Solving
Disability Discrimination
of Health Plan Benefit Plans
The Department of Labor has instituted disability
nondiscrimination
regulations which may apply to those with "health factors." The
regulations
are
complex;
for example, they would prohibit a plan from refusing to enroll
participants
with a disabilty into the general medical benefits plan, but the
regulations
would not prohibit the exclusion of benefits for the treatment of the
disability
itself, so long as the exclusion applied to all members of the plan
equally. Similarly, limits on one therapy which apply to all
illnesses
would be acceptable. However, a plan cannot modify its
rules in response to a particular person's claims. This regulation
compliments the ADA which prohibits discrimitation against Americans
with Disabilities.
The regulation is based on a section of HIPAA, 29 U.S.C. sec.
1182, which states that a plan may not establish rules for
eligibility (including continued
eligibility) of any individual to enroll under the terms of the plan
based a health status of the individual or a dependent. The
regulation expands the statute by using an expansive view of
eligibility. Like the statute written by Congress, the regulation
does not mandate any coverage. State legislatures have mandated
certain coverages, such as minimum treatments for serious mental
illnesses, but these State-specific mandates do not apply to large
employer plans
which are self funded.
This law applies to health plans which are supplied by private
employers. Governmental employers may be covered, but some, such
as the City of Chicago, have opted out of the rules.
The basic rule is as
follows:
(b) Prohibited
discrimination in rules
for eligibility--(1) In general--
(i) A
group health plan, ..., may not establish any rule for eligibility ...of any individual to enroll for benefits
under the terms of the plan or group
health insurance coverage that discriminates based on any health factor* that relates to that individual or
a
dependent of that individual.
(ii) For purposes of this section, rules
for eligibility include ...
(A) Enrollment;
(B) The effective date of coverage;
(C) Waiting (or affiliation) periods;
(D) Late and special enrollment;
(E) Eligibility for benefit packages (including rules for individuals
to change their selection among benefit packages);
(F) Benefits (including rules relating to covered benefits, benefit
restrictions, and cost-sharing mechanisms such as coinsurance,
copayments, and deductibles);
(G) Continued eligibility; and
(H) Terminating coverage (including disenrollment) of any individual
under the plan.
Exceptions
This rule is subject to the
provisions of
paragraph (b)(2) (explaining how this rule applies to
benefits) [ie, no mandate for
any coverage]
paragraph (b)(3) (allowing plans to impose certain
preexisting condition exclusions),
paragraph (d) (containing rules for establishing groups
of similarly situated individuals),
paragraph (e) (relating to nonconfinement,
actively-at-work, and other service requirements),
paragraph (f) (relating to bona fide wellness
programs), and
paragraph (g) (permitting favorable treatment of
individuals with adverse health factors).
*Definition of Health
Factor
(a) Health factors. (1) The term health factor means, in relation to an
individual, any of the following health status-related factors:
(i) Health status;
(ii) Medical condition
Medical
condition or condition means any condition,whether physical or mental,
including, but not limited to, any condition resulting from illness,
injury (whether or not the injury is accidental), pregnancy, or
congenital malformation.
(iii) Claims experience;
(iv) Receipt of health care;
(v) Medical history;
(vi) Genetic information;
(vii) Evidence of insurability
Evidence of insurability
includes: conditions arising out of acts of
domestic violence; and participation in activities such as
motorcycling, snowmobiling, all-terrain vehicle riding, horseback
riding, skiing, and other similar activities.
or
(viii)
Disability.
--
(1) In general--(i) A group health plan, ... may not require an
individual, as a condition of enrollment or continued enrollment under
the plan or group health insurance coverage, to pay a premium or
contribution that is greater than the premium or contribution for a
similarly situated individual enrolled in the plan or group
health insurance coverag...based on any health factor that relates to
the individual or a dependent of the individual.
A plan is not required to
provide
coverage which would benefit a person with a disability.
The regulation states:
"(b)(2) Application to benefits--(i) General rule--
(A) Under this section,
a group
health plan ... is not required to
provide coverage for any particular benefit to any group of
similarly situated individuals.
(B) However, benefits provided under a plan ...
must be uniformly available to all
similarly situated individuals... Likewise,
any restriction on a benefit or benefits
must apply uniformly to all similarly situated individuals and
must not be directed at individual participants or beneficiaries based
on any health factor of the participants or beneficiaries ...
Thus, for example, a plan or issuer may
- limit or exclude benefits in relation to a specific
disease or
condition,
- limit or exclude benefits for certain types of
treatments or
drugs, or
- limit or exclude benefits based on a determination of
whether the
benefits are experimental or not medically necessary,
but only if the benefit limitation or exclusion
- applies uniformly to all similarly situated
individuals and
- is not directed at individual participants or
beneficiaries based
on any health factor of the participants or beneficiaries.
In addition, a plan
or issuer may
impose annual, lifetime, or other limits on benefits and may require
the satisfaction of a deductible, copayment, coinsurance, or other
cost-sharing requirement in order to obtain a benefit if the limit or
cost-sharing requirement applies uniformly to all similarly situated
individuals and is not directed at individual participants or
beneficiaries based on any health factor of the participants or
beneficiaries. ...
(Whether any plan provision or practice with respect to benefits
complies with this paragraph (b)(2)(i) does not affect whether the
provision or practice is permitted under any other provision of the
Act, the Americans with Disabilities Act, or any other law, whether
State or federal.)
(C) For purposes of this paragraph (b)(2)(i), a plan amendment
applicable to all individuals in one or more groups of similarly
situated individuals under the plan and made effective no earlier than
the first day of the first plan year after the amendment is adopted is
not considered to be directed at any individual participants or
beneficiaries."
For the more of the actual text of the regulation click
29 CFR
sec.
2590.702
Relation to the Mental Health Parity Act of 2008.
The
Paul Wellstone and Pete Domenici
Mental Health
Parity and Addiction Equity Act of 2008 was enacted in late
2008. Like the nondiscrimination rule discussed above, it does
not require plans to provide any particular coverage, but if the plan
does, then the benefits levels must be on par with general medical
benefits.
Important points:
- In general the law does not become effective to most
plans until
2010.
- The old Parity law restricted some caps on coverage,
but the new law
lifts caps, such as the number of visits per year payable and the
amount of copayment.
- The new law does not
require employers to cover mental illness or any other type of
illness. Companies can choose which
disorders to cover or not cover. If the plan does cover mental
illness, and if the
treatment is covered, then the copays and visit numbers must be the
same as
for general medical claims.
- Out-of-network mental coverage will apply in the same
way the
Plan covers medical out-of-network claims.
- Plans must supply the criteria for medical necessity
determinations.
- The Act does not give a solid definition of mental
health benefits.
- The Parity Act applies only to employers with more
than 50
employees.
- Part (b) of the Act also applies the new rule to
nonFederal
governmental employees (under the PHSA).
- Part (c) of the Act requires compliance for the plan
to retain
taxfree treatment under the Internal Revenue Code
- Part (d) of the Act requires Secretaries of Labor,
Health
and Human
Services, and the Treasury to write regulations.
- State's mental health laws stay in effect if they are
broader,
unless preempted by a self-funded employer plan.
- The law does not apply to nonemployer plans, which
are governed
by State insurance rules.
July 2010: The Federal government issues temporary "Safe Harbor"
regulations for the terms of a plan.
Until it issues final regulations, the Department of Labor has
establish an enforcement safe harbor: It will not take
enforcement action against a plan that divides its outpatient benefits
into two sub-classifications for the purpose of applying the financial
requirement and treatment limitation rules under the Parity Act (1)
office visits, and (2) all other outpatient items and services. After
the sub-classifications are established, the plan may not impose any
financial requirement or treatment limitation on mental health or
substance use disorder benefits in any sub-classification (
i.e., office visits or non-office
visits) that is more restrictive than the predominant financial
requirement or treatment limitation that applies to substantially all
medical/surgical benefits in the sub-classification. Other than
as permitted under this enforcement policy, sub-classifications are not
permitted when applying the financial requirement and treatment
limitation rules under Parity Act. Separate sub-classifications for
generalists and specialists are not permitted.
Summary: This Act is about parity, not coverage. Its benefits
extend if there is medical coverage, and employers and insurers can
exclude some diagnoses. They can also impose managed care and
precerticification rules to to the same extendt as the medical coverage.
Relation to Americans with Disabilities Act
Like HIPAA, the ADA requires that individuals with disabilities be
given equal access to employer-provided group health insurance. The
EEOC believes the ADA prohibits the use of coverage limitations or
exclusions that are "disability-based distinctions" unless it can be
shown that certain criteria are met. Specifically, it must be shown
that the insurance plan is within the protective ambit of § 501(c)
of
the statute in that it is a "bona fide" plan, that the disability-based
distinction is justified by the risks or costs associated with the
particular disability limited or excluded, and that all conditions with
comparable risks and costs are treated in the same way. See 42 U.S.C.
§ 12201(c); 29 C.F.R. §
1630.16(f).
A coverage distinction is disability-based if it singles out a
particular disability, a discrete group of disabilities (e.g., kidney
diseases, cancers), or disability in general.
copyright 2006, 2007,
2008, Frank
E. Stepnowski. No claim to original U.S. government
works.
Remember that every
case is different, and the rules are technical. Proving a case is
different from making an allegation. . Also, the law has
technical requirements which
may exclude those who are not qualified employeees or employers.
Please do not use
this article as definitive advice, as your situation
may vary, and the laws and statutes may change.
Nothing on this page creates an attorney client relationshiop
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