DOL Issues Mental Health Parity Act Alert
In 2021, Congress passed the Consolidated Appropriations Act to replace the Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008.
As a result, employers who support physical and mental health services must ensure that their limits are the same for medical/surgical benefits and psychiatric/drug use benefits.
The Department of Labor has warned that employers who do not comply with the law will be subject to prosecution and may face legal action from workers. Jay Kirschbaum, World Insurance Associates’ Benefits Compliance Director and Vice President, explains that providing equal coverage is a challenge for insurers because mental health issues, such as ADHD, are more difficult to diagnose than physical illnesses. For physical illnesses, telephone providers allow about 30 minutes for diagnosis and prescription, which is insufficient for mental disorders.
Who Is Responsible for Ensuring Compliance?
Although mental health laws target insurance and employer-sponsored health plans, the latter often rely on insurance companies to enforce the laws. According to the Employee Retirement Income Security Act (ERISA), employers are responsible for health and wellness and retirement plans.
Employers are responsible for ensuring that service providers comply with the law. The MHPAEA does not compel employers to provide medical care, but if they do, the care must be consistent with medical and surgical care.
Psychiatric treatment may not have a different or greater discount on co-pays and out-of-pocket costs if the same does not apply to medical care.
Nonquantitative treatment limitations (NQTL) make achieving equality more difficult. NQTLs refer to any factors that limit the scope or length of benefits or services provided and may include, but are not limited to, prescription drug formulations, treatment plans, and geographic restrictions.
According to Kirschbaum, even though coverage may vary, plans should provide a reasonable explanation for the difference. For example, treatment for substance abuse requires a longer stay in a rehabilitation center than post-surgery recovery.
Comparable Estimate Reports Required
Group health plans that offer medical/surgical benefits and mental health/substance use benefits are responsible for reviewing NQTLs to ensure equivalence. The audit must be made available to anyone who is enrolled in the plan, the DOL, the Department of Health and Human Services (HHS), or any other employee upon request. Employers have 45 days to provide a copy of the analysis.
According to the DOL, insurance plans and companies are not complying as they should be. When the requests were sent to the data, there is no system in use and the providers sent enough information, while a third of them were immediately identified for non-compliance. As a result, the DOL has implemented a variety of changes to assist in enforcement, including assembling a dedicated team.
Increased enforcement means that employers are keeping their eye on the ball and making sure reporting estimates are being made. It is also necessary to record all events related to this because employers are responsible for compliance and placing the blame on the insurance company will not work.
Some experts believe that it would be better for employers to set up health committees to ensure that they are doing the job safely. Although it is not mandatory, it shows the seriousness with which the employer takes its fair share.
To learn more about Employee Benefits, contact INSURICA today.
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