By: Allison N. Genard, Esq.
Published on: Mon 7th Oct, 2024 By: Campbell Durrant, P.C.
On September 9, 2024, the U.S. Departments of Labor, Human and Health Services, and Treasury released final rules under the Mental Health Parity and Addiction Equity Act. The new rules are part of the Biden Administration’s goals to improve mental health and substance use treatment access and reduce the barriers to treatment. These final rules come at a time when many public employers have been exploring ways to increase participation in mental health services and substance use treatment to avoid burnout and improve employee retention. While many employers provide Employee Assistance Programs, insurance coverage can still be an impediment to seeking ongoing treatment. The new rules seek to remove some of those obstacles and improve health care coverage for mental health and substance use treatment.
The final rules are meant to ensure that individuals in group health plans or group or individual health insurance coverage do not face greater burdens to access benefits for mental health and substance use than they would face seeking coverage for treatment of a medical condition or surgical procedure. The U.S. Department of Labor has issued a Fact Sheet explaining the main purposes of the final rules, the requirements for nonquantitative treatment limitations, and other intended benefits of the rule.
Most importantly, the final rules prohibit health plans and issuers from using more restrictive nonquantitative treatment limitations for mental health and substance use treatment versus more traditional medical and surgical treatments. Examples of nonquantitative treatment limitations include prior authorization requirements and other medical management techniques, standards related to network composition, and methodologies to determine out-of-network reimbursement rates. The Departments considered comments and feedback from the proposed rules to target on the nonquantitative treatment limitations that appeared to most impact access to mental health and substance use treatment to formulate the final rules.
The final rules generally apply to group health plans and group health insurance coverage the first day of the first plan year beginning on or after January 1, 2025. The final rules apply to health insurance issuers offering individual health insurance coverage for policy years beginning on or after January 1, 2026.
Employers should be monitoring potential changes to their health care plans regarding mental health and substance use treatment coverage. The hope is that coverage for these treatments will improve and provide greater benefits to plan participants. Those changes should then be conveyed to the employees to provide them with the best information regarding treatment and hopefully improve participation in these types of treatment and reduce financial and access barriers. An important note for employers, though, is that the rules do not mandate that an employer offer mental health coverage to employees. Employers should also be prepared for the impact of the rules on plan costs. The ERISA Industry Committee is already pushing back on the new rules, stating that it could push health care coverage costs even higher and impact plan costs. These impacts will need to be considered as employers evaluate the impact on collective bargaining and budgets for 2025 and beyond.
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