their enrollment and annually. Plans generally must file an annual election with the Centers for Medicare & Medicaid Services (CMS) before the first day of the plan year. There are special timing rules for collectively bargained plans. CMS has published guidance on exemptions through the Health Insurance Oversight System (HIOS). Registering with the HIOS and submitting the opt-out election can be time consuming. Additionally, the names of plans that have opted out is public information.
Plan sponsors should carefully consider how to best structure their benefits to meet the needs of their participants, in full compliance with the law.
A mentally and physically healthy workforce is important to every organization. From how employers can help deal with employee burnout to how they can combat COVID-19-related alcohol and substance abuse, Segal is committed to providing resources organizations can use to address the behavioral health and wellness of their people.
This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.
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