Benefit advisers working with employers offering medical plans take note. Two important final regulations issued jointly by the Internal Revenue Service, Department of Labor and Department of Health and Human Services apply to plan years beginning on or after July 1, 2014. For plans and policies that operate on a calendar year, there is still time (until Jan. 1, 2015) to comply; however, plans and policies with a July 1 plan or policy year must comply now.
Mental health and substance use disorder parity final regulations
Enacted in 2008, the Paul Wellstone and Pete Domenici Mental Health Parity And Addiction Equity Act requires parity between mental health or substance use disorder benefits and medical/surgical benefits with respect to financial requirements and treatment limitations under group health plans and group and individual health insurance coverage. The Departments first grappled with these requirements in comprehensive interim final regulations issued in 2010. The interim final regulations established six classifications of benefits for comparison and required that parity be achieved across each classification in addition to creating methodologies for determining whether parity had been achieved.
The final regulations issued by the departments on Nov. 13, 2013 make a number of clarifications to the interim final regulations, including:
- Permitting outpatient benefits to be subdivided into office visits and other outpatient items and services;
- Limiting the lifetime and annual limit parity rules to benefits that are not considered to be essential health benefits for purposes of complying with the Affordable Care Acts prohibitions of lifetime and annual limits;
- Clarifying that compliance with the ACAs preventive service requirements (which include requirements to offer, i.e., alcohol misuse screening and counseling and depression counseling) will not, for that reason alone, require compliance with mental health parity;
- Adding two additional examples of non-quantitative treatment limitations; and
- Providing a methodology for determining the increase in a plans costs attributable to mental health parity (for purposes of the increased cost exemption).
Wellness plan final regulations
Under the Health Insurance Portability and Accountability Act of 1996, group health plans and health insurance issuers are prohibited from discrimination against individuals in eligibility, benefits or premiums based on a health factor, except that different premiums or other cost sharing may be applied under a compliant wellness program. In 2006, the Departments issued joint final regulations setting forth the wellness plan standards and on Nov. 26, 2012 the Departments published proposed regulations modifying the wellness plan standards to reflect ACA changes.
The final regulations issued by the Departments on June 3, 2013 make a number of substantial changes and clarifications to the prior wellness plan regulations, including:
- Retaining the participatory and health contingent wellness program categories, but sub-dividing the health contingent category into activity-only programs (which require an individual to perform or complete an activity related to a heath factor in order to earn a reward, but not to attain or maintain a specific health outcome) and outcome-based programs (which require an individual to attain or maintain a health outcome in order to obtain an award) and providing rules for each sub-category.
- Clarifications to the reasonable alternative standard that must be provided to individuals who are unable to meet the standards required under a health contingent program, including:
- A requirement that, if an individuals personal physician rejects a reasonable alternative standard as medically inappropriate, the individual must be offered a second reasonable alternative standard that incorporates the physicians recommendations; and
- A clarification that a full-year reward must be provided to individuals who meet an alternative standard mid-year, and methodologies for paying such award.
What to do now
Check the applicable year for all of your employer clients health plans and policies immediately. For July 1 plan or policy years, make sure the plans and policies currently comply with the new mental health parity and wellness rules. For all other plan or policy years, make sure that your employer clients plans and policies will comply with the above rules by the start of the next plan or policy year.
Check the applicable year for all of your employer clients health plans and policies immediately.
- For MHPAEA, for July 1 plan or policy years, make sure that plans and policies currently comply with the new MHPAEA rules.
- For wellness, for plan or policy years beginning from Jan. 1, 2014 to date, make sure plans and policies currently comply with the new wellness regulations.
For all other plan or policy years, work with your clients to make sure plans and policies will comply with the above MHPAEA and wellness rules by the start of the next plan or policy year.
Patricia Moran is a legal counsel with Mintz Levin, focusing on employee benefits and compensation matters; she can be reached at email@example.com or (617) 348-3085.
The information in this legal alert is for educational purposes only and should not be taken as specific legal advice.
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