“Substantially All” and “Predominant” Tests

Note:  A plan applies different copays to some of its outpatient, in-network medical/surgical benefits. What copay can the plan apply to outpatient, in-network MH/SUD benefits?

Step 1 –“Substantially All” Test –using a reasonable method, the plan projects plan payments to be $50 million. The plan projects plan payments for benefits that are subject to a copay to be $40 million. Because $40 million is greater than 2/3 of $50 million, a copay may be applied to MH/SUD benefits.

Step 2 –“Predominant” Test –The plan applies a $35 copay to some of its med./surg. benefits, and a $20 copay to other benefits. Using the same reasonable method as in the “Substantially All” Test, the plan projects plan costs of $25 million for the benefits to which the $35 copay applies and $15 million for the benefits to which the $20 copay applies. The $35 copay is the predominant copay because it applies to more than half of the med./surg. benefits subject to a copay.

Conclusion: The plan may impose any level of a copay for outpatient, in-network MH/SUD benefits that is no more restrictive than the $35 copay.