Updated 10/28/20: On October 23, 2020, the Department of Labor finalized updates to its self-compliance tool. The tool will help plan sponsors determine if their plan complies with mental health and substance abuse disorder benefits under MHPAEA. The tool includes best practices, guidance on establishing an internal compliance plan, and useful tips.
The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) prohibits group health plans from imposing more restrictive treatment limitations or higher financial requirements on mental health or substance use benefits (MH/SUD) as compared to other medical or surgical benefits under the plan. In other words, group health plans must provide MH/SUD “in parity” (i.e. the same) with medical and surgical benefits.
The Department of Labor (DOL) publishes a MHPAEA Self-Compliance Tool to help group health plans determine whether their plan is compliant with MHPAEA. The Self-Compliance Tool was last updated in April 2018 and is updated every two years. The DOL recently issued proposed updates to the Self-Compliance tool for the 2020 update, which includes: (1) additional FAQs; (2) revised examples of non-compliance with MHPAEA and what plans can do to correct these issues; (3) examples of the types of records that a plan should be prepared to provide in a DOL investigation; and (4) examples of treatment limitations encountered in enforcement efforts that may be “warning signs” of a potential MHPEA violation.
The Self-Compliance Tool consists of a series of questions that group health plans can answer to assess their compliance with MHPAEA. It is important to note that many States have enacted their own laws on MH/SUD parity in addition to those under the MHPAEA. Thus, group health plans should be aware that they also may be subject to state laws that require mental health parity in addition to those under the MHPAEA.
Which group health plans are subject to MHPAEA?
MHPAEA applies to group health plans that provide coverage for MH/SUD benefits and medical/surgical benefits. MHPAEA applies to both grandfathered and non-grandfathered group health plans and applies to individual, small group, and large group market plans. MHPAEA does not apply to retiree-only and excepted benefit plans (such as vision and dental only plans).
See Section A in the Self-Compliance Tool for additional information on MHPAEA applicability.
What are mental health/substance use disorder (MH/SUD) benefits?
MH/SUD benefits are items or services for a mental health condition or substance use condition, respectively, as defined under the terms of the plan and in accordance with state and federal law. If a plan defines a condition as a mental health or substance use condition, it must treat benefits for that condition as mental health or substance use benefits. For example, if autism spectrum disorder (ASD) is defined as a mental health condition by a plan, it must consider treatment for ASD as mental health benefits.
What are “financial requirements” that are prohibited under MHPAEA?
Plans cannot impose higher “financial requirements” on MU/SUD benefits than those required for medical/surgical benefits in the same classification (e.g. inpatient, in-network MU/SUD benefits must have the same “financial requirements” as inpatient, in-network medical/surgical benefits). The following are considered “financial requirements”:
- Deductibles;
- Copayments;
- Coinsurance;
- Out-of-pocket maximums.
Example: A plan limits outpatient substance use disorder treatments to a maximum of $1,000,000 per calendar year but does not have a maximum for medical/surgical treatment. This would violate the MHPAEA.
What are “treatment limitations” that are prohibited under MHPAEA?
MHPAEA prohibits plans from imposing “treatment limitations” on MH/SUD benefits that are more restrictive than for medical/surgical benefits in the same classification. The following are examples of treatment limitations:
- Frequency of treatment;
- Number of visits;
- Days of coverage;
- Days in a waiting period;
- Other similar limits on the scope or duration of treatment.
Example: A plan covers room and board for inpatient medical/surgical care (including facilities with “intermediate levels of care”) but imposes a restriction for room and board based on the facility type for MH/SUD residential care. This would violate MHPAEA. The plan could come into compliance by covering room and board for intermediate levels of care for MH/SUD benefits, so they are comparable to those provided for medical/surgical care.
Example: A plan excludes all inpatient, out-of-network treatment outside a hospital setting for eating disorders. Since eating disorders are a mental health condition, this treatment limitation would be impermissible under MHPAEA if the plan did not impose a similar limitation on treatment outside of hospital settings for medical/surgical benefits.
For additional examples, see the DOL Self-Compliance Tool.
Employer Action Items
Fully Insured Employers
Insurers issuing group health plans must comply with MHPAEA and should be offering plans that comply with MHPAEA. Fully insured employers who are concerned about their group health plan’s MHPAEA compliance can look at the benefits under the terms of their plans to determine whether their MU/SUD benefits are in parity to the medical/surgical benefits. Fully insured employers should work with their carriers to ensure their plans are MHPAEA compliant.
Self-Insured Employers
Self-insured employers should be especially vigilant to comply with MHPAEA since they have more discretion to determine the benefits under their group health plans. Employers should work with their third-party administrator (TPA) to ensure that they don’t impose higher financial requirements and/or treatment limitations on MU/SUD benefits when designing their plans. The MHPAEA Self-Compliance Tool can be used by self-insured employers and their TPA to check their MHPAEA compliance and ensure their plans are aligned accordingly.
Additional Resources
Disclaimer: This content is intended for informational purposes only and should not be construed as legal, medical or tax advice. It provides general information and is not intended to encompass all compliance and legal obligations that may be applicable. This information and any questions as to your specific circumstances should be reviewed with your respective legal counsel and/or tax advisor as we do not provide legal or tax advice. Please note that this information may be subject to change based on legislative changes. © 2020 Sequoia Benefits & Insurance Services, LLC. All Rights Reserved
