A district court in Utah recently held that a self-funded plan violated the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) with a residential treatment exclusion. The MHPAEA requires group health plans and health insurance issuers to ensure that financial requirements and treatment limitations applicable to mental health or substance use disorder benefits are no more restrictive than the predominant requirements or limitations applied to substantially all medical/surgical benefits. The plan in question excluded residential treatment from its mental health coverage.
Under the MHPAEA plans are compelled to insure that “there are no separate treatment limitations that are applicable only with respect to mental health…benefits.” 29 U.S.C. § 1185(a)(3)(A)(ii). In 2013 the plan created an amendment deleting coverage for residential treatment with mental health coverage but there was no corresponding reduction of general medical and surgical benefits. Based on the finding that a violation of the MHPAEA had occurred, the court remanded the ERISA appeal to the plan administrator for a redetermination of the benefits owed.
Plan administrators are cautioned when amending or drafting self-funded plans not to eliminate a category of coverage that applies only to mental health or substance abuse without also subjecting medical and surgical benefits to a similar reduction.
Joseph and Gail F. Sinclair Services Company, 2016 WL 309787 (D.Utah 2016)