The Consolidated Appropriations Act of 2021 (CAA) that was passed on December 27, 2020 is known primarily for its third round of direct payment stimulus checks. However, there were additional health benefit related provisions including: (1) expanded relief for health and dependent care flexible spending arrangements; (2) new reporting requirements for commission and similar compensation; (3) new requirements to limit surprise billing; (4) new expanded compliance requirements under the Mental Health Parity and Addiction Equity Act (MHPAEA). This post will discuss the provisions impacting mental health parity.
Mental Health Parity and Addiction Equity Act Provisions in the CAA
Health plans that provide both medical/surgical benefits and mental health/substance abuse benefits, and which impose nonquantitative treatment limitations (NQTLs) on mental health/substance abuse benefits, must perform and document a detailed comparative analysis. This analysis must be made available to a state authority, DOL or HHS beginning 45 days after the enactment of the CAA (February 10, 2021), but only upon request from one of those agencies. We believe that a request by a government agency for this documentation will likely be triggered by a participant complaint.
The CAA contains detailed and specific rules about what must be contained in the comparative analysis. If the applicable agency reviews the comparative analysis and determines that the plan is not in compliance, the plan must specify the actions it will take to be in compliance and, within 45 days, provide the agency with a new comparative analysis that demonstrates compliance. Following the 45-day corrective action period, if the applicable agency makes a final determination that the plan is not in compliance, then not later than 7 days after such determination, the agency shall notify all individuals enrolled in the plan that the plan is not in compliance.
The CAA’s list of specific information that health plans must disclose on request largely overlaps with information in DOL’s self-compliance tool for evaluating whether NQTLs comply with the parity law.
Under the new law, plans must make available to the DOL the following information:
- Terms — the specific plan and coverage terms on NQTLs for MH/SUD and M/S benefits and a description of these benefits, including which of the six parity classifications contains the benefit (i.e., inpatient in network, outpatient in network, pharmacy, etc.)
- Factors — the factors used to determine that the NQTLs should apply to the benefits
- Evidentiary standards — the evidentiary standards and any other sources on which the plan relied to back up the factors used to design the NQTL and justify its application to a benefit
- Comparative analysis — a separate analysis of each NQTL for benefits in each classification “demonstrating that the processes, strategies, evidentiary standards and other factors used to apply the NQTLs” to MH/SUD benefits (in written terms and plan operations) are “comparable to and applied no more stringently” than those used to apply NQTLs to M/S benefits
- Findings and conclusions — the results of the comparative analysis giving the plan’s or issuer’s specific findings on what is and is not in compliance with the parity law
Diversified Response: The analysis requirements are long and complicated. It is our opinion that completion of the DOL’s mental health parity self-assessment tool which they provide online (click here) will not be sufficient to meet the analytic requirements set forth in the CAA. Plan sponsors will want to contract with a vendor that can complete this analysis in the timeframes required. A failure to meet these rules will cause the agency to inform all participants of the plan’s non-compliance — which may likely result in a class action lawsuit against the plan. Although the CAA has made the deadline for compliance to be February 10, 2021, most experts agree that since the DOL has up to 18 months from the passage of the CAA to release guidance, for now a good faith effort and/or showing that plan sponsors are making steps to be compliant will suffice.
Diversified Group is in the process of vetting and analyzing potential partners who will be able to undertake this analysis on behalf of our self-funded clients. Although the CAA puts the responsibility for this analysis squarely on the plan sponsor, it is our contention that our clients will need assistance in ensuring that they have an analysis done and on hand. Once we have determined the details, we will be reaching out to our clients individually to assess interest in having us and our selected vendor prepare the MHPEAE analysis. There will be a cost associated with the analysis which we are still evaluating, however, we are strongly encouraging plan sponsors to engage. The DOL can require plans to correct parity violations, such as by reprocessing improperly denied claims. The DOL also can refer violations to IRS, which can assess civil penalties of up to $100 a day. Additionally, the CAA requires the agencies with MHPHEA oversight to issue an annual report to Congress and the public. The report must include, among other details, a summary of the comparative analyses reviewed during the year and the identity of each plan or issuer receiving a final determination of noncompliance. Failure to even attempt to do this analysis will be considered noncompliance.
Please look for further communication on this issue from Diversified Group in the coming weeks.