This alert is the latest in a series from our Employee Benefits and Executive Compensation and Health Care Practice Groups about the most recent federal stimulus bill. We provided an overview of how the law addresses new substantive requirements for health plans and health care providers, see the Health Insurance/Provider Provisions section here. We addressed what the law means for flexible spending arrangements (FSAs) here and went in-depth on the health care price and quality transparency provisions here.
The new COVID-19 relief stimulus law includes a section titled “Strengthening Parity in Mental Health and Substance Use Disorder Benefits” that introduces additional compliance requirements under the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA).
The MHPAEA requires health plans and insurance policies to provide mental health benefits that are on par with the medical and surgical benefits that they provide. It achieves this parity through a set of numerical tests on the costs that participants pay (quantitative treatment limitations or QTLs) and a range of other requirements relating to matters such as the scope, duration, and availability of benefits (nonquantitative treatment limitations or NQTLs) for mental health and substance use disorder (MHSUD) benefits in comparison to medical and surgical benefits. The requirements apply to both the design and operation of the plan or policy. The MHPAEA does not require a plan or policy to cover MHSUD benefits, but the Affordable Care Act (ACA) designated MHSUD benefits as essential benefits to be covered in the individual and small health plan insurance markets, including coverage offered on the ACA Marketplace exchange.
The new provisions apply to group health plans and health insurance issuers that offer medical and surgical benefits and MHSUD benefits and impose specific analytical requirements on the NQTLs on those benefits. Under the new law:
- Covered plans and issuers must perform and document comparative analyses of the design and application of the NQTLs that apply to MHSUD and medical/surgical benefits.
- Upon request, beginning 45 days after the enactment of the law, make the analyses and other information available to the applicable federal and state authority. The analyses must:
- Describe the terms of each NQTL and the benefits to which they apply for each classification (in-patient, in-network) under the MHPAEA.
- Include the factors used to determine the NQTLs that will apply to the MHSUD benefits and the evidentiary standards used to design and apply the NQTLs to the benefits.
- The comparative analyses must demonstrate that the processes, strategies, evidentiary standards, and other factors used to apply the MHSUD benefits are not, in design or in operation, more stringent than the limitations on medical or surgical benefits and disclose the findings of the analyses.
- Plan sponsors and insurers must be prepared to provide the comparative analyses to an enforcing federal agency (the Department of Labor, Health and Human Services, or the Treasury) and to provide them with further information on request. If the analyses and information do not comply with these requirements, plan sponsors and insurers may be required to submit a corrective plan and, if compliance is still not achieved, notify enrollees of the failure to comply.
- To improve and advance compliance with the MHPEA, not later than July, 2022, the Departments of Labor, Health and Human Services, and Treasury are required to finalize compliance guidance and regulations, including the processes and timelines for current and potential plan participants to file complaints reporting violations of the parity provisions. The compliance guidance shall include de-identified examples of previous findings of compliance and non-compliance.
- The Departments will also submit an annual report to Congress summarizing the comparative analyses requested and identifying any noncompliant plans or issuers. Information will also be shared with state regulators.
With the change in administrations, changes are expected for the ACA and a range of other laws and regulations affecting health care and health benefits. Ballard Spahr attorneys established the Health Care Reform Initiative to monitor and analyze legislative and regulatory developments. We will continue to follow developments in this area as they emerge. Changes may come to the Health Care Reform Dashboard, but it will continue to serve as an online resource center for news and analysis on developments regarding the ACA and health care reforms that follow.
Attorneys in Ballard Spahr’s Employee Benefits and Executive Compensation Group help clients design and implement compensation and benefits packages that comply with today’s complex regulatory requirements, attract and retain a quality workforce, and maintain fiscal and fiduciary responsibility. The Health Care Group provides counsel to health care providers, health plans, and insurance companies on regulatory and transactional matters.