Washington D.C. Employment Law Update : Washington D.C. Employment Lawyer & Attorney : Littler Mendelson Law Firm : Virginia, Tyson's Corner

The MHPAEA was signed into law on October 3, 2008, as part of H.R. 1424, the Tax Extender's and Alternative Minimum Tax Relief Act of 2008, a part of the massive financial bailout legislation. The Act amends current requirements under ERISA, the Public Health Service Act and the Internal Revenue Code for parity in mental health benefits offered under a private group health benefit plan. In essence, this law requires private group health benefit plans that provide mental health and/or substance use disorder benefits through a group health benefit plan that also offers medical and surgical benefits do so on an equivalent basis. The Act imposes several plan design requirements on group health benefit plans that offer mental health and/or substance use disorder benefits including equity in cost sharing, treatment limitations, and coverage decision requirements. The Act builds on the current mental health parity law that requires parity for annual and lifetime limits on coverage, and contains specific and narrow exceptions for small group health benefits plans and for increased costs.

The interim final rules, among other things:

• Make a number of changes to the general applicability provisions in the MHPA 1996 regulations;
• Apply the general parity requirement to financial requirements and quantitative treatment limitations;
• Establish a special rule for applying the general parity requirement of the MHPAEA to prescription drug benefits;
• Explain the cumulative financial requirements and quantitative treatment limitations, including deductibles;
• Provide an illustrative list of non-quantitative treatment limitations, including medical management standards; prescription drug formulary design; standards for provider admission to participate in a network; determination of usual, customary, and reasonable amounts; requirements for using lower-cost therapies before the plan will cover more expensive therapies (also known as fail-first policies or step therapy protocols); and conditioning benefits on completion of a course of treatment;
• Clarify that, in order for plans subject to ERISA (and health insurance coverage offered in connection with such plans) to satisfy this requirement that a reason for a denial of reimbursement or payment for services with respect to mental health or substance use disorder benefits be provided, disclosures must be made in a form and manner consistent with the rules for group health plans in the ERISA claims procedure regulations, which provide (among other things) that such disclosures must be provided automatically and free of charge; and
• Stipulate that the increased cost exemption may only be claimed for alternating plan years.

Comments on these rules are due on or before May 3, 2010. Written comments bearing the identification number: RIN 1210-AB30 may be sent or hand-delivered to Office of Health Plan Standards and Compliance Assistance, Employee Benefits Security Administration, Room N-5653, U.S. Department of Labor, 200 Constitution Avenue NW, Washington, DC 20210, Attention: RIN 1210-AB30. Alternatively, comments may be sent via email to E-OHPSCA.EBSA@dol.gov, or submitted to the federal eRulemaking Portal: http://www.regulations.gov.

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As stated in an EBSA press release about this request, the MHPAEA – among other things – creates new rules for any financial requirement (e.g., cost-sharing) or treatment limitations (e.g., visit limits) on mental health and substance use disorder benefits so that they are no more restrictive than predominant requirements or limitations applied to substantially all medical and surgical benefits covered by a plan. MHPAEA also reauthorized several provisions relating to parity in annual and lifetime dollar limits for group health plan coverage enacted as part of the Mental Health Parity Act (MHPA) of 1996.

The RFI seeks public comment to assist in the development of MHPAEA regulations, and to perform a cost-benefit analysis of initiating this proposed rulemaking. To that end, the EBSA has posed a number of questions, including the following:

• What policies, procedures or practices of group health plans and health insurance issuers may be impacted by MHPAEA? What direct or indirect costs or benefits would result, and to whom?
• Are there unique costs and benefits for small entities subject to MHPAEA (that is, employers with greater than 50 employees that maintain plans with fewer than 100 participants)? What special consideration, if any, is needed for these employers or plans? What costs and benefits have issuers and small employers experienced in implementing parity under state insurance laws or otherwise?
• Are there additional paperwork burdens related to MHPAEA compared to those related to MHPA 1996, and, if so, what estimated hours and costs are associated with those additional burdens?
• How do plans currently apply financial requirements or treatment limitations to (1) medical and surgical benefits and (2) mental health and substance use disorder benefits? Are these requirements or limitations applied differently to both classes of benefits? Do plans currently vary coverage levels within each class of benefits?
• What terms or provisions require additional clarification to facilitate compliance? What specific clarifications would be helpful?
• What information, if any, regarding the criteria for medical necessity determinations made under the plan (or coverage) with respect to mental health or substance use disorder benefits is currently made available by the plan? To whom is this information currently made available and how is it made available? Are there industry standards or best practices with respect to this information and communication of this information?
• Which aspects of the increased cost exemption, if any, require additional guidance?

Comments responding to the MHPAEA RFI must be submitted on or before May 28, 2009. Written comments may be addressed to the U.S. Department of Labor, Office of Health Plan Standards and Compliance Assistance, Employee Benefits Security Administration, N-5653, 200 Constitution Avenue N.W., Washington, D.C. 20210, Attn: MHPAEA Comments. Comments may also be submitted electronically by email to E-OHPSCA.EBSA@dol.gov or through the federal e-rulemaking portal at www.regulations.gov.