Fair Insurance Coverage for Mental Health and Substance Use Disorder Care

What is Mental Health Parity?

Mental health parity addresses legacy issues associated with disparities in health insurance coverage for mental health and substance use disorder care when compared with coverage for medical and surgical care. In response to these disparities, the federal government and states enacted laws to protect people who need care for mental health and substance use conditions by ending discriminatory practices in health plan benefit coverage.

How does Mental Health Parity Impact the Workplace?

Common mental health conditions, like depression and anxiety, can be costly to employers especially when people are unable to access care. Ensuring that people with mental health and substance use conditions have access to timely, effective, and affordable care has become a high priority for employers. They see ending discriminatory practices in benefit coverage as the right thing to do and as a business imperative because of the high costs associated with untreated mental health conditions, impacting performance, productivity, retention, overall healthcare costs, and rising disability rates.

Employers report hearing from employees about tremendous challenges they face in accessing care, including

• Finding in-network psychiatrists and other mental health provider;
• Lengthy wait times for appointments;
• Restrictive utilization review and prior authorization criteria that lead to coverage denials, and
• The inability to pay high out-of-pocket costs for care

Here are some of the work-related costs associated with depression, anxiety and other mental health conditions:

• Depression and anxiety have a significant economic impact; the estimated annual cost to the global economy is $1 trillion in lost productivity.¹
• Depression is estimated to cause 200 million lost workdays in the U.S. each year at a cost to employers of $17 to $44 billion.²
• In 2019, about 51.5 million or 20% of U.S. adults experienced a mental health condition and of those less than half (44.8%) received mental health services.³
• Research suggests that 80% of patients with depression will improve with treatment.²
• Presenteeism – being present but not fully engaged because of a mental health condition – is on the rise and costly to employers.⁴
• A co-occurring mental health condition with other chronic conditions like asthma, diabetes, hypertension, and kidney disease results in a 2 to 3x higher cost of care for treating the underlying chronic condition.⁵

Tips for Employers on Mental Health Parity Compliance

Federal and state regulatory agencies are stepping up enforcement action due to ongoing lack of compliance with mental health parity laws and regulations.^6,7 This impacts employers in new ways.

In December 2020, Congress enacted the Consolidated Appropriations Act (CAA) that included enhanced mental health parity requirements under the federal Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). The newly enacted provisions require employer health plans and insurers to perform comparative analyses to ensure compliance with the non-quantitative treatment limits (NQTLs) for mental health and substance use disorder benefits.

Under that legislation, the U.S. Department of Labor (DOL) is required to request and analyze comparative analyses to ensure parity compliance. DOL recently released an updated DOL online self-compliance tool to provide guidance to employers on steps to be taken to ensure compliance with the federal parity law.

To minimize risk and ensure mental health parity compliance, health insurers and issuers should conduct a good faith assessment of health plan delivery, especially of non-quantifiable treatment limitations (NQTLs). According to the DOL issued guidance, those that have “carefully applied” the guidance in the self-compliance tool are well-positioned to meet the CAA’s standards for the comparative analysis.

Here are some of the issues DOL will focus on in reviewing comparative analyses provided by employer health plans and insurers:

• Prior authorization requirements for in-network and out-of-network inpatient services;
• Standards for provider admission to participate in a health plan network, including reimbursement rates; and
• Out-of-network reimbursement rates (plan methods for determining usual, customary, and reasonable charges).

If a health plan or plan issuer is found to have a non-compliant comparative analysis, DOL will require the plan or issuer to take corrective action to fix the violation or be required to notify all enrollees that it does not comply with parity laws. States where the group health plan is located, or the issuer is licensed to do business will also be notified of the non-compliance. DOL will be annually reporting to Congress and the public on the plans or issuers that were found to be non-compliant.

In addition, State Insurance Commissioners are also investigating health plan compliance with mental health parity laws for enforcement purposes. The CAA federal legislation gives states the authority to ask for the required comparative analyses and requires it to be made available upon request.

There is clearly a compelling case for employers to engage more directly with health plans and third-party administrators to ensure ongoing mental health parity compliance.

Resources

Learn more about mental health parity with the below resources:

• American Psychiatric Association Parity Resources
• Department of Labor's Self-Compliance Tool for the Mental Health Parity and Addiction Equity Act (.pdf)
• Department of Labor's FAQs about Mental Health And Substance Use Disorder Parity Implementation and the Consolidated Appropriations Act, 2021 Part 45 (.pdf)

Last Update: July 2021