Employers Await Mental Health Parity Help as Frustrations Build

Employers that provide health insurance are keeping an eye out for two developments from the Department of Labor as they struggle to comply with reporting requirements for their mental health coverage amid ongoing frustration with the insurers that administer their plans.

Employer-sponsored health plans expect a proposed rule from the DOL to spell out how to comply with requirements to document their mental health coverage. Meanwhile, an agency report to Congress likely will find for the second year in a row that they’re doing a poor job.

Employers that sponsor health plans have been calling for the DOL to provide specific examples of what the agency would consider to be adequate analyses on why some mental health coverage limits may differ from coverage for medical and surgical benefits. They also say they often are unable to get the information they need from third parties—typically insurers—that administer their plans.

The Mental Health Parity and Addiction Equity Act, enacted in 2008, requires insurance coverage for mental health conditions, including substance use disorders, to be no more restrictive than insurance coverage for other medical conditions. The Consolidated Appropriations Act of 2021 (Public Law No. 116-260) requires health plans and health insurers to document comparisons of nonquantitative treatment limitations for mental health coverage to those for medical and surgical claims. Nonquantitative limits include restrictions such as pre-authorization or requiring more frequent reviews of treatment plans.

The proposed rule will likely cover requirements that health plans be ready to share with the agency their comparative analysis showing how they comply with the mental health parity rules, Katy Johnson, senior counsel for health policy at the American Benefits Council, said in an interview.

“Employers really need more guidance on how to comply with the report requirement,” Johnson said. “We have asked several times, along with many other stakeholders, for guidance on the comparative analysis.”

Not Enough Proof

A January 2022 report to Congress from the DOL and departments of Health and Human Services and the Treasury found that none of the more than 1,000 plans reviewed provided sufficient analyses showing their mental health coverage wasn’t more restrictive than medical coverage.

Lisa Gomez, DOL assistant secretary for the Employee Benefits Security Administration, recently said the next report “does not show as much progress as we would hope and like.”

What the first report demonstrated “was not that employers are doing something wrong, but that DOL is doing something wrong,” James Gelfand, president and CEO of the ERISA Industry Committee (ERIC), said in an interview. “When every student fails the test, the test is the problem, not the student.”

ERIC represents large employers that sponsor employee benefit plans.

At a recent conference, Gomez said DOL is working on “more guidance by the way of rulemaking as well as coming out with another report to Congress that gives some examples about the do’s and don’ts of mental health parity.”

Gomez said DOL was aware of the “challenges” employers face dealing with plan administrators, and “we’re trying to kind of take that all into consideration and come up with more guidance.”

In the January 2022 report, the Labor Department recommended that Congress amend the Employee Retirement Income Security Act “to expressly provide the agency with the authority to directly pursue parity violations by entities that provide administrative services to ERISA group health plans (including health insurance issuers that provide administrative services to ERISA plans and TPAs),” or third-party administrators.

It isn’t clear how much the DOL can do to push service providers to provide the comparative analyses and information needed by health plans to satisfy the agency.

The Labor Department has authority over health plans but not plan administrators, Gomez said at the conference.

It’s difficult for the DOL to get plan administrators to give information to plans, Joanne Roskey, a member of Miller & Chevalier who recently worked in the DOL solicitor’s office, said in an interview. Contracts between service providers and plans govern much of what can be disclosed, she said.

DOL has authority to get access to plan information from service providers, Roskey said. “But the concern is how to get access to the parties that have to do these comparative analyses,” she said. “That’s a tricky one.”

“The regulations can address maybe what plans and issuers have to do when they are not given access, but whether or not the regs can actually mandate conduct by the provider and holders of this information is not something that’s very clear,” Roskey said.

Focus on Major Lawsuits

The agency has been focusing on major lawsuits, “trying to go out to the service providers themselves, so that even though we might not have enforcement authority with respect to them directly, that we can be trying to find out the plans that they work with,” Gomez said.

“There’s probably similar problems at the various places, and we’re hoping that if the third-party administrators and other service providers see that, that they will sort of change their ways and it will trickle down,” Gomez said.

She encouraged plans to contact DOL if they have problems getting information from service providers.

In one of the few lawsuits brought by the agency, in 2021 United Behavioral Health and United Healthcare Insurance Co. agreed to pay $13.6 million to beneficiaries and $2 million in penalties to resolve alleged mental health parity violations.

The DOL and the New York state attorney general said the insurer reduced reimbursement rates for out-of-network mental health services and overcharged participants for the services, among other things, resulting in payment denials, the agencies said.

Uncertainty About Desired Data

The problem isn’t that plan administrators won’t provide the information to plan sponsors, Pamela Greenberg, president and CEO of the Association for Behavioral Health and Wellness, said in an interview.

“It’s more this uncertainty that exists around what information is it that the regulator wants,” she said.

The ABHW represents health insurers that cover behavioral health and that typically administer employer-sponsored plans.

“They’re giving the regulators information, but then the regulators come back and say, can we see this? What about this?” Greenberg said. The audit process is a “back-and-forth process,” she said.

If the DOL again finds that health plans aren’t meeting the parity analysis requirements, the agency should name plans or insurers that aren’t compliant, Tim Clement, director of legislative development for the American Psychiatric Association, said in an interview.

“They key thing to look for in this report is, is anyone going to be named,” Clement said. “If they keep on asking plans and issuers for comparative analyses and they never get a good one, that means the plan or issuer is violating the law, and they should be named in this report.”

‘Bad Actors’

But plans also need to guard against providers that take advantage of health plans for services that may not be warranted, Andy Johnson, fund administrator for the Teamster Center Services Fund, said in an interview. The fund serves 18 Teamster benefit plans in the New York City area.

“Parity is an outstanding goal, and allowing people to go get the treatment they need is a responsible goal,” Johnson said. But, “the reality is, this is not a level playing field. There are bad actors. There still are unethical treatment programs that refuse to join networks,” that “lure people in” and “charge exorbitant prices,” he said.

Funds “have a limited amount of resources,” Johnson said. “Your whole fund is not for behavioral health.”