California Expands Paid Sick Leave to Five Days Per Year

On October 4, 2023, California Governor Gavin Newsom signed Senate Bill 616 into law, officially expanding the Healthy Workplaces, Healthy Families Act of 2014, California’s paid sick leave law. Effective January 1, 2024, California employers must begin providing eligible employees with at least five days or 40 hours of paid sick leave, increased from the previous minimum of three days or 24 hours. Employers with combined paid time off policies should review and update their policies as needed.

Read more here.

States Move to Standardize Healthcare Licensing Requirements

Numerous states—including Alaska, Wisconsin, Ohio and Oregon—have been busy finalizing rulemaking and legislation advancing hybrid healthcare models, modernizing licensure infrastructures and incentivizing telehealth. What have these states been up to over the last month?

Read more here.

The Proposed MHPAEA Regulations: A Comment on the Comments

In our last post, we considered some of the comment letters submitted in response to proposed regulations under the Mental Health Parity and Addiction Equity Act (MHPAEA) issued by the US Departments of Labor, Health and Human Services and the Treasury (the Departments). Our previous MHPAEA content is available here.

The comment period for the proposed regulations closed on October 17, 2023. Stakeholders submitted more than 7,500 comments. While we have not read them all, we’ve seen enough to discern the broad contours. There are those in favor, those opposed and those that take some middle ground with recommended modifications. Among the latter, the modifications run the gamut from trivial to substantive. One particular comment generally approving of the rule but urging modifications caught our attention. It was submitted by the Brookings Institution, and it offered the following (at least in our view) useful insights.

Heterogeneity of Mental Health/Substance Use Disorder (MH/SUD) Benefits Versus Medical/Surgical (M/S) Benefits

The comment explains that roughly 41% of M/S visits are for chronic conditions, which are less likely to be subject to concurrent review. In contrast, between 64% and 69% of MH/SUD visits focus on treatment of mood disorders, anxiety disorders, psychoses and personality disorders, i.e., chronic recurring conditions. The comment notes: “Even if all chronic visits in general medical practice were subject to concurrent review, any concurrent review for mental health or substance use disorder services would fail the ‘substantially all’ test.” (Emphasis added)

The comment recommends that the Departments consider a more fine-grained method of comparing the use of nonquantitative treatment limitations (NQTLs) between MH/SUD benefits and those for M/S benefits.

Schematic Representation of NQTLs (and Why This Matters)

The comment expresses concern over the depth of the analysis that is required for each NQTL. Page four provides a useful schematic that fleshes out the particulars. The schematic makes the point that a substantial amount of effort is involved in demonstrating compliance for a single NQTL. The steps include “identifying which services apply [ ], identifying factors considered in the design of the NQTL, identifying sources used to define these factors, and demonstrating that the NQTL is applied no more stringently to mental health and substance use disorder benefits than medical/surgical benefits.”

Moreover, all steps must be repeated for each additional NQTL. While even a casual review of the proposal would lead the reader with the sense that compliance would be a challenge, the use of the visual schematic drives the point home visually.

The Exception for Independent Professional Medical or Clinical Standards

The proposed rule identifies two exceptions to the NQTL requirements, the first of which is based on “Independent Professional Medical or Clinical Standards.” While there is a good deal of disagreement as to its proper scope and even its utility, the Brookings comment worries that “the language in the proposed rule also opens the door to regulatory gaming because it is overly broad.” According to the comment: “If the goal of this provision is to promote adherence to established medical and clinical standards, there are a variety of other accountability mechanisms available that can address that issue more directly and would not present new opportunities for regulatory gaming.”

We previously speculated that the final rule that will look substantially like the proposed rule. Given the volume and the quality of at least some subset of the comment letters, we are now less certain of that claim.

IRS Announces 2024 Employee Benefit Plan Limits

On November 9, 2023, the Internal Revenue Service (IRS) announced cost-of-living adjustments to the applicable dollar limits for certain health and welfare plan benefits, including those for health flexible spending arrangements and commuter benefit plans, among other important updates. Employers, many of whom are in the midst of or have already completed open enrollment for 2024, will need to review these limits as soon as possible. Employer action may include, for example, determining whether enrollment portal updates and communications to participants are necessary. For employees who have already made 2024 elections without the benefit of the new dollar limits, employers may need to reach out to these employees to inform them of the new amounts and consider implementing a new election window.

See the 2024 limits.




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