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New Pennsylvania Law Will Help Employers Ensure That Their Carriers Comply with Federal Mental Health Parity Requirements

Pennsylvania Governor Tom Wolf signed House bills 1439 and 1696 into law last week, both of which require health insurers in the state to assess each policy they offer and document how it complies with mental health and substance abuse parity requirements.

These two measures will help businesses that provide fully-insured coverage in the state, since any employer subject to the federal Mental Health Parity and Addiction Equity Act (MHPAEA) shares parity compliance liability with their health insurance carrier.

Health insurance carriers are always supposed to ensure that their major medical plan offerings comply with the federal MHPAEA, the Affordable Care Act's essential health benefit requirements, and any applicable state mental health laws. However, mistakes happen. Specifically, in Pennsylvania, the Insurance Department has revealed significant compliance concerns relating to mental health parity over the past few years through health insurance market conduct examinations. This trend was troubling for employers with fully-insured group health insurance contracts issued in the Commonwealth who rely on their insurance companies to meet their parity obligations.

The new law applies to health insurers that offer comprehensive health insurance coverage in Pennsylvania. These carriers must verify that they have completed and fully documented analyses of their efforts to provide mental health and substance-use disorder coverage comparable to physical health services for cost-sharing, in- and out-of-network coverage, and other treatment limits. In addition to the verified analyses, insurers must make that documentation available to the Insurance Department, upon request, to demonstrate compliance with the MHPAEA. Carriers must disclose MHPAEA compliance documentation to consumers and providers upon request, including to group policyholders.

Fully-insured Pennsylvania-based groups need to know about how these two measures should help eliminate any carrier-based mental health and substance abuse parity glitches from their health coverage offerings in the years ahead.

Employer group plans with 50 or more employees that include mental health services for either inpatient care, outpatient care, or prescription drugs as part of their medical plan are legally responsible for how their plan meets MHPAEA requirements. Clients who meet this criteria should request compliance documentation from their carrier as part of each renewal process. 

Reviewing all ERISA plan documents and claims procedures for parity compliance is also always a good idea.

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