The Department of Labor is targeting enforcement of mental health and substance use disorder laws. It recently issued guidance to help health plans comply with the Mental Health Parity and Addiction Equity Act, including proposed FAQs, a self-compliance tool, and a participant request form. The DOL conducted over 1,700 investigations since 2010 and found over 300 violations of parity laws.

1. Monthly Health Care Reform Update
DEPARTMENT OF LABOR TARGETS ENFORCEMENT OF MENTAL HEALTH AND
SUBSTANCE USE DISORDER LAWS
This update is part of a Brown & Brown series summarizing new guidance issued in connection
with the Patient Protection and Affordable Care Act (also known as the ACA or Health Care
Reform). We are joining forces with our business partner, the law firm of Miller Johnson, to
provide these updates to you. For this edition of the Monthly Update, we focus on the Department
of Labor’s (the “DOL”) continued efforts to enforce compliance with the Mental Health Parity and
Addiction Equity Act (the “MHPAEA”).
According to the Substance Abuse and Mental Health Services Administration, one-in-five
Americans had a diagnosable mental illness in 2016. In one quarter of those Americans, the mental
illness was severe enough to interfere with the individual’s daily activities. Combine these
statistics with the opioid crisis facing many communities, and it is easy to understand why the
DOL is focusing its efforts on mental health and substance use disorders.
Highlights
The DOL recently issued an abundance of guidance that should assist group health plan sponsors
comply with the MHPAEA, including:
• Proposed frequently asked questions (“FAQs”).
• A self-compliance tool. Plan sponsors can use this tool to gain a better understanding of
whether their group health plans comply with the MHPAEA and, if not, identify areas of
non-compliance.
• A draft template form that participants in group health plans may use to request additional
information regarding the participant’s access to mental health and substance use disorder
benefits under the plan.
• Reports summarizing the DOL’s past and current enforcement efforts with respect to the
MHPAEA.
Additionally, the Department of Health and Human Services (“HHS”) issued an “Action Plan for
Enhanced Enforcement of Mental Health and Substance Use Disorder Coverage.”

2. Background
In 1996, Congress enacted the Mental Health Parity Act of 1996 (“MHPA”). The MHPA required
parity in aggregate lifetime and annual dollar limits for medical/surgical benefits, and mental
health benefits. The DOL, along with the Internal Revenue Service (the “Service”) and HHS,
issued interim regulations implementing the MHPA in 1997, and interim final regulations in 2010.
Congress enacted the MHPAEA in 2008, which revised some of the MHPA provisions and
provided additional requirements, including parity for substance use disorder benefits. The DOL,
IRS and HHS (collectively, the “Departments”) issued final regulations under the MHPAEA in
2013.
Finally, Congress passed the 21st
Century Cures Act in 2016, which required the Departments to
issue additional guidance regarding compliance with the MHPAEA.
MHPAEA Requirements
OVERVIEW
Parity Requirements
The MHPAEA does not require group health plans to provide coverage for mental health (“MH”)
or substance use disorder (“SUD”) benefits. But, if a plan does provide coverage of MH or SUD
benefits, it must do so in parity with any medical/surgical benefits in the following respects:
• Annual or Lifetime Dollar Limits. If a group health plan does not impose an annual or
lifetime dollar limit on at least one-third of all of its medical/surgical benefits, it is not
permitted to impose an annual or lifetime dollar limit on MH/SUD benefits.
If a group health plan satisfies this one-third requirement, it may impose an annual or
lifetime dollar limit on MH/SUD benefits that is not less than the average annual or lifetime
dollar limit on medical/surgical benefits.
If a group health plan applies an annual or lifetime dollar limit on at least two-thirds of its
medical/surgical benefits, the plan may either:
• Subject both the medical/surgical benefits and MH/SUD to the same annual or
lifetime dollar limits; or
• Impose an annual or lifetime dollar limit on MH/SUD benefits that is not less than
the annual or lifetime dollar limit imposed on medical/surgical benefits.
NOTE. The ACA prohibits annual or lifetime dollar limits on any “essential health
benefit.” As a practical matter, the ACA’s prohibition on annual or lifetime dollar limits
on essential health benefits may make it difficult, if not impossible, to achieve the one-
third threshold. As a result, group health plans generally cannot impose any annual or
lifetime dollar limits on MH/SUD benefits.
• Financial Requirements and Quantitative Treatment Limitations. A “financial
requirement” includes deductibles, copayments, coinsurance, and out-of-pocket expenses.

3. A quantitative treatment limitation (“QTL”) includes limits on frequency of treatment, the
number of visits, days of coverage, etc.
A financial requirement or QTL can only be applied to a MH/SUD benefit, if the financial
requirement or QTL is applied to “substantially all” (2/3rds
) of all medical/surgical benefits.
For financial requirements or QTLs that satisfy this substantially all threshold and contain
more than one level, the level that may be applied to MH/SUD benefits cannot be more
restrictive than the financial requirement or QTL that applies to the “predominate level”
(½) of the medical/surgical benefits. A “level” is the magnitude of the financial
requirement or QTL. For example, a $25 and $50 copayment are two “levels” of
copayment (a financial requirement). Similarly, a 21-day and 30-day limit are two levels
of a frequency limit (a QTL). (There is a special rule used to identify the predominate level
if no single level applies to at least ½ of the medical/surgical benefits.)
EXAMPLE. If a plan imposes deductibles, copayments and coinsurance, but only the
coinsurance requirement applies to at least 2/3rds
of the medical/surgical benefits, the plan
can only impose the coinsurance requirement on MH/SUD benefits.
Further, if the plan imposes both a 20% and 30% coinsurance requirement, but only the
20% applies to at least one-half of the medical surgical benefits, the plan may only impose
the 20% coinsurance requirement on MH/SUD benefits.
NOTE. When calculating the “substantially all” and “predominate level” thresholds, the
DOL clarified that the plan’s expected claims data must be used, unless there is insufficient
reliable claims data for the plan. It is not appropriate to use expected claims data across an
insurer’s or third party administrator’s (“TPA”) entire book of business. This means that
testing a plan’s financial requirements and QTLs for compliance with the MHPAEA will
likely require involvement by the plan’s insurer or TPA.
Finally, separate cumulative financial requirements or cumulative QTLs on MH/SUD
benefits (e.g., separate deductibles for medical/surgical benefits, and MH/SUD benefits) is
not permissible, even if such limitations on MH/SUD benefits are equal to (or more
favorable than) the limitations on medical/surgical benefits.
• Nonquantitative Treatment Limitations. Under the terms of a group health plan (both as
written and as operated), any processes, strategies, evidentiary standards, or other factors
used to apply a nonquantitative treatment limitation (“NQTL”) to MH/SUD benefits must
be comparable to (and applied no more stringently than) the processes, strategies,
evidentiary standards, or other factors used in applying the NQTL to medical/surgical
benefits.
Unlike the analysis that applies to financial requirements and QTLs (which is a
mathematical-based test), the analysis of NQTLs is a facts-and-circumstances based
analysis. The DOL has provided examples of some NQTLs that may be problematic under
the MHPAEA, such as: (1) medical management standards; (2) formulary design; (3)
provider standards for network admission; (4) method for determining usual, customary
and reasonable reimbursement (“UCR”) rates; (5) fail-first policies/step-therapy protocols;
(6) preauthorization requirements; and (7) restrictions based on geography, facility type,
provider specialty, etc.

4. As you can see, some of a plan’s NQTLs may be outside of the plan sponsor’s control (e.g.,
provider standards for network admission, UCR reimbursements rates, etc.). As a result, a
proper analysis of the plan’s NQTLs will also require the involvement of a plan’s insurer
or TPA.
Classifications
When testing financial requirements, QTLs, and NQTLs for compliance with the MHPAEA, a
group health plan’s benefits must be divided into the following six classifications:
• Inpatient, in-network benefits;
• Inpatient, out-of-network benefits;
• Outpatient, in-network benefits;
• Outpatient, out-of-network benefits;
• Emergency care; and
• Prescription drugs.
NOTE. Both outpatient classifications may be further classified into separate sub-classifications
for: (1) office visits; and (2) all other outpatient items or services. Further, it may also be possible
to further classify multiple tiers of network providers and multiple tiers of prescription drugs into
separate sub-classifications, if certain conditions are met.
The parity requirements that apply to financial requirements, QTLs and NQTLs only apply within
these classifications (and sub-classifications), not across all of the plan’s benefits.
Recent DOL Guidance
The DOL’s most recent MHPAEA guidance, which is further explained below, is available (along
with previously issued guidance) at: https://www.dol.gov/agencies/ebsa.
FAQs
Here is a summary of the guidance provided by the FAQs:
Guidance related to NQTLs
• A plan may not deny treatment for a MH/SUD condition as “experimental or
investigative,” if the treatment satisfies the same requirements that, if satisfied by a
treatment for a medical/surgical condition, would be approved by the plan.
• A plan may not make exceptions to its exclusion for “experimental or investigative”
treatments for only medical/surgical conditions on a case-by-case basis, but refuse to
consider similar exceptions on a case-by-case basis for MH/SUD conditions.
• A plan may not uniformly follow professionally recognized treatment guidelines for
prescription drug dosage limits for medical/surgical conditions, but periodically approve
lesser dosage limits than professionally recognized for MH/SUD conditions.

5. • A plan is permitted to exclude treatment for specific MH/SUD conditions because a
categorical exclusion is not a treatment limitation. However, a plan that excludes coverage
of treatment for a specific MH/SUD condition should ensure that such exclusion does not
run afoul of any other federal or state law. Based on this FAQ, an exclusion of all
treatments for Autism Spectrum Disorders, such as Applied Behavior Analysis therapy,
does not appear to violate the MHPAEA.
• It may violate the MHPAEA if a plan that utilizes step-therapy requires two unsuccessful
attempts at outpatient treatment for MH/SUD conditions before inpatient treatment is
approved, but only requires one unsuccessful attempt for medical/surgical conditions. This
plan design would not violate the MHPAEA if the plan can demonstrate that evidentiary
standards and other factors were utilized comparably to develop the different step-therapy
requirements for MH/SUD conditions, and medical/surgical conditions.
• A plan may not pay the same reimbursement rates to physician and non-physician
practitioners for treatment of medical/surgical conditions, but pay lower reimbursement
rates for non-physician practitioners (than physician practitioners) for treatment of
MH/SUD conditions.
• A plan cannot use higher network adequacy standards (e.g., the wait time to see a provider
for non-urgent care) to develop provider networks for medical/surgical providers than
MH/SUD providers, even if the network of MH/SUD providers satisfies applicable state
and federal network adequacy standards.
• A plan may not cover medically appropriate inpatient, out-of-network treatments for
medical/surgical conditions, but exclude all medically appropriate inpatient, out-of-
network treatments for MH/SUD conditions.
• Depending on how a plan defines different conditions (in accordance with federal and state
law, and consistent with generally recognized independent standards of current medical
practice), a specific acute condition that affects an individual’s physical health may be a
MH/SUD condition when caused by an underlying MH/SUD condition. In other words, a
condition that appears to be a medical/surgical condition on its face may actually be a
MH/SUD condition under the MHPAEA.
Guidance on Disclosures
In addition to ERISA’s general disclosure requirements, the MHPAEA requires that the criteria
for medical necessity determinations with respect to MH/SUD benefits must be made available to
participants, beneficiaries, and contracting providers upon request. Additionally, the reason for
any benefit denial of reimbursement or payment for services for MH/SUD benefits must be made
available to participants. To assist participants (and other parties) request this information, the
DOL published a template “Mental Health and Substance Use Disorder Parity Disclosure Request”
form, which is further explained below (see the subsection entitled “Participant Request Form”).
Additionally, the FAQs clarified that plans are required, under ERISA, to keep lists of network
providers up-to-date. But, a provider directory is not required to be included in the plan’s summary
plan description. Instead, assuming that the DOL’s safe harbor requirements for electronic
distribution are satisfied, the provider directory can be provided by a web address or hyperlink.

6. SELF-COMPLIANCE TOOL
The DOL published the “Self-Compliance Tool for the Mental Health Parity and Addiction Equity
Act (MHPAEA),” which will be updated every two years. The goal of the self-compliance tool
“is to help group health plans, plan sponsors, plan administrators, group and individual market
health insurance issuers, State regulators and other parties determine whether a group health plan
or health insurance issuer complies with the [MHPAEA], and additional, related requirements that
apply to [ERISA] group health plans.”
To do this, the self-compliance tool assists the user identify compliance issues, if any, with the
following:
• Applicability. Whether the plan is subject to the MHPAEA. There are limited exceptions
under the MHPAEA for small plans with less than 50 employees, retiree-only plans, plans
that provide coverage of only excepted benefits, plans that incur at least a 1% increased
cost to comply with the MHPAEA, and non-federal governmental plans that have received
a waiver from the Center for Medicare and Medicaid Services (“CMS”). Also, a plan that
doesn’t provide coverage for MH/SUD conditions (including plans that only provide
coverage for ACA-required preventive care services related to MH/SUD conditions) are
not subject to the MHPAEA.
• Coverage. Whether the plan provides the required coverage of MH/SUD benefits in each
of the six classifications (explained above) that coverage of medical/surgical benefits are
provided.
• Annual and Lifetime Limits. Whether an annual or lifetime limit imposed by the plan on
MH/SUD benefits (or all benefits) complies with the MHPAEA.
• Financial Requirements and QTLs. The self-compliance tool includes detailed steps to
conduct the mathematical-based “substantially all” and “predominate level” tests. Keep in
mind, however, that a proper analysis of the plan’s financial requirements and QTLs will
require the assistance of the plan’s insurer or TPA.
• Cumulative Financial Requirements and Treatment Limitations. Whether the plan includes
any impermissible cumulative financial requirements or treatment limitations.
• NQTLs. Most of the self-compliance tool consists of detailed steps to determine any
NQTLs imposed by the plan that may be problematic under the MHPAEA.
• Disclosure Requirements. Whether the plan complies with the MHPAEA’s disclosure
requirements.
Participant Request Form
A template request form that can be used by participants and beneficiaries in a group health plan
to make MHPAEA-related requests from the plan. Such requests may relate to: (1) general
information concerning the plan’s treatment limitations related to MH/SUD benefits; (2) treatment
limitations for specific MH/SUD conditions; and (3) information in connection with a claim for a

7. MH/SUD benefit that was denied or restricted. (A participant or beneficiary can use the template
request form now, even though it is still in “draft” form.)
If a plan receives a participant disclosure request under the MHPAEA, regardless of whether the
template form is used, the plan should be prepared to provide the following:
• Specific plan language regarding treatment limitations and identification of all
medical/surgical benefits and MH/SUD benefits within the classification to which the
limitation applies.
• The factors used in the development of any treatment limitations (e.g., excessive
utilization, recent medical cost escalation, high variability in cost for treatment, or safety
and effectiveness of treatment, etc). Also, the evidentiary standards used to evaluate those
factors.
• The methods and analysis used in the development of the treatment limitation.
• Evidence and documentation that the treatment limitation is applied no more stringently,
under the terms of the plan and in operation, to MH/SUD benefits than medical/surgical
benefits.
Enforcement Reports
The DOL’s enforcement reports don’t provide substantive guidance with respect to MHPAEA
compliance. However, it does provide some interesting statistics about the DOL’s enforcement
activities. Here are some of the more interesting statistics contained in those reports:
• Since October of 2010, EBSA has
conducted over 1,700 investigations in
connection with the MHPAEA in which
more than 300 violations were discovered.
• A typical EBSA investigation can take over
a year to complete and may require review
of several years’ worth of claims data (or
thousands of individual claims).
• In 2016, EBSA conducted 191 MHPAEA
investigations and discovered 44 violations.
• In 2017, EBSA conducted 187 MHPAEA
investigations and discovered 92 violations.
• In 2016 and 2017, EBSA received
approximately 240 MHPAEA inquires
• In 2017, almost half of the MHPAEA
violations involved a NQTL
(EBSA is the “Employee Benefit Securities Administration,” the agency within the DOL that has
jurisdiction over ERISA-covered employee benefit plans.)
Conclusion
The DOL’s focus on enforcing the MHPAEA began under the Obama administration. This
appears to be one area where the DOL is continuing these efforts under the Trump administration.
In light of the DOL’s focus on ensuring compliance with the MHPAEA, prudent plan sponsors
will start discussing these issues with their insurers/TPAs, advisors and legal counsel. These
efforts may go a long way in minimizing the impact and expense of a future DOL investigation.
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