An employer maintains both a major medical program and an employee assistance program (EAP). The EAP provides, among other benefits, a limited number of mental health or substance use disorder counseling sessions. Participants are eligible for mental health or substance use disorder benefits under the major medical program only after exhausting the counseling sessions provided by the EAP. No similar exhaustion requirement applies with respect to medical/surgical benefits provided under the major medical program. Does this plan design comply with the mental health parity regulations?
No. Limiting eligibility for mental health and substance use disorder benefits to only after EAP benefits are exhausted is a nonquantitative treatment limitation. In this plan design, because no comparable requirement applies to medical/surgical benefits, the requirement may not be applied to mental health or substance use disorder benefits.
Nonquantitative treatment limitation. A nonquantitative treatment limitation is a limitation that is not expressed numerically, but otherwise limits the scope or duration of benefits for treatment. Group health plans may not impose any nonquantitative treatment limitation to mental health or substance use disorder benefits unless certain requirements are met. Any processes, strategies, evidentiary standards or other factors used in applying the nonquantitative treatment limitation to mental health or substance use disorder benefits in a classification must be comparable to, and applied no more stringently than, the processes, strategies, evidentiary standards or other factors used in applying the limitation with respect to medical surgical/benefits in the classification. These requirements apply to the terms of the plan, both as written and in operation.
Note that these requirements allow variations to the extent that recognized clinically appropriate standards of care may permit a difference.
Examples. Nonquantitative treatment limitations include:
- medical management standards,
- prescription drug formulary design,
- standards for provider admission to participate in a network,
- determination of usual, customary and reasonable charges,
- step therapy protocols, and
- exclusions based on failure to complete a course of treatment.
Source: IRS Reg. §54.9812(c)(4), Example 5.