DOL Proposes to Update Its Mental Health Parity Compliance Tool

June 26, 2020

The Department of Labor announced proposed changes to the self-compliance tool employers use for evaluating compliance with the Mental Health Parity and Addiction Equity Act (MHPAEA), which could, if finalized, have a significant impact during DOL audits and litigation.

MHPAEA generally requires that the treatment limitations imposed by an employer health plan on mental health and substance use disorder benefits cannot be more restrictive than the predominant financial requirements and limitations that apply to substantially all medical and surgical benefits.

The Self-Compliance Tool is intended to help employers determine if their health plan or health insurance issuer is in compliance with MHPAEA and its implementing regulations.

According to the proposed update, an “effective” internal compliance plan would include:

  • Internal monitoring and regular compliance reviews, including audits of final benefit denials; and

  • Training and education for individuals responsible for MHPAEA compliance. 

Employers should also be prepared to provide to DOL during an audit:

  • Information on the nonquantitative treatment limitations (NQTL) that apply to mental health and medical/surgical benefits;

  • Records concerning NQTL processes and the application of NQTLs to both mental health and medical/surgical benefits; and
  • Documentation that the plan or insurer relied on in determining if any NQTLs were not being applied more stringently to mental health benefits, including any internal testing or reviews performed by the plan or insurer.

Takeaway:  DOL's proposed update underscores the growing importance of mental health benefit parity compliance, which has increasingly become the subject of litigation—especially challenges to nonquantitative treatment limitations in employer plans.  Moreover, requests for a plan's internal MHPAEA compliance procedures may become part of DOL audits or litigation discovery requests in the future and employers should plan accordingly.  The American Health Policy Institute will be submitting comments on the proposal.

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