New Rules not Prompting Employers to Drop Mental Health Benefits

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health benefits found none have eliminated mental health/substance abuse coverage since the Mental Parity Act was originally enacted in 2008.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.

What Employers Should Do 

In response to new mental health parity rules, Hewitt recommends that all employers review their mental health/substance abuse benefits programs - even those employers that already made changes to comply with the initial legislation.

In addition, the firm recommends an in-depth comparison of mental health/substance abuse and medical/surgical benefits to ensure compliance with the new regulations, including:

• A thorough cost analysis to ensure that mental health/substance abuse and medical benefits comply with MHPAEA regulations and to assess the financial impact of any changes;
• A review of plan documentation, medical management standards, financial requirements, and treatment limitations to determine compliance;
• A detailed review of the conditions and treatment settings currently covered under the plan; and
• An evaluation of the organization’s overall behavioral health strategy in light of MHPAEA, including:
  • Ways to use an EAP to help offset some of the cost of design changes;
  • Methods for monitoring program utilization and vendor effectiveness after implementing plan changes;
  • Ensuring mental health benefits vendors are doing all they can to provide appropriate treatment, while also making sure employees are getting the care they need; and
  • Assessing holistic strategies that focus on encouraging employees to take an active role in their own health care, leading to improved physical and mental health.