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
(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.
Exceptions
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."
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.
The ACA
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
