Parity ‘Warning Signs’ And An Employer Shared Responsibilty Estimator

The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), as amended by the Affordable Care Act, requires that group health plans and insurers in the group and individual markets ensure that financial requirements and treatment limitations on mental health and substance use disorder (MH/SUD) benefits are no more restrictive than requirements and limitations imposed on medical and surgical benefits. This prohibition applies both to quantitative (numerical) limitations, like visit limits, and to non-quantitative (NQTL-non-numerical), limitations such as pre-authorization requirements.

Under the MHPAEA regulations, a plan or insurer may not impose an NQTL on MH/SUD benefits unless, under the written terms of the plan and in practice, any processes, strategies, evidentiary standards, or other factors used in applying the NQTL to MH/SUD benefits in a classification are comparable to, and applied no more stringently than, those used and applied with respect to medical surgical benefits in the same classification.

On June 1, 2016, the departments of HHS and Labor issued a list of plan provisions identified as "warning signs" that should "trigger careful analysis" to compare terms applied to medical/surgical coverage to determine whether a violation of the MHPAEA might be present. The provisions do not automatically violate the law, as long as they are applied equally to medical/surgical benefits, and the list is not exhaustive. Each term is described in greater detail in the guidance than appears here.

The listed terms include:

• Pre-authorization and pre-service notification requirements, including blanket preauthorization requirements for all MH/SUD services, treatment facility preauthorization requirements not applied to medical/surgical services, or more stringent medical necessity review or prescription drug preauthorization requirements or extensive pre-notification requirements than those applied to medical/surgical services;
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• Fail-first protocols, requiring an individual to fail to achieve progress with a less intensive form of treatment before a more intensive form is covered;
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• Probability of improvement requirements, for example, offering coverage of continuing treatment only if improvement is demonstrated or probable;
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• Written treatment plans, requiring treatment plans completed by specified professionals, within a certain time, or on a regular basis where similar requirements are not applied equally to medical/surgical coverage;
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• Other limits or exclusions, including
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  • Excluding chemical dependency services in event of noncompliance,
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  • Excluding coverage for residential treatment,
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  • Geographical limitations on MH/SUD services not imposed on medical and surgical services, or
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  • Facility licensure requirements not imposed on medical/surgical facilities.

Employer Shared Responsibility Estimator

The IRS has recently made available an employer shared responsibility estimator. Employers can use the estimator to determine how many full-time employees they have, including full-time equivalent employees; whether they are large employers subject to the employer shared responsibility tax; and an estimate of their total potential liability based on their total number of full-time employees if they fail to offer qualifying coverage to their employees. The IRS also offers an individual shared responsibility estimator, an individual premium tax credit estimator, and a small business tax credit estimator.

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