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DOL’s ERISA Enforcement Activities Focus on Health Plan Compliance

In recent years, reports have indicated robust, and in some respects increasing, enforcement activities by the US Department of Labor (DOL) related to ERISA. The DOL recently issued its enforcement statistics for fiscal year 2019, and they are in line with what the DOL has reported in recent years. For fiscal year 2019, the DOL reported recoveries of $2.5 billion in direct payments to plans. This is a 56.25% increase over the previous year, and affirms that the DOL ERISA enforcement program remains very active and continues to find breaches of ERISA that require restorative payments by plan fiduciaries and others.


While much of the focus has been on the DOL’s enforcement related to retirement plans, and especially its missing participants initiative, the DOL also has an active enforcement program around health plans. And in the last few years, there are indications that the DOL’s health plan enforcement activities are an increasing DOL priority. There are a number of factors that may be driving the DOL’s health plan enforcement activities.


One factor may be congressional pressure. There have been recent press reports that since gaining control of the US House of Representatives, House Democrats have been focused on whether the DOL is doing enough to engage in ERISA investigations and enforcement, especially with respect to healthcare.


For example, in January there were press reports that all 28 Democrats on the House Education and Labor Committee asked the DOL for more information about the agency’s efforts regarding the Mental Health Parity and Addiction Equity Act (MHPAEA). MHPAEA requires parity in the application of certain limits on mental health benefits as compared to medical/surgical benefits. The DOL has investigatory jurisdiction over compliance with MHPAEA by ERISA plans.


Another factor is that since the passage of the Patient Protection and Affordable Care Act of 2010 (ACA), the DOL has made investigations of health plans, including with respect to ACA compliance, a national enforcement priority.  In 2012, the DOL launched the Health Benefits Security Project (HBSP), a national enforcement project to increase enforcement in this area. This initiative has since been renamed and is currently referred to as the Health Enforcement Initiative. The DOL has identified the initiative as being directed at multiple employer welfare arrangements (MEWAs), health benefit plans, insurance companies, and claim administrators.


The DOL recently identified three areas of particular focus for the initiative: (1) mental health parity compliance, (2) emergency services, and (3) health service providers’ self-dealing. These three areas involve the following:

  • The DOL’s mental health parity compliance enforcement effort is, as the name suggests, focused on MHPAEA compliance by ERISA plans, insurance companies, and plan administrators. The DOL has stated that its enforcement efforts are focused on evaluating treatment limitations that are imposed on benefits to treat opioid addiction and other substance use disorders, and limitations imposed on mental health and substance use disorder benefits. In accordance with the MHPAEA’s requirements, the investigations focus on cost sharing, benefit limitations, and administrative practices that could impact parity, such as medical necessity requirements, and testing completed to comply with the MHPAEA.

  • Another area of DOL focus is the payment of emergency room (ER) claims. One issue the DOL has been particularly focused on is claim administration that denies ER claims based solely on diagnosis without accounting for a participant’s presenting symptoms, or limiting the coverage of emergency services within a particular timeframe after the onset of symptoms.  The DOL has also stated that it is examining if out-of-network claims for emergency services are reimbursed appropriately according to the ACA. This is an area of significant DOL activity. Most notably, in July 2017, the DOL announced an agreement with a plan administrator to settle claims related to ER services for $14.5 million. The DOL alleged that the administrator violated ERISA because it made a determination regarding whether a participant was experiencing an emergency using a prudent layperson table without allowing the member to provide input on their presenting symptoms. Perez v. Magnacare Administrative Services, LLC et al. This specific topic—the use of tables to administer determinations of emergency care—has been an area of significant focus by lawmakers (including congresspersons), interest groups (including medical associations), and private litigants in recent years, including outside of the ERISA context.

  • The third area of DOL focus is service provider self-dealing, such as undisclosed, hidden, or excessive fees by service providers such as third-party administrators, insurance companies, and pharmacy benefit managers.

Because of these activities, ERISA plan administrators and service providers, including insurers and administrators, may want to consider—even before the DOL initiates an investigation—a fulsome review of ERISA compliance, including on such issues as MHPAEA and ACA compliance that are of most interest to the DOL.

If you have any questions about the DOL’s enforcement activities, please reach out to the author or your Morgan Lewis contact.


Article originally published: https://www.morganlewis.com/blogs/mlbenebits/2020/03/dols-erisa-enforcement-activities-focus-on-health-plan-compliance#page=1