Mental Health Coverage Is a Hot Topic for Employers and Lawmakers

Employers are beefing up mental health coverage. But there are concerns in Washington that organizations are falling short in complying with laws and regulations governing those benefits. In response, legislation has been proposed to tighten up the rules governing "parity" between mental health and medical/surgical health benefits.

Also, the three federal agencies with authority over benefits recently clarified how existing law handles parity requirements based on "nonquantitative" coverage criteria. These agencies — the Department of Health and Human Services, the Department of Labor and the Department of the Treasury — collectively refer to themselves as "the Departments" in the new guidance.

Increasing mental health insurance coverage

"Cannot Be More Restrictive"

Employers other than those using fully insured small group plans subject to the "minimum essential benefits" requirements of the Affordable Care Act (ACA) aren't required to provide mental health benefits.

There is a landmark pre-ACA law that promotes mental health coverage. The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) only requires that, if employers do provide such coverage, those benefits "cannot be more restrictive than the predominant financial requirements and treatment limitations that apply substantially to all medical/surgical benefits in a classification," according to the federal departments.

Six care classifications are listed in that law: 1) inpatient in-network, 2) inpatient out-of-network, 3) outpatient in-network, 4) outpatient out-of-network, 5) emergency care, and 6) prescription drugs.

Benefit Prevalence

The MHPAEA's enactment doesn't seem to be slowing down adoption of mental health benefits. The prevalence of mental health benefits coverage of employers surveyed by the International Foundation of Employee Benefit Plans (IFEBP) earlier this year found that 87% provide mental health coverage, up from 71% five years ago. Also, 68% plan to increase their focus on mental health offerings.

Under the broad umbrella of "mental health initiatives," the IFEBP survey found varying rates of adoption of the following employer-sponsored services:

  • Employee assistance programs: 90%,
  • Substance abuse treatment coverage: 73%,
  • Mental health assessment included in health risk assessments: 35%,
  • Mental health educational/informational sessions at the workplace: 34%,
  • Stress management programs: 23%, and
  • On-site mindfulness/meditation classes: 23%.

What's behind the growth in mental health benefits? It "could be attributed to heightened levels of worker stress," according to the IFEBP. That conclusion was drawn from the fact that nearly three-fourths (72%) of survey respondents identified stress as "the top issue negatively impacting workplace productivity."

New Guidance

Whatever employers' motivations, they need to make sure their mental health benefits meet the parity test. The latest effort by the federal agencies to help employers do so came in the form of a set of Q&As focusing on "nonquantitative treatment limitations" (NQTLs), a trickier standard than numerically based limits (such as dollars).

NQTLs consist of "any processes, strategies, evidentiary standards or other factors used in applying [the limits] to the scope and duration of benefits," according to the Q&A. "Compliance depends on parity in development and application of the underlying processes and strategies." For example, a health plan couldn't require an employee to supply more provider opinions substantiating the need for a mental health treatment than for a medical/surgical one.

The Q&As deal with parity issues pertaining to the use of experimental treatments, prescription drug coverage, eating disorder treatments and "step therapy protocols." (Step therapy, also known as "fail first," requires patients to try the least costly drug or treatment first and move on to more costly ones only if the initial therapy failed.)

Also covered: requirements concerning plan details that must be described and how that information is disseminated to employees. The Q&As make clear, for example, that it's impermissible for a mental health / substance use disorder summary plan description to contain an out-of-date and inaccurate network provider listing. An approved way to deal with the challenge of keeping network provider listings current is providing a website page that contains current listings.

Another way the government is trying to keep employers in compliance with mental health benefit parity requirements is to publicize actions it has taken against noncompliant employers. For instance, the U.S. Department of Labor's Employee Benefits Security Administration (EBSA) recently reported that, in its most recent fiscal year, 21 employers out of 115 examined for MHPAEA compliance were cited for violations.

Enforcement Actions

Most violations (55%) were of the nonquantitative variety. The second most common category, representing 35% of the total, pertained to illegal financial requirements and quantitative treatment limitations. Less common were more blatant benefit parity violation categories such as inconsistent annual and lifetime dollar limits. Specific cases noted in the fact sheet included employers that:

  • Required preauthorization requirements for outpatient mental health and substance abuse treatment after a certain number of treatments had been administered, but didn't maintain that requirement for medical/surgical care,
  • Charged a higher co-pay for mental health–related office visits than for other categories of office visits, and
  • Required the achievement of specific goals for continued coverage of substance abuse disorder treatment, but not for medical/surgical treatment.

Meanwhile, though EBSA appears to be satisfied with its authority to enforce mental health parity laws, two U.S. Senators active in this arena — Bill Cassidy (a Republican) and Chris Murphy (a Democrat) — are pushing to do more. Specifically, their proposed Mental Health Parity Compliance Act would require, among other things, health plans to provide comparative analyses of the design and application of NQTLs to medical/surgical benefits and mental health / substance abuse benefits.

Despite previous legislation, "we've seen insurers put up all sorts of bureaucratic hurdles for people to access mental health care or [battle] addiction," Sen. Murphy stated when the legislation was introduced. Whether or not the proposal is ultimately adopted, pressure on employers and health plans to cover mental health and basic medical/surgical benefits on the same basis is unlikely to dissipate.

Soon To Be an Expectation

As mental health benefits become more widely offered, job candidates and employees will expect to see them listed among every employer's benefits. If your organization already offers them, keep an eye on legislative developments that may affect the size and shape of your coverage.

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