Implementation of the mental health parity law is proving to be another huge headache for employers. The law requires that benefits provided by employers for the treatment of mental illnesses and substance abuse be on a par with other medical and surgical benefits. The effective date is Jan. 1 for health plans on a calendar year, but the agencies in charge of writing the implementation rules have yet to produce them. “There are a lot of open questions and no guidance from the government,” says Kaye Pestaina of The Segal Company.
One key question is whether it’s OK to have separate deductibles. Employer groups say the law does allow that, and lacking contrary guidance, many companies are deciding to go that route. Employers that use a different vendor for mental health benefits than for other health benefits say separate deductibles are a must because of coordination problems. “A single deductible would result in a substantial and costly administrative burden to the plan,” say the American Benefits Council and the U.S. Chamber of Commerce in a letter to the Department of Labor.
But congressional supporters of the legislation wrote in a recent letter to regulators that “separate but equal” is not parity. They said it’s discriminatory and “should be prohibited.”
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Copays are also an issue. Many plans have higher copays for specialists than for primary care doctors, and they want to use the higher ones for mental illnesses, regardless of the provider’s credentials. “Group health plans should be permitted to classify all mental health providers as specialists and apply the plan’s specialist co-pay to such providers,” say the council and the Chamber in their letter.
Another ambiguous issue involves the scope of services. Employers want confirmation that it’s up to the plan sponsor to determine what’s a covered benefit and what isn’t. Just as employers can decide not to cover certain medical services, such as chiropractic care or fertility treatments, they must be able to do the same in the area of mental health, they say. But in their letter to regulators, lawmakers asserted that the law intended that patients have access “to the full scope of services, medically appropriate for their condition.”
Employers can seek a one-year exemption from the parity law if their costs go up by 2% or more in 2010 or at least 1% in subsequent years. Employer groups have asked regulators to allow firms that qualify for an exemption one year to have an actuary make a forecast of costs for subsequent years.
Regulators are expected to go easy on enforcement the first year, especially since no guidance was available for employers as they were making decisions on how to comply with the law. As long as employers make a good faith effort to comply, regulators won’t take enforcement action against them.
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