Mental Health Parity Financial Requirements and Quantitative Treatment Limitations; Employee Assistance Plans

MHPAEA

MHPAEA requires that the financial requirements (such as coinsurance and copays) and quantitative treatment limits (such as visit limits) imposed on mental health or substance use disorder (MH/SUD) benefits cannot be more restrictive than the predominant financial requirements and treatment limitations that apply to substantially all medical/surgical benefits in a particular benefit classification. During the public health emergency period, group health plans and health insurance issuers were permitted to ignore certain items and services related to testing for the detection of SARS-CoV-2, the virus that causes COVID-19, when performing the “substantially all” and “predominant” tests. Absent this relief, the costs of covering COVID-19 testing items and services without cost-sharing would be the amounts allocated to medical/surgical benefits, thereby putting group health plans and health insurance issuers at risk of running afoul of MHPAEA quantitative treatment limits.

From and after the end of the PHE, group health plans and health insurance issuers must include the cost of covering COVID-19 tests, either diagnostic or over-the-counter, or testing-related services, when calculating MHPAEA quantitative treatment limits.

Action Items: Employers should revisit their MHPAEA compliance testing to ensure that the coverage of COVID-19 tests is properly accounted for in applying the relevant quantitative treatment limits. There is, however, no longer a requirement that a group health plan or health insurance issuer cover these services without charge.

EMPLOYEE ASSISTANCE PLANS

The end of the NE and the PHE could have various impacts on EAPs depending on the specific plan design. Employers may, for example, see a spike in the need for mental health support that could be met through EAP services. While the pandemic may be winding down, the mental health impacts of the past three years may continue for many employees. Employers may need to continue to offer mental health services and resources through their EAPs, and potentially explore expanding mental health services through an EAP or otherwise, to support employees who are struggling with anxiety, depression or other mental health issues related to the pandemic.

Particular attention is required in the case of excepted benefits EAPs. Excepted benefit EAPs do not provide minimum essential coverage for Affordable Care Act (ACA) purposes. This means that coverage under an excepted benefit EAP does not disqualify a participant from qualifying for a premium tax credit from an ACA state healthcare exchange. To qualify as an excepted benefit EAP, an EAP must not provide benefits that are significant in the nature of medical care. During the NE and the PHE, the tri-agencies (US Departments of Labor, Health and Human Services, and Treasury) clarified that an excepted benefit EAP will not be considered to provide benefits that are significant in the nature of medical care solely because it offers benefits for diagnosis and testing for COVID-19 while a public health emergency declaration or a national emergency declaration is in effect.

Action Items: Plan sponsors should evaluate their EAPs to determine whether any benefits added to provide coverage for COVID-19 diagnosis and testing must now be removed from the EAP as a result of the end of the NE and PHE. More broadly, it will also be important for employers to stay tuned to the changing needs of their employees and consider any adjustments to their EAP offerings as the pandemic continues to evolve.

For any questions regarding the end of the PHE and/or NE, please contact your regular McDermott lawyer or one of the authors.