The Mental Health Parity and Addiction Equity Act (MHPAEA) prohibits health insurance policies and group health plans that cover mental health and substance use disorder (MH/SUD) benefits from imposing limitations on MH/SUD benefits that are less favorable than the limitations imposed on medical/surgical benefits.
The Department of Labor’s Employee Benefits Security Administration (EBSA) is actively enforcing MHPAEA, and violations of MHPAEA are a frequent subject of lawsuits. The purpose of this article is to provide a high-level MHPAEA compliance guide for employers who sponsor self-funded health plans.
Overview of Requirements
Classifications. When evaluating parity between MH/SUD and medical/surgical benefits, there are six main classifications of benefits:
(i) inpatient, in-network;
(ii) inpatient, out-of-network;
(iii) outpatient, in-network;
(iv) outpatient, out-of-network;
(v) emergency care; and
(vi) prescription drugs
If a plan provides MH/SUD benefits in any classification, MH/SUD benefits must also be provided in every classification in which medical/surgical benefits are provided. The below parity requirements are applied on a classification-by-classification basis (with limited permissible subclassifications).
Financial Requirements and Quantitative Treatment Limitations. The financial requirements (e.g., deductibles, copayments, coinsurance, and out-of-pocket limits) and the quantitative treatment limitations (e.g., day and visit limitations) that apply to MH/SUD benefits in any classification must not be more restrictive than those applied to medical/surgical benefits in the same classification. In addition, requirements/limitations for MH/SUD benefits may not accumulate separately from the requirements/limitations for medical/surgical benefits (e.g., a plan may not impose separate deductibles for MH/SUD and medical/surgical benefits).
Nonquantitative Treatment Limitations. Examples of nonquantitative treatment limitations (NQTLs) are preauthorization requirements, step therapy requirements, and exclusions for failure to complete a course of treatment. Plans are prohibited from imposing NQTLs on MH/SUD benefits unless the NQTLs are comparable to, and are applied no more stringently than, the NQTLs applied to medical/surgical benefits in the same classification.
Happily, the EBSA offers a self-compliance tool (summarized below) to assist plans in determining whether they comply with MHPAEA.
Two-Step Test for Financial Requirements and Quantitative Treatment Limitations.
First, confirm that the requirement or type of limit at issue applies to “substantially all” (at least two-thirds of) medical/surgical benefits in the classification. If the first test is satisfied, then determine the predominant level of the requirement/limitation (generally, the level that applies to more than half of medical/surgical benefits subject to the requirement/limitation in the classification), and then do not impose a requirement/limitation of that type that exceeds the predominant level.
For example, if 75% of outpatient, in-network visits involving medical/surgical services are subject to a $30 copayment, then the plan cannot impose a copayment higher than $30 for outpatient, in-network MH/SUD visits.
Four-Step Test for Nonquantitative Treatment Limitations.
First, identify the NQTL and which classifications it applies to for both MH/SUD benefits and medical/surgical benefits.
Second, identify the factors (e.g., excessive utilization or lack of clinical efficiency) that are considered in designing the NQTL and, if only certain benefits are subject to an NQTL, substantiate how the applicable factors were used to apply the NQTL and determine the reason(s) why certain factors were given more weight than others, if applicable.
Third, identify the sources (e.g., internal claims analysis or medical expert reviews) used in defining the factors, and confirm they were applied comparably to MH/SUD and medical/surgical benefits.
Fourth, evaluate whether the processes, strategies, and evidentiary standards used in applying the NQTL to MH/SUD are comparable to, and applied no more stringently than, they are applied to medical/surgical benefits, both in writing and in operation.
Specific Benefits. The tool clarifies that medication-assisted treatment for opioid use disorder and treatment for eating disorders are both subject to MHPAEA requirements.
Disclosure Requirements. The tool also details MHPAEA disclosure requirements. Specifically, upon request, the plan administrator (or health insurance issuer) must make available the criteria for medical necessity determinations with respect to MH/SUD benefits to current and potential participants, beneficiaries, and contracting providers. The plan administrator must also provide the reasons for any denials of MH/SUD benefits, and the tool highlights that the Affordable Care Act’s claims procedures include a right of claimants to access the documents detailing the processes, strategies, evidentiary standards and other factors used to apply an NQTL.
Although third-party administrators and pharmacy benefit managers will do most of the heavy lifting when it comes to plan design, employers who sponsor self-funded health plans that cover MH/SUD should know that any difference between the handling of a MH/SUD benefit and a comparable medical/surgical benefit is a red flag warranting special attention. For further details, see the final rules, at this link.
We would like to give a special thanks to Foley Summer Associate Sarah Waste for her contribution to this post.