Benefits and Compensation

Prohibited Restrictions and Rescission Clarified in Agency FAQs

Compliance with preventive health service requirements and other mandates of the health care reform law, along with disclosure obligations involving mental health parity requirements for health plans, were addressed in frequently asked questions issued by the U.S. Departments of Labor, Health and Human Services and Treasury on April 20.

Affordable Care Act compliance issues covered in FAQs about Affordable Care Act Implementation – Part 31 include:

  • Plans and insurers may not impose cost sharing for the bowel preparation medications administered before preventive-screening colonoscopies are performed.
  • Plans may not retroactively terminate coverage by 2 months to exclude summer months under a school year calendar, when the work assignment lasted 10 months but the plan year was 12 months long.

Example. A teacher who had paid 12 months of premiums announced on her last day of coverage that she did not intend to renew her contract; her last day actually working was two months before).

Such a rescission of coverage is prohibited because (i) it had retroactive effect, (ii) it was not attributable to a failure to pay premiums on time, and (iii) there was no fraud or intentional misrepresentation.

  • Coverage for chemotherapy may not be limited just because it is being given in connection with a patient’s participation in a clinical trial for a new anti-nausea drug. The chemo must be covered the same as it would have been without the clinical trial, if it typically would be covered, and was not: (1) experimental, investigational or the same service being studied in the approved clinical trial; (2) an item or service provided solely to satisfy the clinical trial’s data collection and analysis needs; or (3) clearly inconsistent with widely accepted clinical standards of care.

In addition, a plan that typically covers items and services to diagnose or treat complications may not deny coverage of these items and services to treat side effects from chemotherapy being administered through an approved clinical trial.


Several of the FAQs discuss various requirements of the Mental Health Parity and Addiction Equity Act, which generally requires parity in financial requirements and treatment limitations between mental health/substance use disorder benefits and medical/surgical benefits.

One question was from a health care provider acting on behalf of a plan participant. The plan had asked the provider to complete a preauthorization form for the patient’s mental health treatment. MHPAEA requires plans to disclose certain documents, and the provider asked which ones would be most helpful to verify the plan’s compliance with MHPAEA.

The agencies responded that the plan would have to furnish the following documents if the provider requested them:

  • An ERISA summary plan description or similar summary information for non-ERISA plans.
  • Specific plan language on non-quantitative treatment limitations (such as a preauthorization requirement).
  • Information on how the NQTL applies to medical/surgical benefits.
  • All processes, evidentiary standards, and other evidence that went into determining that the NQTL applied to this particular mental health benefit, and the extent to which the limit also applied to medical/surgical benefits.
  • Any analyses on how the NQTL complies with the MHPAEA.

The FAQ states:

For example, if the plan can demonstrate that it imposes pre-authorization requirements for both [mental health] and medical-surgical benefits in the outpatient, in-network classification when the length of treatment for a condition exceeds the national average length of treatment by 10 percent or more, it has identified a factor on which the non-quantitative coverage limitation is based.

Since the plan requires a pre-authorization form after the patient’s eighth mental health visit, the plan would want to prove that the national average length of outpatient treatment for this diagnosis is eight visits, the FAQ said. Also, when seeking to enforce its limit, the plan needs to produce documentation on how the rules for medical/surgical benefits were developed and applied, and demonstrate that they’re not being applied to mental health benefits more stringently than to medical/surgical benefits. A plan may not withhold its standards for doing so on the basis that the information is proprietary or commercially valuable.

Another FAQ indicated that plans are expected to cover medication-assisted detoxification and/or maintenance treatment in combination with behavioral health services for opioid addiction.


The last FAQ told plans that if they provide benefits for mastectomies, then they should not refuse to pay for nipple and areola reconstruction, including repigmentation, as required reconstructive procedures. Under the Women’s Health and Cancer Rights Act, deductibles and coinsurance for such procedures would have to be consistent with other plan/coverage benefits.

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