From: Elizabeth Leight [mailto:elizabeth@spbatpa.com] 

Sent: Wednesday, May 27, 2009 2:25 PM 

To: EBSA, E-OHPSCA - EBSA 

Subject: Comment on MHPAEA Request for Information 

 

May 27, 2009 

 

Office of Health Plan Standards and Compliance Assistance 

Employee Benefit Security Administration 

U.S. Department of Labor 

200 Constitution Avenue, N.W., N-5653 

Washington, D.C. 20210 

 

ATTN: MHPAEA Comments 

 

Filed Electronically 

E-OHPSCA.EBSA@dol.gov 

 

RE: Comment on MHPAEA Request for Information 

 

Dear Sir or Madam: 

 

The Society of Professional Benefit Administrators appreciates the 

opportunity to comment on the Mental Health Parity and Addiction Equity Act 

of 2008 (MHPAEA) Request for Information (RFI) under 29 CFR Part 2590 issued 

Aril 28, 2009. 

 

On behalf of third party contract administration firms, the Society of 

Professional Benefit Administrators wishes to express to you several 

concerns raised in the recently published Request For Information and we 

hereby submit the following comments. 

 

The Society of Professional Benefit Administrators (SPBA) is the largest 

national association representing independent third party administration 

firms who are responsible for the administration of the employee benefits of 

nearly forty percent of all United States workers. SPBA represents over 90 

percent of the firms which make third party contract administration of 

employee benefit plans their primary line of business. 

 

Third party administrators (TPAs) provide continuing professional outside 

claims and benefit plan administration for employers and benefit plans. 

TPAs very often become the "employee benefits office" for the covered 

workers of many small employers under 100 employees. The average TPA client 

employs some degree of self-funding and clients range from large 

Taft-Hartley union/management jointly-administered plans, customized plans 

for single employers of all sizes, and cost-effective plans designed for 

related groups of employers in trade associations and other multiple 

employer configurations. 

 

We commend the Department on its foresight in seeking information from 

private industry on the impact this change in the law will have on employers 

before issuing comprehensive regulations. Benefit administrators need 

immediate guidance from you on how to administer requests for legal and 

equitable coverage. As the preeminent representative of third party contract 

administration firms, SPBA wishes to discuss some of the unresolved 

questions, particularly as they relate to the responsibilities of employers, 
and this letter is meant to highlight those issues as well as the issues 

raised in your request for comments. 

 

TPAs who advise their clients have concerns in how the regulations can be 

interpreted. For example, the proposed regulations permit an employer to 

structure their plans to choose which disorders to cover, and are not 

required to cover the entire spectrum of illnesses identified by the 

American Psychiatric Association in the Diagnostic and Statistical Manual of 

Mental Disorders (DSM-IV). Employers and TPAs would like to see the DOL 

provide a list of acceptable coverage for mental illnesses or substance 

abuse disorders, to do otherwise will raise liability issues for employers 

and TPAs under the Americans with Disabilities Act for failing to cover an 

individual with a "perceived" mental disability. 

 

Hard to Define Statements 

We commend the Department in seeking additional clarification in the 

regulations to facilitate compliance. MHPAEA does not spell out the details 

of some very important terms, for example, when the law defines parity as 

behavioral coverage that is "no more restrictive than the predominant 

financial requirements applied to substantially all medical and surgical 

benefits," further clarification in interpretation is necessary to avoid 

uncertainty by plan sponsors. 

 

Separate but Equal-Out-of-Pocket Limits 

The Department should further clarify MHPAEA's application of the separate 

but equal calendar-year deductibles and out-of-pocket (OOP) limits for 

physical and behavioral healthcare. The Department should provide a clear 

guideline so employers can determine whether separate but equal deductibles 

and OOP limits exist. Additionally, the Department should provide examples 

where a single deductible and OOP limit across medical and behavioral 

benefits should be coordinated in the benefit administration. Clear examples 

in the regulations will provide a procedure for plans and employer sponsors 

to administer this provision accurately. 

 

Equivalents 

We applaud the Department for recognizing that there is a difference between 

physical healthcare conditions and behavioral healthcare services. One 

overriding challenge brought about by MHPAEA is that there appears to be few 

physical healthcare equivalents between providing behavioral healthcare 

services and physical healthcare in terms of practical hospital benefits. 

Adding to the confusion, for those plans that must comply with state laws, 

it is not clear how the plans will be affected by state law and how plans 

will be expected to comply. 

 

Out-Of-Network 

The new regulations require inclusion of out-of-network (OON) benefits that 

are provided for physical healthcare benefits. Previously, plans with OON 

behavioral benefits would have been managed through specific benefit limits 

and payment caps, but with MHPAEA's enactment, plans may no longer see 

unlimited OON behavioral benefits at payment levels upwards of 80% of usual 

and customary fees. Furthermore, the increase of OON benefits coverage could 

lead some providers to opt out of current networks (which have contracts at 

reduced fee levels) in favor of potential increases in their fees that would 

occur under OON benefits. In addition, certain providers, facilities or 

programs that have been exclusively private pay, may no longer serve as OON 

providers. This will further open the door to direct-to-consumer advertising 

by some providers similar to what has occurred in the drug industry. We 
request that the Department clarify and establish a simplified method for 

employer sponsored benefit plans to show how OON benefits are in compliance 

with the new regulations. 

 

Utilization Review 

Some plans have elected to let the limited benefit designs for behavioral 

benefits serve as a type of utilization management surrogate. With the new 

parity regulations, this approach will require employers to re-examine their 

benefit plans, as such this will necessitate additional time for compliance. 

 

Third Party Administrators are concerned about our abilities to advise 

employers on how they can determine medical necessity of care for mental, 

nervous and substance use disorder treatments. We request that the 

department establish a standard of review for treatment. Currently, plans 

employ utilization review for surgeries, in-patient stays, etc. However, 

mental, nervous and substance abuse treatment is difficult to quantify, 

unlike general surgical treatments. 

 

Utilization management practices have established working guidelines that 

show behavioral disorders can be covered without limitless cost and 

treatment horizons. With the requirement of full parity under MHPAEA 

however, the expanded coverage could raise incentives for over-utilization 

of services, especially for out-of-network services. We ask that the 

Department will provide benefit plans with additional time to benchmark 

their historical data of benefit utilization with behavioral care 

guidelines, including how different behavioral specialists can be used in 

networks and how various lower-cost step-down benefits can be utilized 

within their healthcare system without running into the parity wall. 

 

Provider and Provider networks 

We request that the Department clearly define "mental health provider". Will 

plans be expected to cover pastors, non-degreed counselors, social workers 

(who are not LCSW's), under the definition of "mental health provider"? 

Employer-sponsored plans are allowed to define the types of covered 

providers for other services, and would like to do the same for mental and 

nervous providers. 

 

Plans will need additional time to evaluate their provider networks for 

capacity implications and to determine whether their current provider 

network is deep enough to undertake overall parity. Employers will need to 

consider the size of their benefit plan, and the composition of benefits to 

meet the needs of plan participants--the relative numbers of psychiatrists, 

psychologists and social workers to meet the needs of the group. 

Employer-sponsored plans will need to determine the location of the 

population covered under the plan and relative to that, the availability of 

the providers in the network to meet their needs. Similarly, an inquiry will 

need to be made to determine the adequacy of their provider network and how 

plan participants use it as a means to determine equitable access to 

specialists. Because plan sponsors will need to expand their specialist 

networks and educate their covered population about their options for 

services, we seek additional time for implementation of this provision or at 

a minimum recognition of "good faith" compliance with the regulations. 

 

Pricing 

Wider use of consumer-driven health plans and high-deductible plans could 

result in reduced utilization of mental health services if consumers are 

unaware of their behavioral disorder or elect to defer treatment. Because 
plan sponsors must create incentives for plan participants to seek early 

treatment, additional time is necessary to implement this provision before 

small problems develop into something far worse with lack of treatment. 

 

Contacting with behavioral specialty providers will impact pricing. Managed 

behavioral healthcare, wellness and disease management companies have 

experience with behavioral healthcare specialists. An important 

consideration for pricing increased mental heath benefits involves the 

ability of the healthcare delivery and management system to effectively 

achieve healthy outcomes with reduced medical costs and increased 

productivity. Employee benefit plans will need to manage potential cost 

increases, but employers should be able to explore opportunities for 

reducing total healthcare costs by incorporating an integrated 

medical-behavioral healthcare approach into the health plan without fear of 

violating MHPAEA. 

 

Employee Assistant Programs (EAPs) 

TPAs work daily with employer plan sponsors on ways to provide benefits to 

their employees and to provide parity through their plans. Under the current 

regulations, it is unclear whether EAPs are included in the entities that 

are required to comply with parity. Our client plan sponsors tell us that 

EAPs address many personal issues for employees and result in improved 

productivity and reduced sick days. TPAs strive to educate employer plan 

sponsors that costs can be best kept in check by integrating the treatment 

of the body and the mind so that ailments missed in one don't transfer to 

the other without runaway costs. Some issues are related to mental health 

issues but many are related to legal, financial or work/life issues. 

However, if EAPs are required to comply with the parity mandate, it could 

limit the success EAPs play in the workplace today. Full parity will take 

time and additional time to implement some of these new measures will ensure 

that employer plan sponsors will do the right thing from the beginning 

rather than operating in a hit or miss process to meet the compliance 

deadline. 

 

Summary 

SPBA members indicate that current practices by their client employers 

adequately apprise employees of their responsibilities under MHPAEA. Third 

Party Administrators work vigorously to maintain employer regulatory 

compliance, however, as service contractors, they are given only as much 

data and duties as the Plan Administrator/Plan Sponsor wishes to extend. 

 

SPBA respectfully requests a generous good faith provision be provided to 

encourage employer plan sponsors to amend their plans and set forth 

provisions that will meet their employees needs at the outset. Further, it 

should be made clear that employers who act in good faith with this 

legislative and regulatory change will not be penalized if the law is later 

clarified in such a way that would require employer plan sponsors to modify 

their plans to be in compliance. A preference would be to indicate in the 

regulations that health plans may wait until their next annual plan renewal 

before the amendments based on clarifications are required. 

 

If the Department deems necessary a change in the current regulations, we 

further request that sufficient advance time be provided so that Third Party 

Administrators may provide guidance to employers to promote their 

understanding of their new responsibilities under the regulations. SPBA 

appreciates the opportunity to express our comments on this issue. It is 

respectfully requested that the recommendations cited above be considered in 
the final regulations. SPBA would like to reserve the opportunity to 

provide future comments when the final regulations are released. 

Additionally, if a hearing is scheduled, SPBA requests the opportunity to 

testify. As the preeminent representative of third party contract 

administration firms, SPBA would be happy to provide you with additional 

information or to respond to any additional questions arising as a result of 

this submission. Please contact me at 301-718-7722 if we can be of further 

assistance. 

 

Sincerely, 

 

Elizabeth Ysla Leight 

Director of Government Relations and Legal Affairs 

Society of Professional Benefit Administrators