DOL Announces $15.6 Million Mental Health Parity Settlement

A large insurer has agreed to pay $15.6 million and take corrective actions to resolve claims brought by the DOL, a state attorney general, and group health plan participants for alleged violations of the Mental Health Parity and Addiction Equity Act (MHPAEA) and ERISA. A DOL investigation revealed that, going back to at least 2013, the insurer reduced reimbursement rates for out-of-network mental health services and flagged participants undergoing mental health treatments for utilization review, resulting in claim denials. The DOL alleged in a court filing that the insurer set policies and procedures and adjudicated claims so that the plans it administered systematically reimbursed claims for out-of-network mental health services in a more restrictive manner than claims for out-of-network medical and surgical services. In addition, the DOL alleged that the insurer failed to disclose sufficient information about its policies and practices to plan participants and beneficiaries, resulting in an ERISA fiduciary breach.

Under the settlement agreement, the insurer will pay $13.6 million to affected participants and beneficiaries and over $2 million in penalties. It will also adjust its reimbursement policies and provide “accessible and comprehensible” explanations of its policies on its public website. The DOL news release emphasizes that the DOL is committed to “vigorously enforcing” the MHPAEA’s requirements and notes that the DOL self-compliance tool (see our Checkpoint article) is available to assist plans and insurers in meeting their compliance obligations.

EBIA Comment: The MHPAEA regulations prohibit a plan from imposing nonquantitative treatment limitations (NQTLs), such as the practices and policies addressed by this settlement, on mental health and substance use disorder benefits unless the NQTLs are comparable to, and are applied no more stringently than, NQTLs applied to medical and surgical benefits. The DOL continues to step up its MHPAEA enforcement efforts, particularly with respect to NQTLs. Plan sponsors, TPAs, and insurers should carefully assess their plans for MHPAEA compliance, including the new requirement to provide written comparative analyses of all NQTLs (see our Checkpoint article). For more information, see EBIA’s Group Health Plan Mandates manual at Sections IX.E (“Mental Health Parity: Nonquantitative Treatment Limitations”), IX.H (“Mental Health Parity Reporting Requirements”), and IX.J (“Mental Health Parity: Enforcement”). See also EBIA’s Self-Insured Health Plans manual at Section XIII.C.2 (“MHPA and MHPAEA: Mental Health Parity”).

Contributing Editors: EBIA Staff.