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Health Care Reform: Mental Health, Short-Term Policies and Section 1557
Answering the Call for Better Mental Health Benefits Coverage
We live in a time of alarming stories about the mushrooming opioid epidemic. Meanwhile, random acts of horrific violence make headlines and dominate the news cycle. Mental health plays a central role in these issues and — of importance to employers — a recent study raises serious concerns about the adequacy of mental health services offered through employee benefit plans.
Prevalence of the Problem
Anxiety and clinical depression are the most common mental health problems, and their prevalence is high and likely growing. According to the National Institute of Mental Health, over the course of a year about 19.1% of U.S. adults suffer some form of clinical anxiety disorder. Most cases are serious or moderate, not mild. Per the same source, 6.7% of Americans suffer a major depressive episode annually. For women, the rate is 8.5%; for men, 4.7%.
Looking ahead, a recent pharmaceutical industry research report predicted a 6% annual growth rate of sales of antidepressants through 2025. This is attributable, in part, to "the rise in economic stress factors" in countries such as the United States.
The ACA and MHPAEA
Many employers have invested heavily in their health care plans to keep their workforce healthy, engaged and productive. One might assume, or at least hope, that the Affordable Care Act's (ACA's) fortification of the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) would have improved the quality of mental health services available to employees through their benefit plans. As noted, however, those laws seem to have fallen short of their goals so far.
As a general reminder, the MHPAEA declared that health care plans covering mental health benefits should be as generous with coverage of this broad category as they are with medical and surgical services. The law's specific standards set a floor for states; state laws can be more stringent, but not less.
The ACA built on the MHPAEA by including mental health and substance abuse treatment services in the new list of ten "essential health benefits" required of small group plans. Specifically, such plans must cover behavioral health treatment (such as psychotherapy and counseling), mental and behavioral health inpatient services, and substance use disorder (commonly known as substance abuse) treatment.
Just how much the MHPAEA and ACA have fallen short of ensuring equal coverage of mental and physical ailments is suggested by a pair of observations made in a study by consultancy Milliman, commissioned by the Mental Health Treatment and Research Institute. First, "medical/surgical providers are paid at higher rates than behavioral providers, often for providing the same services." And, second, there are "significantly higher rates of out-of-network use for behavioral health compared to medical/surgical care."
These cost components are likely and largely attributable to the fact that many mental health care providers opt not to participate in managed care networks. Why? Money plays a role.
There was an average pay differential between primary care and "behavioral provider" office visits during the two years covered by the study. Primary care providers were paid around 21% higher rates than behavioral providers. And the proportion of out-of-network behavioral health office visits compared to medical/surgical visits was five times higher, the study found. In short, out-of-network care is generally more expensive, which may mean people postpone or avoid treatment.
Those disparities, however, vary by region. For example, in Connecticut, the out-of-network office visit utilization rate differential was a multiple of 10.5, vs. only 1.4 for North Dakota. And in one state, Nebraska, out-of-network utilization of medical/surgical providers was slightly lower than that for behavioral health providers.
The study didn't conclude that the only possible factor explaining the overall out-of-network utilization rates is provider pay disparities. "Other explanations … are certainly possible and likely to contribute as well," the authors wrote. Those include "supply side issues," such as a relative scarcity of mental health professionals in many areas, as well as "patient reluctance to switch providers to stay in-network."
Mental health advocacy groups believe the pay issue is key. The Milliman study shows that "insurers aren't living up to the letter or the spirit of the [MHPAEA]," according to the National Association of Addiction Treatment Providers. And the former CEO of Magellan Health, a large behavioral health provider, called the Milliman study "a wake-up call for employers, regulators and health plans that whatever they're doing, they're making it difficult for consumers to get treatment."
In addition, the Milliman study came on the heels of a similar one by Tami Mark, a health economist with RTI International (a nonprofit research organization). As did the Milliman study, the RTI survey identified significant regional variations, but it came to similar conclusions.
Ultimately, the Milliman study suggests that employees are faced with the following set of unappealing choices:
Struggle to find appointment times with scarce mental health professionals participating in health plan networks.
Pay a premium for using out-of-network providers.
Pay out of pocket for mental health services from providers who opt not to have any relationships with managed care companies.
Forgo or delay receiving treatment altogether.
"Some patients may want to avoid the higher costs and delay seeking needed services from behavioral health care providers, which can lead to less effective care," the study suggests.
If this is indeed a wake-up call for your organization, you might best address it by determining whether your own employees are disproportionately using out-of-network behavioral health providers and, if so, why. Then consult with your benefits advisors on how you might tweak your coverage to improve the situation.
Proposed Regulations Would Expand Availability of Short-Term, Limited-Duration InsuranceIRS Updates Guidance on Employer Mandate PenaltiesIn February, the IRS updated guidance on its webpage relating to potential penalties and other important information pertaining to applicable large employers (ALEs) subject to the employer mandate. Here are some highlights:2018 adjusted penalty amounts. The adjusted penalty amounts per full-time employee for failures occurring in the 2018 calendar year will be $2,320 under Internal Revenue Code Section 4980H(a) and $3,480 under Code Sec. 4980H(b).Adjustment to affordability standard. The guidance reflects the indexing adjustment for the required contribution percentage used to determine whether employer-sponsored health coverage is "affordable" for purposes of the employer mandate. The affordability threshold for 2018 is 9.56%.Expired transitional relief. The guidance notes that no transitional relief is available for 2017 and future years. Relief that was available for the 2015 plan year (including months falling in 2016 for non-calendar-year plans) has now expired.As a reminder, the IRS has begun sending Letter 226J to inform ALEs of their potential liability under the employer mandate for the 2015 calendar year — the first-ever assessment of these penalties. If your organization falls under the definition of an ALE, be on the lookout for this letter so you can promptly review and respond to the correspondence.Earlier this year, the Department of Labor, Department of Health and Human Services and IRS jointly issued proposed regulations that would expand the availability of short-term, limited-duration health insurance. The proposal followed President Trump's executive order directing the agencies to consider regulations or guidance that would allow such insurance to cover longer periods and to be renewed by the consumer.Longer Coverage PeriodsIndeed, the proposed regulations lengthen the maximum permissible coverage period. The agencies are proposing to amend the definition of short-term, limited-duration insurance so that an insurer may offer coverage periods of less than 12 months, including any extensions that may be elected by policyholders.This amendment would restore the previously applicable maximum coverage period, thereby reversing the October 2016 final regulations that reduced the maximum coverage duration to any period of less than three months, including extensions.Notice ChangesThe proposed regulations would also revise the required notice that must appear in enrollment materials for short-term, limited-duration insurance. Specifically, the regs would require the use of one of two versions of the notice, depending on whether the coverage start date is before January 1, 2019.Two different forms of notice are needed because certain language relating to maintaining minimum essential coverage to avoid the individual mandate penalty under the Affordable Care Act (ACA) will no longer apply starting in 2019, when the individual mandate penalty is reduced to zero. Both versions of the notice are intended to warn consumers that short-term, limited-duration policies aren't required to comply with certain federal health insurance mandates, principally those contained in the ACA.Marketplace AnalysisShort-term, limited-duration insurance is intended to fill temporary gaps in coverage that may occur when an individual is transitioning between coverages — for example, when an employee changes jobs and is in a waiting period under the new employer's health plan. Although short-term, limited-duration coverage isn't an excepted benefit as defined under the Health Insurance Portability and Accountability Act, it's still exempt from the ACA's individual-market requirements because it's excluded from the definition of individual health insurance coverage. The exemption means the coverage need not offer all the elements that the ACA requires, such as the pre-existing condition exclusion prohibition and coverage of essential health benefits without annual or lifetime dollar limits. In turn, this allows insurers to offer the coverage at a lower cost than ACA-compliant plans.The distinction also has some limited relevance for group health plans and group health insurance. For instance, limited wraparound coverage can wrap around most types of individual health insurance coverage but cannot wrap around short-term, limited-duration coverage. According to the preamble and a fact sheet issued by the Centers for Medicare and Medicaid Services, the agencies project that, after the elimination of the individual mandate penalty, approximately 100,000 to 200,000 additional individuals would shift from the individual market to short-term, limited-duration insurance in 2019. The longer duration may lead to individuals buying this type of coverage as their primary form of health insurance — a result that the October 2016 regulations intended to avoid by shortening the duration to less than three months.Latest DevelopmentsThe agencies are seeking comments on the proposed regulations by April 23, 2018, including conditions under which insurers should be able to allow short-term, limited-duration insurance to continue for 12 months or longer. Touch base with your benefits advisor for the latest developments.
Do Section 1557 Language-Assistance Requirements Differ From SBC and Claims Requirements?
Question: We're an employer sponsor of an insured major medical plan, and we've heard that Section 1557 of the Affordable Care Act (ACA) imposes language-assistance requirements on our plan. Are the language-assistance requirements under the Sec. 1557 nondiscrimination rule different from the "culturally and linguistically appropriate manner" standard that applies to the summary of benefits and coverage (SBC) and claims and appeals notices?
Answer: Each of these rules (Sec. 1557, SBC, and claims and appeals) requires language assistance to be made available for those with limited English proficiency. But the requirements vary in applicability and scope.
Under the ACA, Sec. 1557 prohibits discrimination in certain "health programs and activities" on the basis of race, color, national origin, sex, age or disability. Among its other requirements, the provision stipulates that covered entities must add taglines (in specified languages depending on location) that alert individuals with limited English proficiency of the availability of language-assistance services. Employers must add the taglines to "significant publications" and "significant communications."
You also must take reasonable steps to provide meaningful access to everyone with limited English proficiency. Doing so may include providing language-assistance services, such as oral language assistance or written translation. The Department of Health and Human Services (HHS) provides translated resources in more than 60 languages — including a sample notice of nondiscrimination, a sample statement of nondiscrimination and taglines.
Sec. 1557 applies broadly to a wide variety of federally assisted entities, including employee health benefits of certain employers that receive federal financial assistance and are principally engaged in health care (for example, hospitals and nursing homes). It also applies to Health Insurance Marketplaces (commonly called "exchanges"). This includes Small Business Health Options Programs and the insurers that participate in them — even with respect to the plans and services they offer outside of Health Insurance Marketplaces or, in some instances, as third-party administrators for employer group health plans. Unless you're a health care entity that must directly comply, any compliance obligation would fall on your insurer.
The 10% Threshold
On the other hand, the ACA's "culturally and linguistically appropriate manner" (CLA) requirement applies to the SBC and claims and appeals notices. It's triggered if at least 10% of the population residing in a county is literate only in the same non-English language (as determined based on U.S. Census data). There are four designated languages for this purpose: Spanish, Chinese, Tagalog and Navajo. The HHS provides a list of all U.S. counties that meet or exceed the 10% threshold, and the applicable language(s) for each county. (The list is occasionally updated.)
In short, the CLA requirement requires both group health plans and insurers in those specified counties to provide certain language-assistance services (such as answering questions in the applicable non-English language) and provide written document translations upon request. In addition, claims and appeals notices and SBCs provided in these counties must include a one-sentence statement in the applicable language regarding the availability of language assistance. The statement, in each of the four languages, is included in model notices and in the sample SBC.
Not the Same
So, as you can see, the requirements for each are similar but not identical. Work with your benefits advisor to ensure you're in compliance with both.
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