On October 3, 2008, the Mental Health Parity Act, officially titled The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (Act), became law as part of the Emergency Economic Stabilization Act of 2008. The Act amends the Employment Retirement Income Security Act (ERISA) and the Public Health Service Act to prohibit employers’ health plans from imposing any caps or limitations on mental health treatment or substance use disorder benefits that are not applied to medical and surgical benefits.
The Act’s requirements take effect for group health plans with plan years beginning on or after October 3, 2009 (one year after the date of enactment). For calendar-year plans, the effective date will be January 1, 2010. For plans subject to collective bargaining agreements ratified before the October 3, 2008 enactment date, the Act applies when the plans terminate or January 1, 2009, whichever date is later.
The Act does not require health insurance plans to provide mental health or substance use disorder benefits. However, for those group health plans of 50 or more employees who choose to provide mental health and substance use disorder benefits, the Act does require parity with medical and surgical benefits.
Requirements
Specifically, the Act requires group health plans that provide both medical and surgical benefits and mental health and substance use disorder benefits to ensure that financial requirements and treatment limitations applicable to mental health and substance use disorder benefits are no more restrictive than the financial requirements, and treatment limitations, applied to medical and surgical benefits. Thus, requirements such as copayments and deductibles, and limitations such as number of visits or frequency of treatments, can be no more restrictive on mental health and substance use disorder benefits than those requirements or limitations imposed on medical and surgical benefits. In addition, under the Act, group health plans may not apply separate cost-sharing requirements or treatment limitations that are applicable only with respect to mental health or substance use disorder benefits.
The Act also requires group health plans to provide out-of-network coverage for mental health and substance use disorder benefits if out-of-network coverage is provided by the plans for medical and surgical benefits.
The Act requires the group health plan administrator to make available to participants, beneficiaries, or providers, the criteria for medical necessity determinations, upon request. Moreover, the reasons for any denial of reimbursement or payment for services with respect to mental health or substance use disorder benefits also must be made available by the group health plan administrator to participants or beneficiaries upon request.
Exemptions
Employers with 50 or fewer employees are exempt from the requirements of the Act. However, they may continue to be subject to state parity laws.
The Act also provides a cost exemption for group health plans where application of the Act results in an increase in actual total costs, with respect to medical and surgical benefits and mental health and substance use disorder benefits, of two percent for the first plan year and one percent for each subsequent plan year. The Act requires determinations for such an exemption to be made by a qualified and licensed actuary after the group health plan has complied with the Act for the first six months of the plan year. The group health plan shall promptly notify the Secretary of the U.S. Department of Health and Human Services (the Secretary) (or the U.S. Department of Labor if self-funded), the appropriate state agencies, the participants, and beneficiaries, when it elects to implement the exemption. A group health plan’s notification to the Secretary will be confidential. When a group health plan elects the exemption, the Secretary and the appropriate state agency are authorized by the Act to audit the books and records of the group health plan to determine compliance with the Act.
Reports
By 2012, and every two years thereafter, the Secretary shall submit to the U.S. Congress a report on group health plan compliance with the Act. The results of any surveys or audits of compliance of group health plans, and an analysis of the reasons for any failure to comply if applicable, shall be included in the Secretary’s report. The Act further requires the Secretary to publish and disseminate guidance and information for group health plans, participants, beneficiaries, applicable state agencies, and the National Association of Insurance Commissioners concerning the Act’s requirements.
The Act also directs the Comptroller General of the United States to report to Congress on group health plans’ rates, patterns, and trends in coverage and exclusion of mental health and substance use disorder diagnoses.
Conclusion
The Act, when effective, will prohibit group health plans of 50 or more employees that provide mental health and substance use disorder benefits from imposing limitations on such benefits that also are not applied to medical and surgical benefits.
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Michael M. Biehl Tina E. Dunsford Renate M. Gray |
Shirley P. Morrigan J. Mark Waxman |
