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The Obama administration on Friday finalized new regulations to expand coverage requirements for employers providing mental health and substance abuse treatment under their group health care plans.
The long-awaited final rules are based on the 2008 Mental Health Parity and Addiction Equity Act. They will prohibit large employers — defined as firms with more than 50 full-time workers — from applying copayments, deductibles and utilization limits for mental health care and substance abuse treatments less favorable to plan members than those they apply to medical and surgical services.
While the final regulations do not expressly require large employers to provide coverage for mental health and addiction treatment services, employers that choose to provide such coverage must ensure it is substantively equal to their group medical benefits within six service classifications, including in- and out-of-network inpatient and outpatient care, emergency treatment and prescription drug services.
Additionally, the final regulations will prohibit employers from using employee-assistance programs to limit or direct mental health care — or requiring employees to exhaust their EAP allowances before they can access mental health care under group health plans — if similar restrictions have not been applied to medical and surgical care.
“For way too long, the health care system has openly discriminated against Americans with behavioral health problems,” U.S. Health and Human Services Secretary Kathleen Sebelius said during a conference call with reporters Friday. “In the past, it was legal for health insurance plan to treat these disorders differently from medical and surgical needs.”
As a result of the 2008 law and its predecessor, the Mental Health Parity Act of 1996, Ms. Sebelius said, “we are finally closing these gaps in coverage.”
The final rules — effective for plan years beginning on or after July 1, 2014 — provide clarification on a number of issues left unresolved under the interim regulations published more than three years ago. They include: the law's application to intermediate levels of care received in residential treatment or intensive outpatient settings; disclosure rights of plan participants; and the extent to which the parity requirements include limits set on the cost or availability of care according to geography, facility type or network adequacy.
Other changes outlined in the final regulations included clarifications on the formula by which employers can determine if they qualify for the law's “increased cost exemption,” as well as the extent to which the regulations will apply to small employers going forward.
Under the original law and the 2010 interim rules, employers with 50 or fewer full-time workers were granted an exemption from the parity requirements. However, the final rules state, that exemption has essentially been wiped out, due to HHS' establishment in February of required essential health benefits for small group health plans under the Patient Protection and Affordable Care Act. The health care reform law includes coverage for mental health and addiction treatment compliant with the parity regulations “even where those requirements would not otherwise apply directly.”
“Thus,” the final rules state, “all insured, non-grandfathered, small group plans must cover essential health benefits in compliance with the MHPAEA regulations, regardless of MHPAEA's small employer exemption.”
Following the publication of the 2010 interim rules, several business owners and industry groups asked federal regulators to provide more detailed guidelines regarding the comparability of mental health/addiction services and medical/surgical services, including specific service pairings under the regulation's classification table.
“It's pretty easy to determine parity where you're dealing with a dollar figure,” said Gretchen Young, senior vice president of health policy at the Washington-based ERISA Industry Committee. “It's a lot more difficult when you look at the six classifications of services. For instance, if a plan member is receiving residential treatment for mental health, does that compare more closely to hospitalization or a skilled nursing facility? Those are the issues that we're struggling with.”
Federal regulators declined to provide that additional specificity. In the final rules, it states that “pairing specific mental health or substance use disorder benefits with specific medical/surgical benefits is a static approach that the departments do not believe is feasible, given the difficulty in determining “equivalency” between specific medical/surgical benefits and specific mental health and substance use disorder benefits and because of the differences in the types of benefits that may be offered by any particular plan.”