On June 24, 2022, the United States Supreme Court released Dobbs v. Jackson Women's Health Organization, overturning Roe v. Wade. The Dobbs decision has employers scrambling to understand the impact on group health plan coverage. Many employers are considering implementing travel reimbursement options to assist employees who wish to seek abortions that might be restricted by the law in their home states. In a previous alert, we discussed restrictions imposed under the Mental Health Parity and Addiction Equity Act of 2008, as amended by the Affordable Care Act ("MHPAEA"), and how a travel reimbursement program offered under a group health plan that was limited to abortion services might run afoul of MHPAEA requirements.
In this post, we take a deeper dive into the MHPAEA requirements, its limited exceptions, how employers might be able to comply with those rules when making a travel benefit available, and provide a brief overview of how employers might prepare for an MHPAEA audit.
The MHPAEA applies to group health plans, group health insurance coverage, and individual health insurance coverage (collectively, "Health Plans"). The MHPAEA prohibits Health Plans from imposing higher financial requirements or stricter treatment limitations on mental health or substance use disorder ("MH/SUD") benefits as compared to medical and surgical benefits. The treatment limitations are evaluated on a quantitative and non-quantitative basis.
The quantitative rules apply mathematical tests to a plan's cost-sharing requirements and limits on the quantity of care. The non-quantitative treatment limitations ("NQTL") evaluate matters that cannot be assessed through numerical analysis. Some examples of non-quantitative treatment limitations that have recently been under scrutiny by the Department of Labor and the Department of Health and Human Services include:
- Preauthorization or precertification requirements;
- Network provider admissions standards;
- Concurrent care review; and
- Limitations on applied behavior analysis or treatment for autism spectrum disorder.
MHPAEA Has Limited Exceptions
There are two key exceptions to the MHPAEA for employers to consider:
- The MHPAEA does not apply directly to employers who employed an average of no more than 50 employees during the preceding calendar year. Certain related employers, including members of a controlled group or an affiliated service group, are treated as one employer, and a special rule applies for non-federal governmental plans.
- The MHPAEA does not require Health Plans to cover MH/SUD benefits. It merely requires that when the Health Plans choose to include MH/SUD benefits in their benefits packages, MH/SUD must be treated the same as medical and surgical benefits.
However, even if an exception from the MHPAEA applies, most group health plans are still subject to the federal mental health parity exigencies of the Affordable Care Act that requires coverage offered in individual and small group markets to provide essential health benefits, including certain mandated mental health and substance use disorder services. Thus, many small employers will be indirectly subject to the federal mental health parity requirements if they purchase a small group insured policy subject to the essential health benefits requirements.
Travel Benefits and the MHPAEA
For employers that sponsor a Health Plan subject to the MHPAEA and wish to offer travel benefits covering abortion, it is vital to consider the MHPAEA compliance requirements.
For example, assume an employer sponsors a Health Plan that covers MH/SUD services and is subject to the MHPAEA. The employer implements a travel benefit in the Health Plan that is limited to abortions if abortion services are unavailable within a minimum distance of 100 miles from the Health Plan participant's home. This design would likely violate the MHPAEA's quantitative limitations and NQTLs because the travel benefit is available for a medical/surgical benefit (abortion), but no similar travel benefit is available for MH/SUD services. To help ensure compliance with the MHPAEA, the employer may want to consider expanding the scope of travel benefits to MH/SUD services subject to the same conditions as the abortion, that is, the desired MH/SUD services are not available within a 100 miles of the participant's home.
Employers may also consider offering a travel benefit that is more neutrally available for both medical/surgical and MH/SUD services. Pending further developments in state law enforcement, such an arrangement may also attract less scrutiny for states that have aggressively enforced prohibitions on "aiding or abetting" abortion. For example, an employer might consider offering some of the following services to Health Plan participants subject to defined maximum allowed amounts and minimum travel distance requirements:
- Cancer treatment;
- Cardiac services;
- Gender-affirmation care;
- Maternity/reproductive healthcare services (e.g., prenatal, fertility treatment, etc.);
- Musculoskeletal procedures;
- Organ transplant;
- MH/SUD (included to help ensure MHPAEA compliance);
- Rare condition treatment; and
- Weight reduction/bariatric care.
Some insurers and claims administrators for self-insured plans have begun to roll out travel solutions for Health Plan sponsors. Some of these programs include reimbursements for travel and lodging expenses, mileage, airfare, and companion travel (if the companion's presence is necessary for the participant to receive health services). Self-insured Health Plans, in particular, will have significant flexibility in designing a travel benefit that meets participant healthcare needs and is MHPAEA compliant.
Being Prepared for an MHPAEA Audit
Lack of compliance with MHPAEA is typically uncovered through a Department of Labor audit or a whistleblower. Penalties for failing to comply with MHPAEA may result in civil enforcement and a $100 penalty per day per each affected individual. Enforcement of MHPAEA has ramped up in recent years.
The main issue is the difficulty in comparing quantitative limitations and NQTLs for MH/SUD, and medical/surgical benefits. To address this issue, Congress passed provisions in the Consolidated Appropriations Act of 2021, which require Health Plans to submit comparative analyses to the Department of Health and Human Services, the Department of Labor, or a respective state authority upon request (the "MHPAEA Audit"). Earlier this year, a report to Congress detailed that in the MHPAEA Audits that had been done thus far, none of the Health Plans provided the necessary information to complete the MHPAEA Audit. In order to be prepared for an MHPAEA Audit, Health Plans should have certain information prepared. Some examples of what must be prepared include, but are not limited to:
- Any information Health Plans may have on any NQTLs that apply to both MH/SUD benefits as well as medical and surgical benefits.
- Records documenting NQTL processes and how the NQTLs are being applied to both medical/surgical and MH/SUD benefits.
- Any documentation, including any guidelines, claims processing policies and procedures, or other standards that the plan or issuer has relied upon as the basis for determining its compliance with the requirement that any NQTL applicable to MH/SUD benefits be comparable to and applied no more stringently than the NQTL as applied to medical/surgical benefits.
- Samples of covered and denied MH/SUD and medical/surgical benefit claims.
- Documents related to MHPAEA compliance with respect to service providers (if a plan delegates management of MH/SUD benefits to another entity).
- Any applicable MHPAEA testing completed by the plan, the issuer for financial requirements or NQTLs applied to MH/SUD benefits.
Scrutiny from the Department of Labor around MHPAEA is increasing. Therefore, there are risks for employers in ignoring MHPAEA compliance as a part of any group health plan design, but in particular for a travel benefit that might apply to abortion or any other medical/surgical benefits but exclude MH/SUD benefits.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.