The 2022 report to Congress from the Department of Labor (DoL) on compliance by group health plans with the federal mental health parity laws identifies numerous instances of continued discrimination in coverage for treatment of mental health diagnoses.
Federal law generally prohibits insurers from discriminating against people who need coverage for treatment of mental health conditions. Basically, health insurers cannot have limitations that are more restrictive of treatment for a mental health condition than for other conditions. These rules have only become more important since the COVID-19 pandemic contributed to mental health issues for many Americans; for instance, the CDC noted a 30% increase of overdose deaths since the pandemic.
In large part for this reason, DoL has made enforcement of the mental health parity rules a priority in recent years. One new enforcement tool is a 2021 rule passed by Congress requiring health plans to provide DoL with a comparative analysis of treatment limitations for mental health conditions to help DoL ensure these practices follow the law.
DoL’s report identified many problems with health plans’ reporting about mental health parity. For instance:
- Failure to document comparisons of treatment limitations for mental health limitations before implementing those limitations;
- Lack of evidence or explanation for their assertions; and
- Failure to identify the specific benefits affected by mental health limitations.
DoL also noted that enforcing these reporting rules had led to the removal of several widespread insurer practices that violated the mental health parity rules.
For example, one major insurer was found to routinely deny certain behavioral health treatment for children with Autism Spectrum Disorder. This resulted in denying early intervention that could have lifelong results for autistic children. DoL found over 18,000 insureds affected by this exclusion.
Another example involved the systemic denial of treatment used in combatting the opioid epidemic. New research has found that combining therapy with medication can be more effective for treating opioid addiction than medication alone. DoL found a large health plan excluded coverage for this therapy in violation of the mental health parity rules.
Other treatments DoL’s report identified as being denied on a widespread basis in violation of the law included counseling to treat eating disorders, drug testing to treat addiction, and burdensome pre-certification requirements for mental health benefits.
DoL’s report is a reminder that discrimination on the basis of mental health related disabilities remains a part of the insurance business despite years of federal legislation to the contrary.
Washington State’s Office of the Insurance Commissioner (“OIC”) has had a busy March. The OIC, Washington State’s regulator responsible for overseeing insurance sold in Washington, issued several orders regarding discriminatory insurance pricing and the COVID pandemic.
First, the OIC banned insurers from using credit scores to price insurance. The insurance commissioner found the ban necessary to prevent discriminatory pricing in auto, renters, and homeowners insurance. Using credit scores to price insurance has been criticized as discriminatory because the practice results in low-income policyholders and people of color paying more for insurance. Auto insurance companies, for example, charge good drivers with low credit scores nearly 80% more for state-mandated auto coverage. This practice is anticipated to become even more egregious as COVID emergency protections expire this year, causing people who experienced financial hardship due to the pandemic to pay more for insurance merely because their credit scores have dropped. The insurance commissioner acted after legislation banning credit scores in insurance pricing failed to advance through the Washington State legislature.
Second, OIC extended certain emergency orders regarding COVID. These orders require health insurance companies to waive cost-sharing and protect consumers from surprise bills for COVID testing. The orders also require insurers to allow out-of-network providers to treat or test for COVID if the insurer lacks sufficient in-network providers. These orders were originally entered last year and are now extended to April 18, 2021. OIC also extended the requirement that insurers cover telehealth services.
Third, OIC responded to COVID vaccine misinformation. False reports have percolated that getting the COVID vaccine can void life insurance coverage or affect premiums or benefits. The OIC clarified that COVID vaccination will not harm your insurance eligibility.
Lastly, OIC gave an update on the effect of the American Rescue Plan Act on health insurance premiums for policies purchased on the Exchange (a/k/a “Obamacare” policies). OIC explained that the revisions in the new law reduces the percentage of income that people must pay for health coverage on an Exchange policy. The new law also increases subsidies for people receiving unemployment benefits and covers COBRA premiums for people who lost their job but want to keep their employer-sponsored coverage.
ERISA-governed insurance claims are subject to specific deadlines that claimants have to meet in order to protect their rights. Normally, the consequences of missing a deadline are draconian. For instance, appealing an ERISA claim denial even one day late can irrevocably waive the right to dispute the denial, no matter the reason for the delay.
The good news is that these deadlines have been relaxed in light of the COVID-19 pandemic. The Department of Labor, the federal agency responsible for overseeing ERISA-governed employee benefit plans, has issued an order extending certain ERISA claim deadlines due to the COVID-19 pandemic. This order comes pursuant to authority granted by Congress in the Coronavirus Aid, Relief, and Economic Security Act (a/k/a the “CARES” Act).
DOL is extending these deadlines so that plan participants, beneficiaries, and employers have additional time to make critical coverage and other benefit decisions during the pandemic. The upshot is:
- Disability insurance claimants have additional time to submit claims and appeal denied claims. These deadlines do not run during the period from March 1, 2020, until 60 days after the federal government announces the end of the current COVID-19 national emergency. That means an appeal that would normally be due next week might not be due until 60 days after the federal government announces the end of the national pandemic emergency.
- Group health plans have additional time to comply with COBRA continuation coverage deadlines. This is critical for employees recently laid off and looking for answers about continued health insurance coverage.
- Group health plans also have extra time to determine benefit claims; and
- ERISA plans have extra time to provide disclosures and notices required by ERISA, provided the plan acts in good faith and furnishes the disclosure or notice as soon as practicable under the circumstances, including through electronic means.
The Department of Labor has FAQs for ERISA claimants and participants regarding the deadline extensions.
These extensions will help employees and plan participants effectively safeguard their rights during the pandemic.
Here are some updates in the fast-evolving COVID-19 insurance world:
- Washington State’s insurance commissioner extended the deadline for insurers to file certain kinds of lawsuits over property insurance coverage. Most homeowners’ insurance policies require any lawsuit against the insurer be filed within a certain length of time from the loss (often one year). Missing the deadline can deprive the policyholder of their right to sue the insurer for any misconduct. The insurance commissioner’s order requires insurers to extend this deadline for certain claims where the policyholder is in the process of completing repairs. Since the residential construction industry has been shut down due to emergency “stay at home” orders, many folks have been unable to complete repairs on time. Extending this deadline will help these policyholders protect their rights.
- Washington’s insurance commissioner also warns against Medicare coronavirus scams. Scammers are targeting Medicare enrollees with bogus vaccines for the virus.
- Many states, mostly in the northeast for now, are considering legislation requiring insurers to provide coverage for businesses losing money because they cannot operate during the pandemic. For example, Pennsylvania’s proposed legislation requires commercial insurers providing so-called “business interruption coverage” to cover COVID-19 related losses. Many insurance policies are believed to exclude such losses unless such legislation becomes effective.
The COVID-19 pandemic is causing many types of insurance questions. Below is an FAQ on some insurance issues people may be dealing with during the pandemic. As always, it’s important to keep in mind that the specific facts and insurance policy language will vary from case to case. An FAQ can’t take the place of legal advice from consulting with an attorney directly. But hopefully this will help point you in the right direction.
Typical health insurance covers COVID-19 treatment just the same as any other illness. Washington’s Affordable Care Act (a/k/a Obamacare) exchange platform is allowing a special open enrollment period for qualified uninsured individuals to buy insurance on the state Exchange through April 8, 2020. This is an exception to the normal rule that you can only buy Exchange coverage during special periods.
There are also special rules for COVID-19 testing. The federal government designated COVID-19 testing as an essential health benefit, meaning that Medicaid and Medicare plans should cover testing. Washington’s Office of the Insurance Commissioner has ordered health insurers to cover COVID-19 testing without deductibles or cost-sharing. Also, insurers have to allow patients to refill necessary prescriptions regardless of the normal waiting periods.
Employees unable to work due to COVID-19 might have recourse under disability insurance policies. Disability coverage should provide benefits for folks who can’t work because they are sick. But, as always, the fine print matters. Many policies have waiting periods or other detailed rules for paying benefits. The specific rules will also depend on how you obtained coverage. Most folks get disability insurance from their employer, and will have to navigate the special claims procedures under ERISA. For folks who bought their policies themselves, claims will be governed by Washington State law which is generally more policyholder-friendly.
Business Loss Insurance
Businesses who close or lose revenue because of the pandemic or the state-ordered lockdown might have claims for business interruption coverage. This coverage is often provided by standard commercial insurance policies. These claims depend heavily on the specific policy language and facts. For example, some policies require actual physical damage to property before paying business interruption benefits. Other policies might require the business be closed by the authorities. It is also important to be able to document the specific losses incurred under business interruption coverage.
Know Your Rights
Anyone who thinks they have insurance coverage related to COVID-19 should be on top of their rights. In disasters like this pandemic, insurers often cut corners or underpay claims. Washington State insurance policyholders have important rights, including the right to a full, fair, and prompt investigation of their claim at the insurer’s expense. Insurers also have a duty to fully disclose all the potential coverage that you might have.
Finally, here are some resources for non-insurance issues relating to the pandemic: