News Flash:  There’s no actual statutory mandate that employers offer group health coverage at all, much less coverage for specific conditions.  However, federal law requires health plans that provide mental health and substance use disorder coverage to ensure that the financial requirements (like coinsurance) and treatment limitations (like visit limits and provider access) applicable to those benefits are no more restrictive than the predominant requirements applicable to medical and surgical benefits.  By default, employers that sponsor group health plans generally are responsible for compliance with these and other federal requirements.

It’s been easy enough for employers to assess whether financial requirements are in parity or to obtain an insurer’s, third-party administrator’s or actuary’s assurance that financial requirements are in parity.  But treatment limitations are another matter because, along with visit limits (which must be disclosed in certificates of coverage and summary plan descriptions provided by insurers and plan service providers), treatment limitations include certain nonquantitative ones which ordinarily are not disclosed to employers or plan participants.  Instead, these are limits or restrictions that cannot be expressed numerically and result from plan design characteristics and network development procedures that, historically, have been the exclusive purview of insurers and third-party administrators.  Most employers don’t have the resources to design a group health plan and build a provider network themselves, so they simply purchase a pre-packaged plan design and access to a provider network “off-the-shelf”.  Nevertheless, employers remain responsible for compliance, particularly employers with self-insured group health plans.

As the demand for mental health and substance use disorder benefits has increased, many employers and plan participants are discovering that their group health plan coverage for those benefits is sorely lacking … and confusing.  Problems stem from the fact that mental health and substance use disorder services are more likely to be provided out-of-network, as has been reported by Milliman and others.  There are a variety of reasons for this, but the United States Department of Labor’s Employee Benefit Security Administration (the agency enforcing the Mental Health Parity and Addiction Equity Act) seems especially interested in identifying claim-handling procedures, provider credentialing, and reimbursement rates that tend to limit mental health and substance use disorder benefits more than medical and surgical benefits.

In the past couple of years, the DOL has obtained multi-million dollar settlements from insurers alleged to have imposed greater restrictions on mental health and substance use disorder claims, based on the DOL’s analysis of claims data.  Increasingly, though, the DOL is probing more deeply, beyond claims data and more into how plan networks are developed – provider admission procedures and reimbursement rates that aren’t transparent to employers or plan participants.  We’ve seen the DOL focus its group health plan investigations around these nonquantitative treatment limitations.

The Consolidated Appropriations Act enacted in December 2020 amended the federal mental health parity law to require plans to perform and document comparative analyses of nonquantitative treatment limitations by February 10, 2021. The DOL wasted no time launching investigations after that to see whether plans are complying.  The new law requires the DOL to do so in time to report back to Congress at the end of 2021 and publish a list of non-compliant plans.  Besides providing the comparative analysis documentation to the DOL upon request, plan sponsors also must provide comparative analysis documentation to plan participants. Again, all group health plan sponsors – regardless of whether the plan is fully-insured or self-insured – are responsible for ensuring that the comparative analysis is completed and provided upon request.  However, in the case of the fully-insured plan, the insurer also is responsible by law.  Therefore, plan sponsors of fully-insured plans at least can expect the comparative analysis to already have been done by the insurer.

The comparative analysis documentation must identify the nonquantitative treatment limitations and the benefits to which they apply and the factors and evidentiary standards or strategies considered in the design or application of the limitations.  It must also explain whether there is any variation in applying a guideline or standard between mental health/substance use disorder benefits and medical/surgical benefits and, if so, why.  In its investigations, the DOL asks for and analyzes provider network admission applications and reasons for admission denials, credentialing requirements and reasons for those requirements, provider contracts, provider fee schedules and the methodology for their development, and geographic and other standards considered to establish provider networks.  This is not information to which employers have historically had access, but it’s now information that employers must obtain.

The time for an employer to bundle up against enforcement action is now, before the plan and its sponsor are exposed.  For a self-insured group health plan sponsor, this means obtaining assurance from plan service providers that the plan complies with the federal mental health parity law and documentation of the nonquantitative treatment limitations comparative analyses is readily available.  Unfortunately, some plan sponsors are finding out – too late – that their plan service providers have not performed or documented the comparative analysis and don’t accept responsibility for doing so either.