The Consolidated Appropriations Act, 2021 (CAA) was enacted on Dec. 27, 2020. The CAA includes a $900 billion coronavirus relief package that provides funding to individuals and businesses. Within the CCA, there is a somewhat overlooked but important provision that affects group health plans because it requires such plans to prepare a report with specific information demonstrating compliance with the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). Group health plans do not have a universal filing date but instead must be prepared to submit this report when/if a state or federal authority requests the information. Government requests may start under the CAA as
early as February 10, 2021 but it is likely government authorities will allow more time to group health plans and carriers to prepare before requesting these reports. Carriers for insured plans are responsible to report, however employers who sponsor self/level funded plans will need to prepare these reports.
Background
Generally, mental health benefits are not required to be included with a group health plan. However, if a group health plan does provide these benefits, it may not provide any less restrictive or less favorable mental health and substance use disorder (MH/SUD) benefits than those provided under medical and surgical (M/S) benefits. This equity includes financial requirements (e.g. parity with deductibles, copayments, coinsurance, and out-of-pocket expenses) and treatment limits (e.g. parity with frequency of visits, number of visits, days of coverage). early as February 10, 2021 but it is likely government authorities will allow more time to group health plans and carriers to prepare before requesting these reports. Carriers for insured plans are responsible to report, however employers who sponsor self/level funded plans will need to prepare these reports.
In addition, MHPAEA requires group health plans and issuers to disclose certain information to plan participants regarding the plan’s coverage of MH/SUD benefits.
Although the MHPAEA applies to insured and self/level funded plans that choose to include MH/SUD benefits in their benefit packages, other state and federal laws may require a plan to provide these benefits. In addition, the Affordable Care Act (ACA) now requires non-grandfathered health plans in the individual and small group markets to provide essential health benefits (which include MH/SUD services), as well as comply with the federal parity law requirements.
For an in-depth discussion on the MHPAEA requirements, please click here.
The Impact of the CAA on MHPAEA
The Consolidated Appropriations Act, 2021 (CAA) was enacted on Dec. 27, 2020. The CAA includes provisions that strengthen enforcement and increase transparency under of the MHPAEA rules. Specifically, it requires group health plans to analyze (and then create a report of) the nonquantitative treatment limitations (NQTLs) used for M/S benefits as compared to MH/SUD benefits. NQTLs are items like prior authorizations, written treatment plan requirements, step therapy/fail first protocols, medical necessity reviews, or other limitations or conditions for someone to receive care — that are not tied to a number (in contrast to quantifiable items like copayments or day/visit limits).
The new disclosure/reporting rules under the CAA require plans to make available, upon request:
• the specific plan or coverage terms or other relevant terms regarding the NQTLs and a description of all MH/SUD or M/S benefits to which each such term applies in each respective benefit classification;
• the factors and evidentiary standards used to determine that the NQTLs will apply to MH/SUD benefits and M/S benefits;
• the comparative analyses demonstrating that the processes, strategies, evidentiary
standards, and other factors used to apply the NQTLs to MH/SUD benefits, as written and in operation, are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, and other factors used to apply the NQTLs to M/S benefits in the benefits classification;
• the specific findings and conclusions reached by the group health plan or health insurance issuer with respect to the health insurance coverage, including any results of the analyses.
The federal agencies tasked with requesting these reports are the Department of Labor (DOL), the Department of Health and Human Services (HHS) and the Treasury Department (IRS) (Departments). The Departments are required to request reports from at least 20 group health plans each year and must then develop a report for Congress on MHPAEA compliance. The Departments are also required to request the comparative NQTL analysis reports any time they are reviewing a complaint from a participant on MHPAEA. In addition, each individual state has authority to request these reports, so it is expected that states will respond to this in a variety of ways.
If a group health plan is asked to demonstrate compliance with the NHPAEA, it must provide this report. There is no current timeframe in the rules by which to provide the report after the request, the current language is limited to making available upon request. It is anticipated that more information will be provided in future guidance or the request itself will include a timeframe. However, many other issues have been clarified through the FAQs the Departments released on April 2, 2021.
After receiving the report, regulators will review and determine compliance. If regulators find the plan is out of compliance with the MHPAEA, a corrective action plan will be provided and the plan will have 45 days to implement. If the plan is still not in compliance after those 45 days, the plan must notify (within 7 days) all individuals enrolled in the noncompliant plan. This notice has the potential to spark participant litigation.
Steps and Resources
For employers that sponsor insured group health plans
Carriers and insurers are tasked with demonstrating through a report compliance with the nonquantitative treatment limit (“NQTL”) requirements of the MHPAEA. However, it is wise for employers with insured group health plans to confirm with their carrier/insurer steps that are being taken to prepare the report. Note it is not enough to simply regurgitate the group health plan design and/or Summary Plan Description(s). The FAQs issued on April 2, 2021, include more helpful specifics on what is expected in the report, particularly within the information at FAQ number 2.
For employers that sponsor Self/Level Funded Group Health Plans
Employers who sponsor self/level funded plans may want to consider engaging with a vendor that specializes in MHPAEA compliance, or consulting with their current TPA for assistance. The current TPA may, depending on the terms of the contract for services with the employer, have a contractual obligation to assist to some degree. However, employers who sponsor self/level funding group health plans are ultimately responsible to comply and create the report if/when requested and should therefore proactively communicate with the TPA or otherwise take steps to insure they are prepared to demonstrate compliance with nonquantitative treatment limit (“NQTL”) requirements of the MHPAEA. As mentioned above, it is not enough to simply regurgitate the group health plan design and/or Summary Plan Description(s).
The FAQs issued on April 2, 2021 include more helpful specifics on what is expected in the
comparative analyses, particularly within the information at FAQ number 2.
Whether using a mental health parity vendor, or coordinating with the current TPA, employers who sponsor self/level funded plans should also utilize the self-audit tool provided by the DOL which can be found here.
This document is not intended to be exhaustive, nor should any information be construed as tax or legal advice. Readers should contact a tax professional or attorney if legal advice is needed. Although we have made every effort to provide complete, up-to-date, and accurate information in this document, such information is meant to be used for reference only. If there is any inconsistency between the information contained in this document and any applicable law, then such law will control.
