Response to President Obama's Health Care Reform Proposal
The White House on Monday released President Obama's newest health care reform proposal, which the President intends to use as the starting point for discussions at a bipartisan health care reform summit scheduled for Thursday.
Estimated to cost $950 billion over 10 years, the proposal is a detailed road map of what President Obama wants from health reform. The plan received extensive coverage Monday from media such as The New York Times, The Washington Post and
USA Today.
The White House says the proposal bridges the gap between the Senate and House bills and includes new provisions meant to "crack down on waste, fraud and abuse." Among the provisions in the President's plan: increasing the threshold for the excise tax on health plans from $23,000 to $27,500 for a family plan, and implementing the same threshold for all plans in 2018; closing the Medicare prescription drug "donut hole;" and creating a new Health Insurance Rate Authority.
Soon after the President’s proposal was made available to the public, Senate and House Republican leadership released statements condemning the plan. House Republican Leader John Boehner (R-OH) issued a statement, and Senate Republican Minority Leader Mitch McConnell issued a news release addressing the plan.
With the Administration ratcheting up the negative insurance company rhetoric last week, it appears the partisan discussions over health care reform show no signs of easing even as a bipartisan summit on health reform rapidly approaches. Despite the current political environment, Aetna supports reasonable, comprehensive health care reform and will continue to work for a bipartisan solution.
Wednesday, February 24, 2010
Tuesday, February 16, 2010
Complying with the new COBRA extension: Employee Benefit News Legal Alert
by Alden J. Bianchi, Esq.
The American Recovery and Reinvestment Act of 2009 was signed on Feb.17, 2009 with the announced purpose of providing a massive economic stimulus to the U.S. economy.
ARRA also included temporary provisions requiring employers to provide federally subsidized premium assistance to certain former employees—referred to as “assistance eligible individuals”—who timely elect health care continuation or “COBRA” coverage.
Although ARRA’s temporary premium subsidies were originally set to expire at the end of 2009, they were extended by the Department of Defense Appropriations Act (DDAA), which was signed into law on Dec. 19, 2009.
This article describes the particulars of this extension, and it explains what employers must do to comply.
Background
Under the ARRA’s COBRA subsidized premium assistance rules, each “assistance eligible individual” is treated as having paid the full amount of the premiums for his or her COBRA continuation coverage for a period of up to nine months if he or she pays 35% of the premium.
The employer, plan, or carrier (depending on the nature and source of the health care continuation obligation) must pay the remaining 65% of the cost of the COBRA continuation coverage. The plan, employer, or carrier, as the case may be, recoups the subsidy, generally through the mechanism of a tax credit against employment taxes.
ARRA defines the term “assistance eligible individual” to mean any qualified beneficiary who elects COBRA continuation coverage and (i) whose loss of group health plan coverage is (or was) on account of an involuntary termination of employment other than by reason of gross misconduct; (ii) who is (or was) eligible for COBRA coverage during the period beginning Sept. 1, 2008 and ending Dec. 31, 2009; and (iii) who elects coverage in accordance with the requirements of COBRA and the DDAA.
Defining involuntary
The determination of whether a termination is “involuntary” is based on all the facts and circumstances. Initially, there was some confusion over what constituted an “involuntary termination.”
In Notice 2009-27, the IRS helpfully defined “involuntary termination” broadly as “a severance from employment due to the independent exercise of the unilateral authority of the employer to terminate the employment, other than due to the employee’s implicit or explicit request, where the employee was willing and able to continue performing services.”
Availability of and access to premium assistance is based on “periods of coverage.” Eligibility for the subsidy generally begins as of the “first period of coverage” during which a qualified beneficiary first satisfies the requirements of an assistance eligible individual.
An assistance eligible individual’s eligibility for COBRA premium assistance under the Act ceases 9 months after initial eligibility or, if earlier when the assistance eligible individual is eligible for coverage under another group health plan.
ARRA also provided special election periods for certain qualified beneficiaries who were eligible for a reduced premium but who had not elected COBRA continuation coverage as of Feb. 17, 2009. ARRA established certain notice requirements that were in addition to the general prior law COBRA notice requirements.
These included a “general” notice to be provided in connection with a qualifying event; an alternative notice for use by group health insurance issuers/carriers that offer group health insurance coverage under state mini-COBRA laws; and a specialized notice tailored to assistance eligible individuals. The COBRA premium subsidy under ARRA ended Dec. 31, 2009.
Not only did the involuntary termination have to occur before Dec. 31, 2009, but the assistance eligible individual also had to lose health coverage prior to that date. (Thus, an individual involuntarily terminated in December 2009 who did not lose coverage until Jan. 1, 2010 was ineligible.)
Extension of the COBRA subsidy
The DDAA affected ARRA’s COBRA subsidy in two key ways:
• The subsidy is now available for up to 15 months (a six-month extension from the original nine-month maximum coverage period).
• The subsidy is available for workers involuntarily terminated who lose coverage on or before Feb. 28, 2010 who elect COBRA (under ARRA, coverage had to be lost on or before Dec. 31, 2009).
Unlike prior law, under the DDAA, the loss of health coverage by the end date of the subsidy is no longer required. The DDAA determines eligibility for the subsidy based only on the date of the involuntary termination.
The new law requires that individuals who reached the end of the original premium reduction period must be provided with additional time to pay extension-related reduced premiums that were due prior to notice being provided.
The DDAA amendments establish a “transition period” for assistance eligible individuals with respect to any period of coverage beginning before Dec. 19, 2009 to which the subsidy extension applies. An individual’s “transition period” begins immediately after the end of the maximum number of months (generally nine) of premium reduction available under ARRA.
Individuals in a transition period must be provided notice of the extension within 60 days of the first day of their transition period. The notice must include information on the extension from nine to 15 months and the ability to make retroactive payments for certain unpaid reduced premiums.
An assistance eligible individual is deemed to have timely paid a COBRA premium for a transition period if he or she (i) had COBRA coverage for the period of coverage immediately prior to the transition period, and (ii) pays the premium by Feb. 17, 2010 or, if later, within 30 days of receipt of notice of the availability of the transition period.
Any assistance eligible individual who pays an unsubsidized COBRA premium during his or her transition period is entitled to either a reimbursement of the excess paid, or a credit towards future premiums.
There is a special rule for assistance eligible individuals whose eligibility for the premium reduction under ARRA expired, and who thereafter dropped coverage. These individuals are allowed to re-enroll and get the benefit of the additional six months of subsidy, provided they pay the 35% portion of the full premium.
Notice of the extension must be provided:
• By Feb. 17, 2010 to any individual who was an AEI or otherwise experiences a qualifying event relating to termination of employment on or after Oct. 31, 2009;
• As part of the standard COBRA election package, to any individual who experiences a qualifying event after Dec. 19, 2009;
• To any individual who did not timely pay his or her COBRA premium during a transition period, disclosing the ability to pay retroactive COBRA premiums and continue coverage, within the first 60 days of such transition period; and
• To any AEI who paid an unsubsidized COBRA premium during a transition period, disclosing his or her entitlement to either a reimbursement of the excess paid, or a credit towards future premiums.
The DDAA Notice requires that plans notify certain current and former participants and beneficiaries about its changes to the premium reduction rules. The U.S. Department of Labor has issued the following model notices to assist employers and plan sponsors in meeting the DDAA's notice requirements:
Updated General Notice
Plans subject to the Federal COBRA provisions must provide the updated General Notice to all qualified beneficiaries (not just covered employees) who experience a qualifying event at any time from Dec. 19, 2009 through Feb. 28, 2010, regardless of the type of qualifying event, and who have not yet been provided an election notice.
In addition, plan administrators must provide this notice no later than Feb. 17, 2010 to all qualified beneficiaries who experienced a termination of employment and lost coverage on or after Oct. 31, 2009 but were not eligible to begin COBRA until Jan. 1, 2010 or later, have already been provided a COBRA election notice that did not include information regarding the Act, and have not elected COBRA.
In addition, these individuals are entitled to an extended election period of 60 days from the date of the updated General Notice.
Premium Assistance Extension Notice
Plan administrators must provide this notice no later than Feb. 17, 2010 to all qualified beneficiaries who experienced a termination of employment and lost coverage on or after Oct. 31, 2009 and were eligible to begin COBRA prior to Jan. 1, 2010 and who have already been provided a COBRA election notice that did not include information regarding the Act.
Individuals who were assistance eligible individuals as of Oct. 31, 2009 (but who are not in a transition period) must be provided this notice no later than Feb. 17, 2010. Individuals who are in a transition period must be provided this notice within 60 days of the first day of the transition period.
Updated Alternative Notice
This notice is intended for insurance carriers that provide group health insurance coverage under State mini-COBRA laws. It must be provided to persons who are eligible for continuation coverage under a State law.
Alden J. Bianchi can be reached at ajbianchi@mintz.com.
Employee Benefit News Legal Alert is a free, weekly e-newsletter featuring articles from the nation’s leading benefits attorneys.
THIS WEEK'S UPDATE
IS FROM:
Mintz Levin
About the author
Alden J. Bianchi is the practice group leader of Mintz Levin’s employee benefits and executive compensation group.
Editor: Lydell C. Bridgeford
Editorial advisor: Frank Palmieri, Palmieri and Eisenberg
Editorial contributors: Alston & Bird LLP; Curran Tomko Tarski LLP; Groom Law Group, Chartered; Mintz Levin Cohn Ferris & Popeo, P.C.; Keightley & Ashner LLP and Sutherland, Asbill & Brenan.
by Alden J. Bianchi, Esq.
The American Recovery and Reinvestment Act of 2009 was signed on Feb.17, 2009 with the announced purpose of providing a massive economic stimulus to the U.S. economy.
ARRA also included temporary provisions requiring employers to provide federally subsidized premium assistance to certain former employees—referred to as “assistance eligible individuals”—who timely elect health care continuation or “COBRA” coverage.
Although ARRA’s temporary premium subsidies were originally set to expire at the end of 2009, they were extended by the Department of Defense Appropriations Act (DDAA), which was signed into law on Dec. 19, 2009.
This article describes the particulars of this extension, and it explains what employers must do to comply.
Background
Under the ARRA’s COBRA subsidized premium assistance rules, each “assistance eligible individual” is treated as having paid the full amount of the premiums for his or her COBRA continuation coverage for a period of up to nine months if he or she pays 35% of the premium.
The employer, plan, or carrier (depending on the nature and source of the health care continuation obligation) must pay the remaining 65% of the cost of the COBRA continuation coverage. The plan, employer, or carrier, as the case may be, recoups the subsidy, generally through the mechanism of a tax credit against employment taxes.
ARRA defines the term “assistance eligible individual” to mean any qualified beneficiary who elects COBRA continuation coverage and (i) whose loss of group health plan coverage is (or was) on account of an involuntary termination of employment other than by reason of gross misconduct; (ii) who is (or was) eligible for COBRA coverage during the period beginning Sept. 1, 2008 and ending Dec. 31, 2009; and (iii) who elects coverage in accordance with the requirements of COBRA and the DDAA.
Defining involuntary
The determination of whether a termination is “involuntary” is based on all the facts and circumstances. Initially, there was some confusion over what constituted an “involuntary termination.”
In Notice 2009-27, the IRS helpfully defined “involuntary termination” broadly as “a severance from employment due to the independent exercise of the unilateral authority of the employer to terminate the employment, other than due to the employee’s implicit or explicit request, where the employee was willing and able to continue performing services.”
Availability of and access to premium assistance is based on “periods of coverage.” Eligibility for the subsidy generally begins as of the “first period of coverage” during which a qualified beneficiary first satisfies the requirements of an assistance eligible individual.
An assistance eligible individual’s eligibility for COBRA premium assistance under the Act ceases 9 months after initial eligibility or, if earlier when the assistance eligible individual is eligible for coverage under another group health plan.
ARRA also provided special election periods for certain qualified beneficiaries who were eligible for a reduced premium but who had not elected COBRA continuation coverage as of Feb. 17, 2009. ARRA established certain notice requirements that were in addition to the general prior law COBRA notice requirements.
These included a “general” notice to be provided in connection with a qualifying event; an alternative notice for use by group health insurance issuers/carriers that offer group health insurance coverage under state mini-COBRA laws; and a specialized notice tailored to assistance eligible individuals. The COBRA premium subsidy under ARRA ended Dec. 31, 2009.
Not only did the involuntary termination have to occur before Dec. 31, 2009, but the assistance eligible individual also had to lose health coverage prior to that date. (Thus, an individual involuntarily terminated in December 2009 who did not lose coverage until Jan. 1, 2010 was ineligible.)
Extension of the COBRA subsidy
The DDAA affected ARRA’s COBRA subsidy in two key ways:
• The subsidy is now available for up to 15 months (a six-month extension from the original nine-month maximum coverage period).
• The subsidy is available for workers involuntarily terminated who lose coverage on or before Feb. 28, 2010 who elect COBRA (under ARRA, coverage had to be lost on or before Dec. 31, 2009).
Unlike prior law, under the DDAA, the loss of health coverage by the end date of the subsidy is no longer required. The DDAA determines eligibility for the subsidy based only on the date of the involuntary termination.
The new law requires that individuals who reached the end of the original premium reduction period must be provided with additional time to pay extension-related reduced premiums that were due prior to notice being provided.
The DDAA amendments establish a “transition period” for assistance eligible individuals with respect to any period of coverage beginning before Dec. 19, 2009 to which the subsidy extension applies. An individual’s “transition period” begins immediately after the end of the maximum number of months (generally nine) of premium reduction available under ARRA.
Individuals in a transition period must be provided notice of the extension within 60 days of the first day of their transition period. The notice must include information on the extension from nine to 15 months and the ability to make retroactive payments for certain unpaid reduced premiums.
An assistance eligible individual is deemed to have timely paid a COBRA premium for a transition period if he or she (i) had COBRA coverage for the period of coverage immediately prior to the transition period, and (ii) pays the premium by Feb. 17, 2010 or, if later, within 30 days of receipt of notice of the availability of the transition period.
Any assistance eligible individual who pays an unsubsidized COBRA premium during his or her transition period is entitled to either a reimbursement of the excess paid, or a credit towards future premiums.
There is a special rule for assistance eligible individuals whose eligibility for the premium reduction under ARRA expired, and who thereafter dropped coverage. These individuals are allowed to re-enroll and get the benefit of the additional six months of subsidy, provided they pay the 35% portion of the full premium.
Notice of the extension must be provided:
• By Feb. 17, 2010 to any individual who was an AEI or otherwise experiences a qualifying event relating to termination of employment on or after Oct. 31, 2009;
• As part of the standard COBRA election package, to any individual who experiences a qualifying event after Dec. 19, 2009;
• To any individual who did not timely pay his or her COBRA premium during a transition period, disclosing the ability to pay retroactive COBRA premiums and continue coverage, within the first 60 days of such transition period; and
• To any AEI who paid an unsubsidized COBRA premium during a transition period, disclosing his or her entitlement to either a reimbursement of the excess paid, or a credit towards future premiums.
The DDAA Notice requires that plans notify certain current and former participants and beneficiaries about its changes to the premium reduction rules. The U.S. Department of Labor has issued the following model notices to assist employers and plan sponsors in meeting the DDAA's notice requirements:
Updated General Notice
Plans subject to the Federal COBRA provisions must provide the updated General Notice to all qualified beneficiaries (not just covered employees) who experience a qualifying event at any time from Dec. 19, 2009 through Feb. 28, 2010, regardless of the type of qualifying event, and who have not yet been provided an election notice.
In addition, plan administrators must provide this notice no later than Feb. 17, 2010 to all qualified beneficiaries who experienced a termination of employment and lost coverage on or after Oct. 31, 2009 but were not eligible to begin COBRA until Jan. 1, 2010 or later, have already been provided a COBRA election notice that did not include information regarding the Act, and have not elected COBRA.
In addition, these individuals are entitled to an extended election period of 60 days from the date of the updated General Notice.
Premium Assistance Extension Notice
Plan administrators must provide this notice no later than Feb. 17, 2010 to all qualified beneficiaries who experienced a termination of employment and lost coverage on or after Oct. 31, 2009 and were eligible to begin COBRA prior to Jan. 1, 2010 and who have already been provided a COBRA election notice that did not include information regarding the Act.
Individuals who were assistance eligible individuals as of Oct. 31, 2009 (but who are not in a transition period) must be provided this notice no later than Feb. 17, 2010. Individuals who are in a transition period must be provided this notice within 60 days of the first day of the transition period.
Updated Alternative Notice
This notice is intended for insurance carriers that provide group health insurance coverage under State mini-COBRA laws. It must be provided to persons who are eligible for continuation coverage under a State law.
Alden J. Bianchi can be reached at ajbianchi@mintz.com.
Employee Benefit News Legal Alert is a free, weekly e-newsletter featuring articles from the nation’s leading benefits attorneys.
THIS WEEK'S UPDATE
IS FROM:
Mintz Levin
About the author
Alden J. Bianchi is the practice group leader of Mintz Levin’s employee benefits and executive compensation group.
Editor: Lydell C. Bridgeford
Editorial advisor: Frank Palmieri, Palmieri and Eisenberg
Editorial contributors: Alston & Bird LLP; Curran Tomko Tarski LLP; Groom Law Group, Chartered; Mintz Levin Cohn Ferris & Popeo, P.C.; Keightley & Ashner LLP and Sutherland, Asbill & Brenan.
Wednesday, February 10, 2010
Interim Final Regulations Issued for Mental Health Parity and Addiction Equity Act
The Department of the Treasury, Department of Labor, and the Department of Health and Human Services jointly issued interim final regulations on February 2, 2010, implementing the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEAA) replacing existing regulations in place for the Mental Health Parity Act of 1996.
Effective Date
These regulations generally apply to group health plans for plan years beginning on or after July 1, 2010 (i.e., beginning January 2011 for calendar year plans). The statutory provisions were effective for plan years beginning on or after October 3, 2009; however, the agencies will take into account efforts to comply with a reasonable interpretation of the statutory provisions until the Interim Regulations are effective.
General Information
The Interim regulations prohibit a plan or health insurer from applying any financial requirement or treatment limitation on mental health or substance abuse disorders that are more restrictive than the predominate financial requirement or treatment limitation imposed on substantially all medical/surgical benefits in the same “classification.”
These classifications segment services by network, venue, emergency treatment and prescription drugs, but do not define inpatient, outpatient or emergency care, as these terms differ by plan design and by State regulation. Nevertheless, a plan must apply these terms uniformly for both medical/surgical benefits and mental health/substance use disorder benefits. In addition, the requirements of the interim regulations are applied separately for each coverage unit (i.e. single EE + spouse, etc.).
Definitions
The interim regulations do not offer definitions of “mental health conditions” and “substance abuse disorders,” rather, this is left to each individual plan with the caveat that such definitions must be generally accepted in the relevant medical community.
It is important to remember that the interim regulations do not require a plan to provide any specific mental health or substance abuse disorder benefits. Moreover, providing benefits for one or more mental health conditions or substance abuse disorders does not require the provision of benefits for any other condition or disorder. However, if a plan provides benefits for a mental health condition or substance abuse disorder, benefits must be provided for that condition in each classification for which medical/surgical benefits are provided.
These guidelines have raised questions about certain types of procedures as to whether they are physical or mental health conditions. For example, a smoking cessation benefit could possibly fall into the category of a “substance abuse disorder” (e.g., nicotine dependency) under the interim regulations. A plan sponsor is well advised that if a particular condition falls in to a gray area, and there is substantial doubt as to whether it is physical or mental in nature, the plan should err on the side of conservatism and remove any benefit or financial limitations.
Further, for each benefit classification, there must be a comparison for each type of financial requirement or treatment limitation. For example, co-pay and annual visit limitations applicable to out-patient/in-network medical surgical benefits must be compared to co-pay and annual visit limitations applicable to out-patient/in-network mental health or substance abuse benefits.
Non-Quantitative Treatment Limits
The interim regulations, in addition to enumerating “quantitative” treatment limits (e.g. numerically based limits such as visit limitations), also contain certain “non-quantitative” treatment limits, (such as including medical management standards and requirements for using lower cost therapies before the plan will cover the more expensive therapies). As long as the factors used in applying the non-quantitative limits to mental health and substance use disorder benefits are comparable to, and applied no more stringently than, the factors used in applying to medical/surgical benefits, such criteria is deemed compliant.
Prescription Drugs
To the extent that a plan imposes different levels of financial arrangements on differing tiers of prescription drugs, the plan will satisfy the parity requirement with respect to the prescription drug classification of benefits if the financial requirements are based on reasonable factors (such as generic vs. brand name), determined in accordance with the non-quantitative treatment limitations, and without regard to whether a drug is generally prescribed for medical/surgical benefits or mental health/substance use disorder benefits.
MHPAEA Grab Bag For a plan to be deemed compliant , mental health/substance use disorder providers must be treated the same as primary care providers in terms of comparing financial/treatment limits within the six categories.
Employee Assistance Plans (EAPs) cannot be used as a gatekeeper (no major medical plan mental health benefits until you have exhausted EAP benefits), unless there is a similar exhaustion requirement for medical/surgical.
No cumulative limits may be applied separately to medical/surgical and mental health/substance abuse disorder benefits. For example, a plan cannot have a $1,000 deductible on medical/surgical benefits and a $1,000 deductible on mental health/substance abuse disorder benefits. Instead, a plan must establish a combined deductible for both.
Employers who employed at least 2 employees, but less than 50 employees on business days during the preceding calendar year, are exempt from these requirements. In this case, there is no distinction between full and part-time employees.
Plan providers are encouraged to review their current plan designs for noncompliant designs, and make changes accordingly.
Effective Date
These regulations generally apply to group health plans for plan years beginning on or after July 1, 2010 (i.e., beginning January 2011 for calendar year plans). The statutory provisions were effective for plan years beginning on or after October 3, 2009; however, the agencies will take into account efforts to comply with a reasonable interpretation of the statutory provisions until the Interim Regulations are effective.
General Information
The Interim regulations prohibit a plan or health insurer from applying any financial requirement or treatment limitation on mental health or substance abuse disorders that are more restrictive than the predominate financial requirement or treatment limitation imposed on substantially all medical/surgical benefits in the same “classification.”
These classifications segment services by network, venue, emergency treatment and prescription drugs, but do not define inpatient, outpatient or emergency care, as these terms differ by plan design and by State regulation. Nevertheless, a plan must apply these terms uniformly for both medical/surgical benefits and mental health/substance use disorder benefits. In addition, the requirements of the interim regulations are applied separately for each coverage unit (i.e. single EE + spouse, etc.).
Definitions
The interim regulations do not offer definitions of “mental health conditions” and “substance abuse disorders,” rather, this is left to each individual plan with the caveat that such definitions must be generally accepted in the relevant medical community.
It is important to remember that the interim regulations do not require a plan to provide any specific mental health or substance abuse disorder benefits. Moreover, providing benefits for one or more mental health conditions or substance abuse disorders does not require the provision of benefits for any other condition or disorder. However, if a plan provides benefits for a mental health condition or substance abuse disorder, benefits must be provided for that condition in each classification for which medical/surgical benefits are provided.
These guidelines have raised questions about certain types of procedures as to whether they are physical or mental health conditions. For example, a smoking cessation benefit could possibly fall into the category of a “substance abuse disorder” (e.g., nicotine dependency) under the interim regulations. A plan sponsor is well advised that if a particular condition falls in to a gray area, and there is substantial doubt as to whether it is physical or mental in nature, the plan should err on the side of conservatism and remove any benefit or financial limitations.
Further, for each benefit classification, there must be a comparison for each type of financial requirement or treatment limitation. For example, co-pay and annual visit limitations applicable to out-patient/in-network medical surgical benefits must be compared to co-pay and annual visit limitations applicable to out-patient/in-network mental health or substance abuse benefits.
Non-Quantitative Treatment Limits
The interim regulations, in addition to enumerating “quantitative” treatment limits (e.g. numerically based limits such as visit limitations), also contain certain “non-quantitative” treatment limits, (such as including medical management standards and requirements for using lower cost therapies before the plan will cover the more expensive therapies). As long as the factors used in applying the non-quantitative limits to mental health and substance use disorder benefits are comparable to, and applied no more stringently than, the factors used in applying to medical/surgical benefits, such criteria is deemed compliant.
Prescription Drugs
To the extent that a plan imposes different levels of financial arrangements on differing tiers of prescription drugs, the plan will satisfy the parity requirement with respect to the prescription drug classification of benefits if the financial requirements are based on reasonable factors (such as generic vs. brand name), determined in accordance with the non-quantitative treatment limitations, and without regard to whether a drug is generally prescribed for medical/surgical benefits or mental health/substance use disorder benefits.
MHPAEA Grab Bag For a plan to be deemed compliant , mental health/substance use disorder providers must be treated the same as primary care providers in terms of comparing financial/treatment limits within the six categories.
Employee Assistance Plans (EAPs) cannot be used as a gatekeeper (no major medical plan mental health benefits until you have exhausted EAP benefits), unless there is a similar exhaustion requirement for medical/surgical.
No cumulative limits may be applied separately to medical/surgical and mental health/substance abuse disorder benefits. For example, a plan cannot have a $1,000 deductible on medical/surgical benefits and a $1,000 deductible on mental health/substance abuse disorder benefits. Instead, a plan must establish a combined deductible for both.
Employers who employed at least 2 employees, but less than 50 employees on business days during the preceding calendar year, are exempt from these requirements. In this case, there is no distinction between full and part-time employees.
Plan providers are encouraged to review their current plan designs for noncompliant designs, and make changes accordingly.
Friday, February 5, 2010
Final Rules Released on Mental Health Parity Act
Federal agencies, including the Treasury Department, the Department of Labor and the Department of Health and Human Services, have issued final rules for providing parity to group health plan participants who receive treatment for mental health and substance abuse disorders. The interim final rules were published in the February 2, 2010 Federal Register and apply to plan years starting after June 30, 2010. The new rules will require many employers to make additional modifications to their medical plans.
The new rules provide employers and insurers with long-awaited clarification and guidance on complying with the Paul Wellstone and Pete Dominici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). Among the key clarifications provided in the new rules is a breakdown of benefits into six categories:
• Inpatient in network
• Inpatient out of network
• Outpatient in network
• Outpatient out of network
• Emergency care
• Prescription drugs
The rules require that mental health and/or substance abuse benefits provided in any one of these categories must be on par with other medical and surgical benefits in that category. The rules further clarify “parity” to mean that plans may not impose more restrictive financial requirements (e.g., deductibles, copayments, out-of-pocket maximums) or treatment limitations (e.g., number of visits) on mental health/substance abuse care than the predominant financial requirements and limitations imposed on other services in the same category.
When MHPAEA was first enacted in 2008, many employers removed specific day and visit limitations that applied only to mental health treatments. However, many have maintained separate deductibles and out-of-pocket maximums for these benefits. The new rules prohibit plans from including “separate but unequal deductibles and maximums,” which will require many employers to modify their plan designs.
Contact Cindy LaQuatra, RHU a Senior Consultant within the Health & Wellness department at BRG for assistance in reviewing your plan and ensuring it complies with the new rules. You can reach Cindy by phone at 216-393-1848 or by email at claquatra@benefitsrg.com.
The new rules provide employers and insurers with long-awaited clarification and guidance on complying with the Paul Wellstone and Pete Dominici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). Among the key clarifications provided in the new rules is a breakdown of benefits into six categories:
• Inpatient in network
• Inpatient out of network
• Outpatient in network
• Outpatient out of network
• Emergency care
• Prescription drugs
The rules require that mental health and/or substance abuse benefits provided in any one of these categories must be on par with other medical and surgical benefits in that category. The rules further clarify “parity” to mean that plans may not impose more restrictive financial requirements (e.g., deductibles, copayments, out-of-pocket maximums) or treatment limitations (e.g., number of visits) on mental health/substance abuse care than the predominant financial requirements and limitations imposed on other services in the same category.
When MHPAEA was first enacted in 2008, many employers removed specific day and visit limitations that applied only to mental health treatments. However, many have maintained separate deductibles and out-of-pocket maximums for these benefits. The new rules prohibit plans from including “separate but unequal deductibles and maximums,” which will require many employers to modify their plan designs.
Contact Cindy LaQuatra, RHU a Senior Consultant within the Health & Wellness department at BRG for assistance in reviewing your plan and ensuring it complies with the new rules. You can reach Cindy by phone at 216-393-1848 or by email at claquatra@benefitsrg.com.
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