October 27, 2021
Congress and Department of Labor Look to Strengthen Mental Health Parity

Congress and Department of Labor Look to Strengthen Mental Health Parity

The Department of Labor recently took an important step forward for strengthening Mental Health Parity enforcement by filing suit, and quickly settling, a claim against United Healthcare because of its restrictive policies regarding out-of-network mental health services. In August, United paid over $15 million to settle claims that it violated Mental Health Parity due to providing more restrictive reimbursement policies in the mental health field than in the medical-surgical.

The Department of Labor says this is the step in increasing enforcement against both health insurance companies and self-insured employers for Parity violations. In a change from the previous administration President Biden has said that enforcing Parity a high priority and is looking to expand its enforcement authority.

This action follows the passage of the 2021 federal Consolidated Appropriations Act, bolstered the Parity Act by requiring requires the group health plans to provide an analysis explaining the factors used on treatment limits for mental health services. It also authorized the Department of Labor to investigate employers themselves for Parity violations. The Department of Labor has opened 4,000 health plan investigations for alleged Parity Violations since 2011. However, its ability to sanction those plans remains limited.

Meanwhile, in Congress, the House is currently legislation which would further strengthen the government’s ability to enforce parity. In 2008, Congress passed the Mental Health Parity Act which requires employer sponsored health insurance to cover mental health and substance abuse at the same levels as traditional medical coverage. However, the law did not provide a way for the Department of Labor (which regulates these plans) to enforce the provisions of the law through civil administrative fines, and so far it has been enforced through piecemeal (often class-action) litigation.

This proposed legislation fixes that issue by empowering the DOL to investigate and issue civil fines against health insurers and health plan sponsors that violate parity. Were this law to pass, it would make a huge difference to the huge number of people suffering from mental health and substance abuse issues who are wrongfully denied coverage by their insurer.

More information available below:

Parity Enforcement Act of 2021 -one-pager.pdf (house.gov)

Text – H.R.1364 – 117th Congress (2021-2022): Parity Enforcement Act of 2021 | Congress.gov | Library of Congress

DOL, State Regulators Step Up Enforcement Around Mental Health Parity (shrm.org)

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