Health insurance companies are now in the crosshairs of the Department of Labor’s aggressive enforcement of mental health parity, but it’s unlikely to mean employers will escape scrutiny.
In what appeared to be a first for the department, it initiated litigation last month against an insurer to ensure health plans offering mental health and substance use disorder benefits are covering treatments at the same level as physical or surgical health care.
Although the action, which was quickly settled, signaled a significant shift in the policing of parity, benefits attorneys say employers aren’t off the hook. …
The UnitedHealthcare settlement was the culmination of long-term negotiations with Labor for conduct that occurred prior to passage of the 2021 Consolidated Appropriations Act, which mandates that the department investigate employers for mental health parity compliance, said Kevin Malone, senior counsel at Epstein Becker & Green P.C.
The Labor Department reported its Employee Benefits Security Administration investigated and closed 180 health plan investigations in 2020, and 3,938 health plan investigations since 2011. All of the investigations described in the enforcement report were employers or other group health plan sponsors, and many were expanded to include insurers and third-party administrators, Malone noted.
The Consolidated Appropriations Act also amended the 2008 Mental Health Parity and Addiction Equity Act to require group health plans and issuers to complete an analysis that explains whether the factors used to justify non-quantitative treatment limits for mental health coverage differ from limits imposed for medical and surgical benefits.
The Labor, Health and Human Services, and Treasury departments released a list of frequently asked questions in April to clarify what the analysis must include, how it will be evaluated, and what steps will be taken if a plan is found to be noncompliant. Any group health plan or issuer found not in compliance will be named in a report to Congress.
The Labor Department will “very likely” begin publicly naming plans, “probably multiple” plans that aren’t in compliance with the mental health parity law, Malone said.
“Based on their actions with the United settlement, and based on the posture that they’ve taken, I think that they will need to make some examples of people,” he said.
Attorneys, however, say there’s still confusion over what the report is supposed to look like, and some employers are having problems getting the information they need for the analysis from their plan administrators. …
Malone thinks the UnitedHealthcare settlement shows the Labor Department is at least aware that administrators hold crucial information.
“That, I think, is a good sign for the employers,” he said. “It’s clear that in a situation where there’s pervasive practices across employers by a single administrator, the DOL is going to be directing most of their punitive ire at that administrator.”
Current Labor investigations do acknowledge the administrator has the information—but that’s not stopping the department from “really turning up the temperature on employers anyway,” Malone said.