January 01, 2024

Business Group on Health Policy Position Statements

Business Group on Health’s position statements on health policy issues impacting employer-sponsored health coverage.

Full Series

Issue/Background

Employer plan sponsors view health and well-being as an important, and increasing, integral component of overall workforce strategy. Employers generally recognize or anticipate mental health and substance use disorder (MH/SUD) issues as the top prolonged impact resulting from the COVID-19 pandemic. According to the Business Group on Health’s 2024 Large Employers Health Care Strategy Survey, 77% of employers reported an increase in MH/SUD needs this year, with another 16% anticipating an increase in the future. Even prior to the pandemic, employers recognized the importance of MH/SUD needs and were taking meaningful steps to help their employees and families. While employers are committed to compliance and meeting the plan’s legal and regulatory requirements, they increasingly go above and beyond to support their members, reduce stigma, and help connect their members to timely, effective, and affordable MH/SUD resources and services.

In many cases, the regulatory conversation pertaining to MH/SUD focuses too narrowly on individual elements of the complex, multistakeholder system needed to support patients with appropriate care. Expectations are increasingly placed on employer plans to resolve issues often attributable to and created by other stakeholders. We believe each stakeholder group must take steps, bolstered by government policies, to enhance the availability, effectiveness, and affordability of trained, professional service providers to help address the urgent MH/SUD concerns. Among others, patient groups, health plans, treatment facilities, and social and medical service providers are all important participants who can and should contribute to successful support for individuals with MH/SUD needs.

From a compliance perspective, employers are committed to meeting the requirements of the Mental Health Parity and Addiction Equity Act (MHPAEA), enacted in 2008, which required group health plans and health insurance issuers to ensure that financial requirements (FRs), quantitative treatment limitations (QTLs), and nonquantitative treatment limitations (NQTLs) – i.e., any provision limiting the scope or duration of benefits that is not a QTL – on MH/SUD benefits are no more restrictive than those applied to medical/surgical (M/S) benefits. This is commonly referred to as the plan providing MH/SUD “in parity with” M/S benefits. In December 2020, the Consolidated Appropriations Act, 2021 (CAA ’21) instituted additional compliance obligations for group health plans, including, beginning February 2021, that plan sponsors must perform and document comparative analyses of the design and application of NQTLs and make these comparative analyses available in certain circumstances. The Departments of Labor, Health and Human Services, and Treasury (collectively, the Departments) have issued several rounds of regulations and sub-regulatory guidance aimed at employers and health plans to implement these statutes, but many questions remain and additional steps to engage and drive broader stakeholder support, alignment, and guidance would be welcome.

Position

Employers continue to focus on expanding access to, and providing robust coverage of, MH/SUD support and services. Employers have devoted significant investments in time and resources to comply with MHPAEA. Compliance challenges faced by employers are not generally attributable to a lack of effort or commitment. Rather, despite the existing MHPAEA guidance provided by the Departments, there remain significant gaps in the guidance informing employer plan sponsors the level of detail necessary to demonstrate compliance. This perennial challenge is most recently illustrated in proposed changes to MHPAEA in the August 2023 Notice of Proposed Rulemaking, which do not build on prior guidance, practices, or plan investments to address gaps or ministerial requirements. Instead, the modifications would create significant new burdens on employers that will increase administrative costs and could challenge sustained delivery of MH/SUD coverage.

Employers want to partner with the Departments and other stakeholders to develop reasonable and workable standards to comply with the important objectives of MHPAEA. Business Group on Health encourages the Departments to take employer plan sponsor efforts to comply with the complex MHPAEA requirements in good faith. We further believe the Departments should adopt an enforcement approach that assures that employers’ vital investments to support employees and their family members with MH/SUD issues will not be weakened by the expenditure of resources for documenting and reporting their compliance efforts.

Business Group on Health generally seeks to support MH/SUD policies and proposals that:

• Maintain plan sponsors’ ability and flexibility to design employee benefit plans to suit the needs of their business and employee populations;
• Promote and encourage all MH/SUD stakeholders to participate in in-network arrangements without further distorting market dynamics and increasing ministerial burdens that are counter-productive;
• Recognize and honor that the service delivery and professional practices of MH/SUD providers, collectively and individually, is unique and has different business practices, and modes, methods, and needs for effective, appropriate care than M/S items and services;
• Address the nationwide shortage of MH/SUD providers and impediments to cross-state and top-of-license practice, which have created barriers to access to these critical services for employees and their families; and
• Foster the growth of telehealth and telemental health services that promise to improve the value of, and access to, MH/SUD care delivery.

With respect to recent and ongoing MHPAEA implementation, rulemaking, and enforcement, Business Group on Health supports:

• Providing employer plan sponsors with further guidance, examples and practical compliance support (e.g., a checklist of defined NQTLs that can be utilized by employers to conduct the NQTL comparative analyses) in accordance with the CAA ’21;
• NQTL standards in-line with the Departments’ 2013 final rules, as relied upon in enacting the CAA ’21 and aligned with long-standing ERISA fiduciary principles and requirements for plan administration and delivery;
• Providing clear definitions and terminology necessary and appropriate for complying with statutory requirements at the proposed rule stage so that stakeholders can provide comments and ensure all voices are considered; and
• Updating the Departments’ MHPAEA Self-Compliance Tool into an easy-to-use, comprehensive, and reliable resource for MHPAEA compliance assessments.

Plans and plan sponsors have made good faith efforts not only to comply with MHPAEA, but to improve their MH/SUD programs and support. Despite these efforts, employers still experience ongoing systemic challenges and uncertainty about regulatory guidance. We oppose policies and proposals that take a punitive approach, rather than a partnering and compliance assistance approach, including opposing assessing civil monetary penalties or other amendments to ERISA’s enforcement authority and provisions.

Additionally, employers support providing network and directory information in order to help ensure individuals are able to access timely and appropriate care. We expect vendor investment in directories and navigation to continue in future years, and advocate that any policy effort to enhance or affect available information to individuals should be developed in partnership with employers and their vendors to ensure workable standards and avoid unintended conflicts with other compliance requirements and erosion of network participation.

WHY IT MATTERS

• Employers are highly focused on access to MH/SUD services, more than any other mental health concern. According to our 2024 Large Employers Health Care Strategy (LEHCS) Survey, 80% of employers identified access as one of their top mental health focus area for 2024.
• Additionally, employers continue to work to reduce barriers to MH/SUD care caused by out-of-pocket costs. Employers are actively deploying a range of approaches to address this concern, including covering virtual counseling at no or low cost to employees and by bringing counselors on-site at no or low cost to employees.
• From a policy perspective, 87% of employers surveyed by the Business Group in our 2024 LEHCS Survey viewed improving access to mental health services as either a very important or important legislative priority.
• Costs associated with MH/SUD conditions are significant for employers. According to a study of commercially insured adults in the U.S., overall health claims for those with mental health conditions cost twice as much as those for individuals without them, even though direct spending on mental health care accounted for less than 5% of costs (Milliman, 2023). Direct employer-sponsored plan costs for SUD care in the U.S. was estimated to be $15,640 per affected individual with an SUD diagnosis, and estimated at over $35 billion in 2018 (JAMA, 2023).

More Topics

Policy & Advocacy Mental Health Parity