Parity Legislation Update April 2021 Major Parity Victory

Parity Legislation Update April 2021

Major Parity Victory at the End of 116 th Congress • The President signed the Consolidated Appropriations Act (CAA) into law on 12/27/2020 • Section 203 of Division BB amended the Mental Health Parity and Addiction Equity Act (federal parity act) • Added new compliance requirements • Added new requirements for federal agencies • Applies to all federally-regulated group health plans and all stateregulated insurers

What are the New Requirements for Insurers and Plans? • All health insurers and all group health plans must perform comparative analyses about how they design and apply nonquantitative treatment limitations (NQTLs) – NQTLs include prior authorization, formulary design, network design, reimbursement rate setting, and many others • Beginning 02/10/2021 (2 months ago) all insurers and plans must make these comparative analyses available to the federal agencies or states upon request • This means the insurance industry really has to take the law seriously now

New Specifications for Federal Agencies • Federal Departments of Health and Human Services (HHS), Labor (DOL), and Treasury must request the analyses from health plans if: – There’s a complaint – The Departments think there might be noncompliance for some reason – Must request analyses from no fewer than 20 plans each year • Departments can ask for more information if they don’t think the plan provided a sufficient comparative analysis and plan must provide this additional information • Plans have 45 days to correct violations; if not fixed, every beneficiary of the plan is notified within 7 days • Report to Congress each year about findings

New Federal Compliance Standard Solidifies Existing Approach • Before this federal legislation was enacted over 20 states had taken a nearly identical approach through either legislative or regulatory means • DOL included this approach in its 2018 Parity Self Compliance Tool and its updated 2020 version • The Departments issued guidance on 4/2 (last week) specifying what is required from plans and insurers under the new law – Guidance reinforced that this was already a “best practice” but now is “required”

Work in the 117 th Congress to Build on this Success • Two-pronged approach in Congress to help implement the new requirements • Legislation to send $50 million in grants to states to collect & review comparative analyses and further investigate when necessary – Puts more money into an existing grant program that was used in 2017 -18 to implement parity – Rep. Cardenas and Sen. Murphy have agreed to sponsor, looking for R original cosponsors…several interested • $25 million appropriation to DOL to implement new requirements & general enforcement – Reps. Courtney and Porter are circulating dear colleague to send to the appropriators - Deadline: 4/21

Additional Parity Focus in 117 th Congress • The Parity Enforcement Act (H. R. 1364) has been reintroduced • Would allow DOL to impose civil monetary penalty on plans and insurers for violating the federal parity act – Capped at $500 k unless violation is “willful” • This was originally offered as an amendment to the SUPPORT Act in 2018 by Sen. Murphy but died on a party-line vote