Health plans

Health plans ‘fail to deliver parity’ for mental health and substance use disorder benefits

Diving brief:

  • Health plans ‘fail to deliver parity’ for mental health and substance use disorder benefits, a report of January 25 of the US Department of Labor concluded.
  • This finding is particularly troubling in the midst of a pandemic that has a documented negative impact on individuals’ mental health and leading to increased substance use, Labor Secretary Marty Walsh said in a prepared statement. “As someone in recovery, I know firsthand how important access to treatment for mental health and substance use disorders is,” he added.
  • In response to its findings, the DOL said it would take “unprecedented” action to enforce the law that requires such parity.

Overview of the dive:

The Mental Health Parity and Substance Use Equity Act of 2008 requires health plans to address mental health and substance use disorder benefits – if they offer them – from the same way as other benefits with respect to terms such as co-payment and pre-authorization requirements. “For example, a health insurance organization [covering] nutritional counseling for medical conditions such as diabetes, but not for mental health conditions such as anorexia nervosa, bulimia nervosa and binge eating disorder” fails to create parity, according to DOL .

The agency in its report said it had identified gaps in many plans and worked with them to make changes, but greater enforcement was needed. In addition to using the enforcement tools already available to the Benefits Security Administration, the enforcement subagency, the DOL has called on Congress to grant it the power to impose fines to those who break the law – a move the agency said would “encourage compliance.”

The DOL has also asked Congress to allow it to sue “all appropriate actors” when it finds a violation. “EBSA’s experience is that plan sponsors often rely on the issuer of fully insured plans (or [third-party administrator]in the case of self-insured plans) to administer its [mental health and substance-use disorder] benefits, including designing and implementing coverage limits and conditions that are subject to parity,” the report states, and having the power to sue all entities involved in the design and administration of the scheme would “significantly enhance” the agency’s efforts.

The DOL’s request to hold additional parties accountable is likely aimed at insurance companies, Craig Day, director of Jackson Lewis PC, told HR Dive in an interview. The agency could cover more ground this way, instead of checking employers individually.

And the agency’s demands aside, this recent focus on MHPAEA enforcement likely doesn’t pose a significant risk to most employers, especially those with fully insured plans, Day said. Those employers are unlikely to be held responsible for problems with their health insurance plans, he said.

There’s a bit more risk for self-insured employers, he continued, but penalties generally focus on correcting violations. “You could be dragged into a DOL investigation” and face headaches in that regard, he said, but the remedy would likely be limited to restating the claims in question.

For human resources professionals evaluating health plan offerings, it might be helpful to consider whether each plan complies with the MHPAEA, Day said. Employers could also ask insurance companies to indemnify them against such claims, “but the truth is that most employers have no bargaining power with insurance companies,” he said. “But if you go out and do a tender, an RFP, you might pop the question. It might be worth it.”