To:Office of the Secretary and Chief of Staff to the Regents 1111 Franklin St.,12th floor Oakland, CA 94607
I am writing on behalf of [your organization name], an organization that [insert your mission/vision], to make sure that you are aware of recent regulatory fines and a landmark federal court decision involving health plans’ coverage of mental health and addiction treatment.
As head of [company name] that offers health insurance coverage to its employees and their families, you may be interested in these recent developments, both for their potential legal implications and the possibility that health insurers – including third party administrators of self-funded plans – may be wrongly denying your employees needed care.
A number of state insurance departments and attorneys general have recently issued fines against health insurers for violations of the federal Mental Health Parity and Addiction Equity Act of 2008 (Federal Parity Law) and state-based parity laws that mirror it. The Federal Parity Law and state equivalents require insurers to treat illnesses of the brain, such as depression and addiction, no more restrictively than illnesses of the body, such as diabetes and cancer.
Unfortunately, recent data from the actuarial firm Milliman has found huge disparities between insurers’ coverage of mental health and addiction treatment and their coverage of other medical conditions. The Milliman data is reinforced by findings from state officials who have examined mental health and addiction coverage and found numerous violations. Recent findings and fines include:
California – The Department of Managed Health Care has fined Kaiser Permanente millions of dollars over the past few years for violating parity and other mental health and addiction coverage laws.
Oregon – The Department of Consumer and Business Services fined Pioneer Educato
Similar violations are most certainly happening in other states. In fact, in a recent landmark legal decision, Wit v. United Behavioral Health(UBH), a federal judge in the Northern District of California ruled that UBH violated its fiduciary duty under the federal ERISA law by allowing financial considerations and a desire to “mitigate” the Federal Parity Law to guide the construction of deeply flawed medical necessity criteria that were used to determine coverage for mental health and addiction services. These criteria were inconsistent with generally accepted standards of care and resulted in the denial of mental health and addiction treatment services to more than 50,000 UBH members who were part of the Wit class action lawsuit.
Again, UBH – the largest managed behavioral health care company in the country – is most certainly not alone in its offenses. For [name of company], there could be substantial liability if its health plans are self-funded and its third-party administrator administers benefits in a way that violates federal law. Of course, there are also important questions to ask about the economic cost of employees not being able to seek help for mental health and addiction challenges as well. Mental health conditions such as depression and anxiety take a massive toll in the workplace. And untreated addiction, particularly opioid use disorder, is a major contributing factor to labor shortages. Any company that is not closely examining is mental health and addiction treatment insurance coverage is missing a key opportunity to improve staff well-being and productivity.
[Your organization name], urges you to take these issues seriously and ask your health insurance company or administrator the following questions:
What are you doing to ensure compliance with the federal and state parity laws?
How are you protecting me from legal decisions such as Wit v. United Behavioral Health?
How are you ensuring that my employees and their families have equal access to treatment for mental health and addiction concerns?
Thank you for your attention to this critical issue. For far too long, those with mental health and substance use disorders have faced a separate and unequal system of care. As life expectancy in the U.S. continues to decline largely due to overdoses and suicides, we must all do our part to hold insurers accountable. Nothing should stand in the way of getting help.