Under an amendment to the Mental Health Parity and Addiction Equity Act brought on by the Consolidated Appropriations Act of 2021, sponsors of group health plans are required to perform an analysis of the plan’s non-quantitative treatment limitations for mental health and addiction benefits compared to those for medical and surgical benefits. Put simply, the Mental Health Parity and Addictions Equity Act of 2008 aims to end disparities between health plan coverage of mental health and addiction services and coverage of medical and surgical services. Health plan coverage is limited by both quantitative treatment limitations (QTLs) and nonquantitative treatment limitations (NQTLs). Quantitate treatment limitations can be easily counted, such as the number of visits covered and the out-of-pocket cost to patients. Nonquantitative treatment limitations, on the other hand, are based on standards and restrictions that cannot be counted. Examples include the criteria for considering treatment to be of medical necessity, standards for in-network providers, and restrictions in coverage based on geographic location. The American Psychological Association’s article, “What do employers need to know about parity,” explains, “Plans must ensure that these and other nonquantitative treatment limitations imposed on mental health and substance use benefits are comparable and no more stringently applied than the same limitations imposed on physical health benefits in the same kind of care, such as in-network outpatient services.”
Disparity in Mental Health Care Coverage
The Center for Workplace Mental Health breaks down the issues surrounding mental health parity in its article, “Fair Insurance Coverage for Mental Health and Substance Use Disorder Care.” The article lists common barriers to mental health care including difficulty finding in-network providers, lengthy wait times, coverage denials due to “restrictive utilization review and prior authorization criteria,” and high out-of-pocket costs. It explains that federal and state laws on mental health parity were enacted “to protect people who need care for mental health and substance use conditions by ending discriminatory practices in health plan benefit coverage.” Despite the enactment of these laws, disparities between mental health and addiction coverage and physical health coverage still exist. The American Psychological Association’s article, “What do employers need to know about parity,” reports that out-of-network use disparities and reimbursement rate disparities have actually increased in recent years. Clearly, there is still room for improvement when it comes to health plans offering equitable mental health and addiction care benefits.
Why Employers Should Care
Employers have the legal obligation to sponsor a health plan that offers equitable mental health and substance use care benefits. This, however, is not the only reason employers should be concerned about mental health parity. Untreated mental health conditions are extremely costly to businesses in terms of performance, lost productivity, retention, overall healthcare costs, and rising disability rates according to the Center for Workplace Mental Health. Alarmingly, the Center for Disease Control estimates that depression, alone, causes 200 million lost workdays in the United States each year, costing employers between $17 and $44 million!
How Must Employers Ensure Compliance?
As mentioned above, the Consolidated Appropriations Act of 2021 requires sponsors of group health plans (i.e., employers) to perform an analysis of the plan’s non-quantitative treatment limitations for mental health and addiction care benefits compared to those for medical and surgical care benefits. The SHRM article, “DOL, State Regulators Step Up Enforcement Around Mental Health Parity,” provides more details about this requirement. The article states that the analysis must explain, “whether the factors used to justify NQTLs for mental health coverage differ from limits imposed for medical and surgical benefits.” Furthermore, employers are responsible for providing the analysis to the U.S. Department of Labor (DOL) upon request. The article closes by citing advice from former DOL auditor, Rory Kane Akers, who recommends that employers request the mental health parity comparative analysis from their insurance carriers or third-party administrators sooner rather than later. If the insurance carrier or third-party administrator is unwilling to produce or help with the comparative analysis, it is important to document the lack of compliance. Akers explains that while employers are ultimately responsible for ensuring plan compliance, the DOL should take issue with the noncompliant insurance carrier or third-party administrator.
In summary, disparities in mental health and addiction care insurance coverage are an ongoing legal and societal issue despite federal and state legislation promoting equity. In response, the recent amendment to the Mental Health Parity and Addiction Equity Act places increased responsibility on employers for ensuring health plan compliance.
Encourage your employees to speak-up, through your hotline or otherwise, when they see a lack of parity. How do you do that? See our article here.