Those of you with no legal background, brace yourselves for this opening line: The Employee Benefits Security Administration (EBSA) – which is housed within the Department of Labor and oversees ERISA – through their Office of Health Plan Standards and Compliance Assistance, states that Parity will be subject to the “anti-abuse” proposed rule – 29 C.F.R. Section 2590.732(a)(2) (69 Fed. Reg. 68,800), that was issued in 2004, under HIPAA. Ouch! Still reading? Good.
What That Means
It’s good news and it provides clarification. The proposed rule states that all employer-sponsored medical benefits (including those made possible by employee organizations, trusts and associations) are considered to be a single group health plan. Under the anti-abuse rule, separate and seemingly distinct plans (like a behavioral health carve-out) must be aggregated “to the extent necessary” to prevent employers and other payers from attempting to evade the law and/or any legal requirements under the law.
Practically speaking that means that an employer cannot separate or “divorce” mental health and substance abuse coverage from their medical and surgical plan in the hopes of obviating compliance with the Parity law. If you offer a medical plan and you offer coverage for mental health and substance abuse treatment, then you must comply. A carve-out is only an outsourcing of functions and financial risk. It in no way implies or means that the law’s requirements can be avoided.
It’s a small victory but one worth noting. Some of you may remember an earlier post wherein we discussed the lawyer/consultant in the West advising ERISA groups to simply “carve it out and wait till they catch you later”. Perhaps now, every employer can find appropriate advice and direction. Parity is verifiably affordable and there are many reasonable ways to comply. It’s good for people and it’s good for business. Anyone who has ever run a large business knows what the real cost of untreated behavioral health issues can be.