On January 22, 2016, the court in Joseph and Gail F. v. Sinclair Services Company, D. Utah No. 2:14-cv-00505, held that a self-funded plan violated the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 by excluding residential treatment from its mental health coverages. In relevant part, the statute commands that treatment limitations applicable to mental health benefits must be “no more restrictive than the predominant treatment limitations applied to substantially all medical and surgical benefits,” and compels plans to assure that “there are no separate treatment limitations that are applicable only with respect to mental health . . . benefits.” 29 U.S.C. § 1185a(a)(3)(A)(ii). The plan in question defined a residential treatment facility as “[a] child-care institution that provides residential care and treatment for emotionally disturbed children and adolescents.” So, when the plan deleted coverage for residential treatment effective January 1, 2013, it targeted mental health benefits with no corresponding reduction of general medical and surgical benefits. Based on that holding, the court remanded the ERISA appeal to the plan administrator for a redetermination of benefits.

When amending a self-funded plan to manage claim exposure, take care not to eliminate a category of coverage that applies only to mental health treatment unless medical and surgical benefits are subject to substantially the same reduction.