Employers, Health Plans Should Brace For Tightened Federal Mental Health Coverage Mandate Disclosure And Enforcement

June 16, 2017

Employer and other group health plan sponsors, fiduciaries, insurers and other plan vendors should verify the adequacy of their current health plan or policy’s mental health coverage rules and administration with existing federal mental health coverage and disclosure requirements imposed by the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) in light of expanding responsibilities and enforcement risks highlighted by new guidance jointly published by the Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury (collectively, the Departments) on June 16, 2017 concerning the effect of the Patient Protection and Affordable Care Act (ACA) and the 21st Century Cures Act (Cures Act) on the MHPAEA as well as the latest guidance on federal privacy and data security rules on the use, protection and disclosure of mental health and substance abuse related health information and records under the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

Solutions Law Press, Inc. will host a webinar update on these federal mental health and substance abuse requirements including the new and proposed MHPAEA guidance and recent HIPAA developments 11:30 a.m. to 12:30 p.m. Central Time on June 27, 2017.

Prepare For Expanded Federal Mental Health & Substance Abuse Disclosure Requirements, Enforcement 

Generally, MHPAEA requires that the financial requirements and treatment limitations imposed on mental health and substance use disorder (MH/SUD) benefits cannot be more restrictive than the predominant financial requirements and treatment limitations that apply to substantially all medical and surgical benefits as well as imposes several disclosure requirements for informing participants and beneficiaries about those requirements on group health plans and health insurance issuers. See Internal Revenue Code sections 9812(a)(4) and 9815; Employee Retirement Income Security Act (ERISA) sections 104(b), 502(c), 503, 712(a)(4) and 715; Public Health Services Act (PHS Act) sections 2726(a)(4) and 2719.

Since enacting the MHPAEA, federal requirements for mental health and substance abuse coverage and disclosure requirements were further expanded as a result of the enactment of the ACA.  Furthermore, provisions of the Cures Act enacted on December 13, 2016 sought to improve compliance with MHPAEA by requiring the Departments of Labor, Health and Human Services, and Treasury to solicit feedback from the public on how to improve disclosure of the information required under MHPAEA and other laws.

The Departments previously already published a series of guidance addressing disclosure obligations under MHPAEA and other laws. See, e.g., 26 CFR 54.9812-1(d)(3) and 54.9815-2719; 29 CFR 2520.104b-1, 2560.503-1, 2590.712(d)(3) and 2590.715-2719; 45 CFR 146.136(d)(3), 147.136 and 147.160; See also 78 FR 68240, 68247 (Nov. 13, 2013); See also Affordable Care Implementation FAQs, Part V, Q&A-10, available here and here; Affordable Care Act Implementation FAQs, Part XVII, Q&A-8, available here and here; Affordable Care Act Implementation FAQs, Part XXIX, Q&A-12 and 13, available here and here;  and Affordable Care Implementation FAQs, Part 31, Q&A-9, available here and here;  and Affordable Care Act Implementation FAQs, Part 34, Q&A-1, available here and here.

The MHPAEA provisions and implementing regulations expressly provide that a plan or issuer must disclose the criteria for medical necessity determinations with respect to MH/SUD benefits to any current or potential participant, beneficiary, or contracting provider upon request and must make available the reason for any denial of reimbursement or payment for services with respect to MH/SUD benefits to the participant or beneficiary.

By expanding and supplementing the prior guidance, Mental Health Parity Implementation FAQs Part 38 published June 16 officially announces the Departments now are raising further the bar the Departments expect health plans and insurers to meet to fulfill the MHPAEA’s requirements for informing participants and beneficiaries about their mental health and substance abuse coverage and benefit rights under their plans in light of  the enactment of the ACA and Cures Act.

Beyond confirming their heightened disclosure expectations, the Departments also published and invited comments on a Draft MHPAEA Disclosure Template that participants and beneficiaries could use to request mental health coverage and benefit information form plans and insurers as well as PRA Information Collection Request requesting comments on the proposed disclosure template and other mental health and substance abuse issues and guidance.

Unquestionably, the Departments’ joint publication of the guidance package and proposed model notice clearly signal that the Departments plan to step up efforts to hold health plans and insurers responsible for properly notifying participants and beneficiaries about their their mental health  and substance abuse rights  under the MHPAEA, the ACA and the Cures Act.  Beyond this probable increase in enforcement and the proposed imposition of new additional responsibilities proposed in the new guidance, publication of guidance like this usually signals in enhanced audit and enforcement.

Real Health Plan Compliance Exposures Already Exist Today

While bracing for new responsibilities and tighter enforcement, employer and other health plan sponsors, health insurers, plan fiduciaries and others involved in health benefit administration also need to appreciate that the exposure to agency and private enforcement actions isn’t just a future concern.  Mental health coverage compliance exposures already present substantial risks today.  

After years of relatively lax enforcement of mental health mandates, the Departments over the past year began stepping up outreach and enforcement of the federal mandates in response to pressure fueled by growing public and Congressional pressure arising from concern over the U.S. opioid epidemic, mass shootings committed by persons suffering mental illness and other highly publicized events.  In fact, HHS and DOL since as early as October, 2016 already have taken a series of deliberate steps to strengthen compliance and enforcement of federal mental health coverage and other laws which already are increasing public and private oversight and enforcement by the Departments, state agencies and participants and beneficiaries.

Violations Create Substantial Liability Exposures For Employers & Other Sponsors, Plans & Insurers

Ensuring proper compliance with these federal rules is critical because violations can trigger substantial liability for the plans as well as employer and other sponsors.  These mental health rules are among the federal health plan mandates that trigger employer excise tax liability and Form 8928 excise tax self assessment and payment obligations under the Internal Revenue Code.  Consequently,  in addition to the claims and fiduciary liabilities that violations of these mental health mandates can create for group health plans and their fiduciaries, violations also expose employers and other health plan sponsors to liability to self identify, self-report on Internal Revenue Service Form 8928 and self-pay and excise tax of up to $100 per participant per day per uncorrected violation by the due date for filing of their business’ annual tax return.

Participate in June 27 Webex To Learn Key Information

Solutions Law Press, Inc will host a webinar briefing on the mental health rules including the new guidance from 11:30 a.m. to 12:30 p.m. Central Time on June 27, 2017. The webinar will cover:

  • The key federal mental health coverage and disclosure requirements imposed on group health plans the MHPAEA, ACA and Cures Act, as construed under the latest regulatory guidance;
  • A discussion of the the Draft MHPAEA Disclosure Template and PRA Information Collection Request and their potential implications for health plans and their employers and other sponsors, fiduciaries, administrators and insurers;
  • A discussions of common plan terms and practices to watch for and to manage common compliance risks based on existing guidance;
  • A review and update on best practices for administering health plans to comply with special requirements affecting the use, access and disclosure of mental health and substance abuse treatment, payment and other health records under HIPAA;
  • Other tips; and
  • A discussion of audience questions and answers as time permits.

If you are interested in receiving an invite to the webinar, e-mail here.