The U.S. Department of Labor (DOL), U.S. Department of the Treasury (Treasury), and the U.S. Department of Health and Human Services (HHS) recently issued 395 pages of proposed rules designed to guide group health plans on compliance with mental health parity laws. These rules clarify that the Biden administration intends to restrict plans’ use of nonquantitative limits on mental health and substance use disorder treatment.
The proposed rules outline the data collection and evaluation methods plans must follow to demonstrate that they meet mental health parity law requirements. More specifically, plans must compare their nonquantitative treatment limitations on behavioral health care with those on medical care and report the results of these comparisons to federal and state agencies and individual plan participants.
Defining Standards for Network Adequacy
The proposed rules provide a welcome focus on defining network adequacy standards. All too often, a lack of in-network options causes disputes between plans and patients over behavioral health care treatment, as patients are forced to seek more expensive out-of-network care. Furthermore, out-of-network usage tends to be much higher for behavioral health care than for any other type of health care treatment.
Potential Safe Harbor Mechanism
The proposed rules, which may become effective January 1, 2025, indicate that there may be a safe harbor mechanism that allows plans meeting certain standards to determine they are following the law’s network composition requirements concerning parity laws. The Employee Benefits Safety Administration (EBSA) also released Technical Release 2023-01P, which discusses the safe harbor mechanism in greater detail and solicits public comment on the type of data plans should be required to collect and submit in exchange for safe harbor from enforcement.
New Requirements for Managed Care
Finally, the proposed rules set forth significant new requirements for managed care or utilization management. Managed care involves how plans justify treatment limitations to control costs and direct limited plan resources. This portion of the proposed regulations is complex, with each agency devoting 50 pages to discussing managed care.
As a result of these rules, the agencies state that plans may incur costs, and therefore, they are soliciting comments on the impact of potential costs. Ultimately, however, they expect that implementing the rules will result in expanded coverage of mental health and substance use disorder benefits. Nonetheless, some plans may reduce coverage for medical and surgical care by instituting the same limitations they currently impose on behavioral health care.
HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.