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.”
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
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.
For weekly updates on topics to improve your business decisionmaking, click here.
-
Why Walmart Stock's a Buy After Its Beat-And-Raise QuarterWalmart is the best Dow Jones stock Tuesday after the retail giant's solid earnings report and outlook and Wall Street thinks it's just getting started. Here's what they're saying.
-
Premium Tax Credit: Are You Eligible For This Health Insurance Tax Break?Tax Credits The tax credit can help qualifying individuals pay for coverage from the Affordable Care Act’s health insurance marketplace.
-
Kiplinger Outlook: Telecom Companies Brace for Tough TimesThe Letter The telecom industry is entering a new era that threatens profitability. But the coming Trump administration will make it easier for the major players to adjust.
-
Start-ups Trying to (Profitably) Solve the World’s Hardest ProblemsThe Letter More investors are interested in companies working on breakthrough science to tackle huge societal challenges. The field of deep tech has major tailwinds, too.
-
Will lower mortgage rates bring relief to the housing market?The Kiplinger Letter As mortgage rates slowly come down here's what to expect in the housing market over the next year or so.
-
The Big Questions for AR’s FutureThe Letter As Meta shows off a flashy AR prototype, Microsoft quietly stops supporting its own AR headset. The two companies highlight the promise and peril of AR.
-
China's Economy Faces Darkening OutlookThe Letter What the slowdown in China means for U.S. businesses.
-
AI Start-ups Keep Scoring Huge SumsThe Kiplinger Letter Investors continue to make bigger bets on artificial intelligence start-ups, even for small teams with no revenue. Some backers think a startling tech breakthrough is near.
-
Should We Worry About the Slowing U.S. EconomyThe Letter With the labor market cooling off and financial markets turning jittery, just how healthy is the economy right now?
-
New Phones Get All the Hype, but Consumers Still Love Old Models
The Letter Even as flashy artificial intelligence features drive sales of new smartphones, used phones continue to fetch big bucks as demand outstrips supply.
