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Solving Disability Discrimination
of Health Plan Benefit Plans

The Department of Labor has instituted disability nondiscrimination regulations which may apply to those with "health factors."  The regulations are complex; for example, they would prohibit a plan from refusing to enroll participants with a disability into the general medical benefits plan, but the regulations would not prohibit the exclusion of benefits for the treatment of the disability itself, so long as the exclusion applied to all members of the plan equally. Similarly, limits on one therapy which apply to all illnesses would be acceptable.  However, a plan  cannot modify its rules in response to a particular person's claims. This regulation compliments the ADA which prohibits discrimination against Americans with Disabilities. 

The regulation is based on a section of HIPAA, 29 U.S.C. sec. 1182,  which states that a plan may not establish rules for eligibility (including continued eligibility) of any individual to enroll under the terms of the plan based  a health status of the individual or a dependent.  The regulation expands the statute by using an expansive view of eligibility.  Like the statute written by Congress, the regulation does not mandate any coverage.  State legislatures have mandated certain coverages, such as minimum treatments for serious mental illnesses, but these State-specific mandates do not apply to large employer plans which are self funded.

This law applies to health plans which are supplied by private employers.  Governmental employers may be covered, but some, such as the City of Chicago, have opted out of the rules. 

New Disability denial rules take effect April 1, 2018

New: DOL issuing FAQ for Mental Health Parity, June 2018

This page:

The basic rule is as follows:

(b) Prohibited discrimination in rules for eligibility--(1) In general--
(i) A group health plan, ..., may not establish any rule for eligibility ...of any individual to enroll for benefits under the terms of the plan or group health insurance coverage that discriminates based on any health factor* that relates to that individual or a dependent of that individual.
(ii) For purposes of this section, rules for eligibility include ...
(A) Enrollment;
(B) The effective date of coverage;
(C) Waiting (or affiliation) periods;
(D) Late and special enrollment;
(E) Eligibility for benefit packages (including rules for individuals to change their selection among benefit packages);
(F) Benefits (including rules relating to covered benefits, benefit restrictions, and cost-sharing mechanisms such as coinsurance, copayments, and deductibles);
(G) Continued eligibility; and
(H) Terminating coverage (including disenrollment) of any individual under the plan.

This rule is subject to the provisions of 
paragraph (b)(2)  (explaining how this rule applies to benefits) [ie, no mandate for any coverage]
paragraph (b)(3) (allowing plans to impose certain preexisting condition exclusions),
paragraph (d) (containing rules for establishing groups of similarly situated individuals),
paragraph (e) (relating to nonconfinement, actively-at-work, and other service requirements),
paragraph (f) (relating to bona fide wellness programs), and
paragraph (g) (permitting favorable treatment of individuals with adverse health factors).

*Definition of Health Factor
(a) Health factors. (1) The term health factor means, in relation to an individual, any of the following health status-related factors:
(i) Health status;
(ii) Medical condition
Medical condition or condition means any condition,whether physical or mental, including, but not limited to, any condition resulting from illness, injury (whether or not the injury is accidental), pregnancy, or congenital malformation.
(iii) Claims experience;
(iv) Receipt of health care;
(v) Medical history;
(vi) Genetic information;
(vii) Evidence of insurability
Evidence of insurability includes: conditions arising out of acts of domestic violence; and participation in activities such as motorcycling, snowmobiling, all-terrain vehicle riding, horseback riding, skiing, and other similar activities.
or (viii) Disability.

(c) Prohibited discrimination in premiums or contributions--
(1) In general--(i) A group health plan, ... may not require an individual, as a condition of enrollment or continued enrollment under the plan or group health insurance coverage, to pay a premium or contribution that is greater than the premium or contribution for a similarly situated individual  enrolled in the plan or group health insurance coverag...based on any health factor that relates to the individual or a dependent of the individual.

A plan is not required to provide coverage which would benefit a person with a disability.
The regulation states:
"(b)(2) Application to benefits--(i) General rule--
(A) Under this section, a group health plan ... is not required to provide coverage for any particular benefit to any group of similarly situated individuals.
(B) However, benefits provided under a plan ... must be uniformly available to all similarly situated individuals... Likewise, any restriction on a benefit or benefits must apply uniformly to all similarly situated individuals and must not be directed at individual participants or beneficiaries based on any health factor of the participants or beneficiaries ...

Thus, for example, a plan or issuer may
  • limit or exclude benefits in relation to a specific disease or condition,
  • limit or exclude benefits for certain types of treatments or drugs, or
  • limit or exclude benefits based on a determination of whether the benefits are experimental or not medically necessary,
 but only if the benefit limitation or exclusion
  • applies uniformly to all similarly situated individuals and
  • is not directed at individual participants or beneficiaries based on any health factor of the participants or beneficiaries.
 In addition, a plan or issuer may impose annual, lifetime, or other limits on benefits and may require the satisfaction of a deductible, copayment, coinsurance, or other cost-sharing requirement in order to obtain a benefit if the limit or cost-sharing requirement applies uniformly to all similarly situated individuals and is not directed at individual participants or beneficiaries based on any health factor of the participants or beneficiaries. ...
 (Whether any plan provision or practice with respect to benefits complies with this paragraph (b)(2)(i) does not affect whether the provision or practice is permitted under any other provision of the Act, the Americans with Disabilities Act, or any other law, whether State or federal.)
(C) For purposes of this paragraph (b)(2)(i), a plan amendment applicable to all individuals in one or more groups of similarly situated individuals under the plan and made effective no earlier than the first day of the first plan year after the amendment is adopted is not considered to be directed at any individual participants or beneficiaries."

For the more of the actual text of the regulation click 29 CFR sec. 2590.702

Relation to the Mental Health Parity Act of 2008.

The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 was enacted in late 2008.  Like the nondiscrimination rule discussed above, it does not require plans to provide any particular coverage, but if the plan does, then the benefits levels must be on par with general medical benefits.

Important points:
  • In general the law does not become effective to most plans until 2010.
  • The old Parity law restricted some caps on coverage, but the new law lifts caps, such as the number of visits per year payable and the amount of copayment.
  • The new law does not  require employers to cover mental illness or any other type of illness.  Companies can choose which disorders to cover or not cover.  If the plan does cover mental illness, and if the treatment is covered, then the copays and visit numbers must be the same as for general medical claims.
  • Out-of-network mental coverage will apply in the same way the Plan covers medical out-of-network claims.
  • Plans must supply the criteria for medical necessity determinations.
  • The Act does not give a solid definition of mental health benefits.
  • The Parity Act applies only to employers with more than 50 employees.
  • Part (b) of the Act also applies the new rule to nonFederal governmental employees (under the PHSA).
  • Part (c) of the Act requires compliance for the plan to retain taxfree treatment under the Internal Revenue Code
  • Part (d) of the Act requires Secretaries of Labor, Health and Human Services, and the Treasury to write regulations.
  • State's mental health laws stay in effect if they are broader, unless preempted by a self-funded employer plan.
  • The law does not apply to nonemployer plans, which are governed by State insurance rules.
July 2010: The Federal government issues temporary "Safe Harbor" regulations for the terms of a plan. 
Until it issues final regulations, the Department of Labor has establish an enforcement safe harbor:  It will not take enforcement action against a plan that divides its outpatient benefits into two sub-classifications for the purpose of applying the financial requirement and treatment limitation rules under the Parity Act (1) office visits, and (2) all other outpatient items and services. After the sub-classifications are established, the plan may not impose any financial requirement or treatment limitation on mental health or substance use disorder benefits in any sub-classification (i.e., office visits or non-office visits) that is more restrictive than the predominant financial requirement or treatment limitation that applies to substantially all medical/surgical benefits in the sub-classification.  Other than as permitted under this enforcement policy, sub-classifications are not permitted when applying the financial requirement and treatment limitation rules under Parity Act. Separate sub-classifications for generalists and specialists are not permitted.

Summary: This Act is about parity, not coverage.  Its benefits extend if there is medical coverage, and employers and insurers can exclude some diagnoses.  They can also impose managed care and precerticification rules to to the same extendt as the medical coverage.

Relation to Americans with Disabilities Act

Like HIPAA, the ADA requires that individuals with disabilities be given equal access to employer-provided group health insurance. The EEOC believes the ADA prohibits the use of coverage limitations or exclusions that are "disability-based distinctions" unless it can be shown that certain criteria are met. Specifically, it must be shown that the insurance plan is within the protective ambit of § 501(c) of the statute in that it is a "bona fide" plan, that the disability-based distinction is justified by the risks or costs associated with the particular disability limited or excluded, and that all conditions with comparable risks and costs are treated in the same way. See 42 U.S.C. § 12201(c); 29 C.F.R. § 1630.16(f). A coverage distinction is disability-based if it singles out a particular disability, a discrete group of disabilities (e.g., kidney diseases, cancers), or disability in general.


Section 1557 of the Affordable Care Act (ACA) prohibits discrimination on the basis of disability in the area of health plans.
In July 2016, the Federal government instituted regulations incorporating section 504 and the ADA into section 1557. 

The definition of “disability” is the same as the definition of this term in the Rehabilitation Act, which incorporates the definition of disability in the ADA, as construed by the ADA Amendments Act of 2008. Thus, the proposed rule incorporates the definition of “major life activities” and the construction of all of the terms and standards in the definition of “disability” set forth in the ADA Amendments Act.  ("Disability means, with respect to an individual, a physical or mental impairment that substantially limits one or more major life activities of such individual; a record of such an impairment; or being regarded as having such an impairment, as defined and construed in the Rehabilitation Act, 29 U.S.C. 705(9)(B), which incorporates the definition of disability in the ADA, 42 U.S.C. 12102, as amended. Where this part cross-references regulatory provisions that use the term “handicap,” “handicap” means “disability” as defined in this section.")

Some of those regulations are listed here:

92.101 (a) General.
(1) Except as provided in Title I of the ACA, an individual shall not, on the basis of race, color, national origin, sex, age, or disability, be excluded from participation in, be denied the benefits of, or otherwise be subjected to discrimination under any health program or activity to which this part applies.

§ 92.202 Effective communication for individuals with disabilities.

(a) A covered  entity shall take appropriate steps to ensure that communications with individuals with disabilities are as effective as communications with others in health programs and activities, in accordance with the standards found at 28 CFR 35.160 through 35.164. Where the regulatory provisions referenced in this section use the term “public entity,” the term “covered entity” shall apply in its place.


(b) A recipient or State-based Marketplace SM shall provide appropriate auxiliary aids and services to persons with impaired sensory, manual, or speaking skills, where necessary to afford such persons an equal opportunity to benefit from the service in question.

§ 92.203 Accessibility standards for buildings and facilities.

§ 92.204 Accessibility of electronic and information technology.

(a) Covered entities shall ensure that their health programs or activities provided through electronic and information technology are accessible to individuals with disabilities, unless doing so would result in undue financial and administrative burdens or a fundamental alteration in the nature of the health programs or activities. When undue financial and administrative burdens or a fundamental alteration exist, the covered entity shall provide information in a format other than an electronic format that would not result in such undue financial and administrative burdens or a fundamental alteration but would ensure, to the maximum extent possible, that individuals with disabilities receive the benefits or services of the health program or activity that are provided through electronic and information technology.


(b) Recipients and State-based Marketplaces shall ensure that their health programs and activities provided through Web sites comply with the requirements of Title II of the ADA.

§ 92.205 Requirement to make reasonable modifications.

A covered entity shall make reasonable modifications to policies, practices, or procedures when such modifications are necessary to avoid discrimination on the basis of disability, unless the covered entity can demonstrate that making the modifications would fundamentally alter the nature of the health program or activity. For the purposes of this section, the term “reasonable modifications” shall be interpreted in a manner consistent with the term as set forth in the ADA Title II regulation at 28 CFR 35.130(b)(7).

§ 92.207 Nondiscrimination in health-related insurance and other health-related coverage.

 (a) General. A covered entity shall not, in providing or administering health-related insurance or other health-related coverage, discriminate on the basis of race, color, national origin, sex, age, or disability.


(b) Discriminatory actions prohibited. A covered entity shall not, in providing or administering health-related insurance or other health-related coverage:


(1) Deny, cancel, limit, or refuse to issue or renew a health-related insurance plan or policy or other health-related coverage, or deny or limit coverage of a claim, or impose additional cost sharing or other limitations or restrictions on coverage, on the basis of race, color, national origin, sex, age, or disability;


(2) Have or implement marketing practices or benefit designs that discriminate on the basis of race, color, national origin, sex, age, or disability in a health-related insurance plan or policy, or other health-related coverage;

92.209 Nondiscrimination on the basis of association.

A covered entity shall not exclude from participation in, deny the benefits of, or otherwise discriminate against an individual or entity in its health programs or activities on the basis of the race, color, national origin, sex, age, or disability of an individual with whom the individual or entity is known or believed to have a relationship or association.

New Disability denial rules take effect April 1, 2018

All ERISA employee benefit plans that condition a benefit upon a determination that a claimant is disabled must apply new rules as of April 1, 2018.

A plan denying a claim must include the following protections:

  • a discussion of the decision, including an explanation of the basis for disagreeing with or not following: (1) the views presented by the claimant of health care and vocational professionals who treated or evaluated the claimant; (2) the views of medical or vocational experts whose advice was obtained on behalf of the plan in connection with a claimant's adverse benefit determination; and (3) a disability determination regarding the claimant made by the Social Security Administration; and
  • either: (1) the specific internal rules, guidelines, protocols, standards or other similar criteria of the plan relied upon in making the adverse benefit determination; or (2) a statement that such rules, guidelines, etc. do not exist.

For initial claim denials, the notice must also include a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records and other information relevant to the claim.

For appeal denials, the notice must include a description of any plan-specific limitations period that applies to the claimant's right to bring a civil action, including the calendar date on which the contractual limitations period expires for the claim.

These requirements do not apply just to  those plans  providing long-term or short-term disability benefits, but to any decision affecting benefits where disability is a consideration, for example,

  • group health plans providing coverage beyond age 26 for adult children who are disabled;
  • life insurance plans providing a premium waiver for participants who are totally disabled; or
  • deferred compensation plans providing special provisions for disabled participants, such as accelerated vesting or early retirement options.
copyright 2006, 2007, 2008, 2018 Frank E. Stepnowski. No claim to original U.S. government works.

Department of Labor issuing FAQ for Mental Health Parity

The Mental Health Parity Act and the 21st Century Cures Act prohibit a plan from imposing a "NonQuantitative Treatment Limitation" or NQTL to mental health benefits “unless, under the terms of the plan…as written and in operation, any processes, strategies, evidentiary standards, or other factors used in applying the NQTL to [mental health and substance abuse] in the classification are comparable to, and are applied no more stringently than the processes, strategies, evidentiary standards, or other factors used in applying the limitation to medical/surgical benefits in the same classification.”
The current version of the FAQ may be found at https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-39-proposed.pdf

Regulations at 26 CFR 54.9812-1(c)(4)(ii); 29 CFR 2590.712(c)(4)(ii); and 45 CFR 146.136(c)(4)(ii) contain an illustrative list of NQTLs that includes, among other things,
  • medical management standards limiting or excluding benefits based on medical necessity;
  • formulary design for prescription drugs; network tier design; and
  • plan methods for determining usual, customary, and reasonable charges

Some of the topics the FAQ address are:
  • A medical management standard limiting or excluding benefits based on whether a treatment is experimental or investigative is an NQTL. Thus a Plan cannot deny coverage for ABA to a patient with autism on the ground the plan deems it experimental.
  • A medical management standard that limits or excludes benefits based on whether a treatment is experimental or investigative is an NQTL, and cannot be applied more stringently or applied with a different evidentiary standard.
  • If the plan follows the dosage recommendations in professionally-recognized treatment guidelines to set dosage limits for prescription drugs in its formulary to treat medical/surgical conditions, it must also follow comparable treatment guidelines, and apply them no more stringently, in setting dosage limits for prescription drugs, including buprenorphine, to treat MH/SUD conditions.  
  • An exclusion of all benefits for a particular condition or disorder, however, is not a treatment limitation for purposes of the definition of “treatment limitations” in the MHPAEA regulations. 
  • Unless the plan can demonstrate that evidentiary standards or other factors were utilized comparably to develop and apply the differing step therapy requirements for these MH/SUD and medical/surgical benefits, this NQTL does not comply
  •  While a plan is not required to pay identical provider reimbursement rates for medical/surgical and MH/SUD providers, a plan’s standards for admitting a provider toparticipate in a network (including the plan’s reimbursement rates for providers) is an NQTL
  •  Here, while the plan meets applicable State and Federal network adequacy standards, the plan does not consider how long participants and beneficiaries may have to wait for appointments for services as a factor in developing its network of MH/SUD providers, even though the plan considered it in developing the network for medical/surgical providers.  Accordingly, the subject plan does not comply.
  • If under the terms of the plan or health insurance coverage (and in accordance withapplicable Federal and State law, if an insured plan), the particular acute condition affecting an individual’s physical health is defined as a mental health or substance use disorder condition then benefits for emergency room care provided for the diagnosis, cure, mitigation, treatment, or prevention of the acute condition are MH/SUD benefits.

 The FAQ may be revised, but they are powerful pronouncements of these laws' effects.

Remember that every case is different, and the rules are technical.  Proving a case is different from making an allegation.  .  Also, the law has technical requirements which may exclude those who are not qualified employeees or employers.

Please do not use this article as definitive advice, as your situation may vary, and the laws and statutes may change.
Nothing on this page creates an attorney client relationship

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