New Rules not Prompting Employers to Drop Mental Health Benefits

March 3, 2010 (PLANSPONSOR.com) - Health care experts from Hewitt Associates, a global human resources consulting and outsourcing company, believe that despite the extra administrative and cost burden on U.S. employers, few companies will eliminate their existing mental health and substance abuse benefits as a result of new federal mental health parity regulations.

A recent Hewitt survey of 70 Fortune 500 employers that offer mental health benefits found none have eliminated mental health/substance abuse coverage since the Mental Parity Act was originally enacted in 2008. Instead, many took steps to comply with the initial legislation.

According to the survey, all companies have eliminated annual and lifetime maximums, and one in five (20%) have modified mental health/substance abuse precertification requirements or adjusted the diagnoses and services covered under the plan, such as eliminating or adding coverage for specific services or adding out-of-network coverage. Additionally, almost all employers (98%) have maintained their current administrative arrangement with their mental health/substance abuse vendors so far.

While most companies have stayed with a model where mental health/substance abuse benefits are administered by a specialty behavioral health vendor (i.e., carve-out plan), Hewitt said it believes more companies will switch to a plan where benefits are administered by the medical benefits vendor (i.e., carve-in plan) in the future.

The U.S. Departments of Labor, Health and Human Services (HHS), and the Treasury last month jointly issued new rules implement the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) prohibiting group health insurance plans from restricting access to care by limiting benefits and requiring higher patient costs than those that apply to general medical or surgical benefits (see Segal Discusses Employers' Next Steps for Mental Health Parity). The regulations, which take effect for plan years beginning on July 1, 2010, also say that an employee assistance program (EAP) cannot be used as a gatekeeper—where members are required to use the EAP before accessing mental health/substance abuse benefits—unless a similar program is required for medical/surgical benefits, Hewitt pointed out.