On October 23, 2015, the Departments of Labor, Health and Human Services and Treasury (the “Agencies”) jointly released their twenty-ninth (XXIX) set of Frequently Asked Questions (FAQs) about Affordable Care Act (ACA) implementation. This latest set of FAQs generally (1) clarify that certain services performed ancillary to various preventive services must also be covered without imposition of cost-sharing, (2) explain that in-kind incentives provided through wellness programs are also subject to limitations under HIPAA and (3) state that medical necessity guidelines related to mental health and substance abuse benefits must be provided to participants upon request. Additional detail is provided below.
The ACA generally requires that non-grandfathered group health plans provide services designated as preventive care without the imposition of cost-sharing. If a group health plan provides a preferred network of service providers, this requirement generally applies only to in-network services. Since the enactment of the ACA, the agencies have released numerous guidelines regarding coverage of preventive services. The new FAQs provide the following additional guidance:
The new guidance also contains one FAQ regarding wellness programs. As previously reported, the Department of Labor and Equal Employment Opportunity Commission are currently crafting guidelines that will describe, among other things, when a wellness program is a group health plan for purposes of the HIPAA wellness regulations and future EEOC regulations (a description of the HIPAA wellness regulations and the EEOC proposed regulations can be found here and here). In general, the HIPAA wellness regulations provide that certain wellness programs will not be considered discriminatory based on a health factor if the incentives offered under such programs are limited to 30% (50% in the case of tobacco-related program) of the cost of coverage. The EEOC proposed regulations contain similar, though by no means identical, rules.
The newest FAQs clarify that in-kind incentives, such as gift cards, sports gear or other items, must also be considered when determining whether the incentive limitation has been reached. Both the HIPAA wellness regulations and EEOC proposed regulations indicate that the incentive limitations apply only to those wellness programs that are, or are part of, group health plans (note that HIPAA in general only applies to group health plans). Many employers offer wellness programs that do not involve premium discounts, rebates or surcharges to their entire workforce. For example, an employer might offer its employees the opportunity to get a free wearable fitness tracker upon completing a nutrition course or walking program. The prevailing understanding has been that this type of program is not a group health plan and, thus, is not subject to HIPAA or the EEOC proposed regulation’s incentive limitations. Unfortunately, the new FAQs do not address when in-kind incentives are connected to a group health plan. Additional Agency guidance would be helpful.
Mental Health Parity
The Mental Health Parity and Addition Equity Act of 2008 requires that group health plans provide mental health and substance abuse benefits in parity with medical and surgical benefits. Although the requirements are complex (a summary can be found here), the basic structure of the law is that both quantitative limitations (e.g., dollar and visit limits) and nonquantitative limitations (e.g., medical management techniques) applied to mental health and substance abuse benefits must be the same or better than the limitations applied to comparable medical and surgical benefits.
The new FAQs contain clarifying guidance related to disclosure of nonquantitative limitations. In particular, the Agencies stated that the criteria for medical necessity determinations with respect to both mental health and substance abuse benefits and medical and surgical benefits must be provided to current or potential participants or beneficiaries upon request. Plan administrators may not withhold medical necessity criteria on the basis that it is proprietary. However, plan administrators may offer participants a summary document describing the criteria in layperson’s terms. Nevertheless, this summary document cannot substitute for the actual guidelines, so the detailed criteria still must be provided when requested.
Employers and plan administrators should review their group health plan practices and procedures carefully in light of this new guidance.