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The Mental Health Parity and Addiction Equity Act
Interim Rule - Federal Register
Regulations clarify mental health parity act
Benefit of Parity Law
Explanation of health care benefits compared to existing Illinois law
 

If you have concerns about your employer's plan's compliance with MHPAEA, contact help line at
1-877-267-2323 extension 6-5511 or at phig@cms.hhs.gov.

The Mental Health Parity and Addiction Equity Act

Introduction:  The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) is a federal law that provides participants who already have benefits under mental health and substance use disorder (MH/SUD) coverage parity with benefits limitations under their medical/surgical coverage.  MHPAEA may apply to two different types of coverage:

1)  Large group self-funded group health plans (CMS has jurisdiction over self-funded public sector (non-federal governmental) plans, while the Department of Labor (866-444-3272) has jurisdiction over private sector self-funded group health plans.);

2)  Large group fully insured group health plans.

New!  On February 2, 2010, regulations implementing MHPAEA were published.  See information below and new materials in the "Related Links Inside CMS" and "Related Links Outside CMS".

MHPAEA and Health Coverage: Contact your state's insurance department to find out about whether additional protections apply to your coverage if you are in a fully insured group health plan or have individual market (non-employment based) health coverage.

Medicare and Medicaid are not issuers of health insurance.  They are public health plans through which individuals obtain health coverage.  Medicaid Managed Care plans, however, are subject to the MHPAEA statute.  Contact your specific Medicare or Medicaid contractor to discuss your level of benefits.

Employment-related group health plans that provide benefits through insurance are known as fully insured group health plans. Employment-related group health plans that pay for coverage directly, without purchasing health insurance from an issuer, are called self-funded group health plans. Contact your plan administrator to find out if your group coverage is fully insured or self-funded. 

MHPAEA may prevent your large group health plan from imposing financial requirements and treatment limitations on MH/SUD benefits that are more restrictive than financial requirements and treatment limitations on medical/surgical benefits.  MHPAEA also may prevent your large group health plan from placing annual or lifetime dollar limits on MH/SUD benefits that are lower - less favorable - than annual or lifetime dollar limits for medical/surgical benefits offered under the plan. 

MHPAEA does NOT apply to small group health plans or health insurance coverage in the individual (non-employment based) market, but you should check to see if your state law requires mental health parity in such other cases. (Visit www.ncsl.org, on the right hand side of the page enter "mental health parity" then select "State Laws Mandating or Regulating Mental Health Benefits" in order to view State specific information.) MHPAEA applies to most group health plans with more than 50 workers. 

Summary of MHPAEA Protections:  The Mental Health Parity Act of 1996 (MHPA) states that a group health plan may not impose annual or lifetime dollar limits on mental health benefits that are less favorable than any such limits imposed on medical surgical benefits.

MHPAEA preserves the MHPA protections, and adds significant new protections.  Although the law requires "parity", or equivalence, with regard to annual and lifetime dollar limits, financial requirements and treatment limitations, MHPAEA does NOT require large group health plans and their health insurance issuers to include MH/SUD benefits in their benefits package.  The law's requirements apply only to large group health plans and their health insurance issuers that already include MH/SUD benefits in their benefit packages.

Key changes made by MHPAEA, which is generally effective for plan years beginning after October 3, 2009, include the following:

• If a group health plan includes medical/surgical benefits and mental health benefits, the financial requirements (e.g., deductibles and co-payments) and treatment limitations (e.g., number of visits or days of coverage) that apply to mental health benefits must be no more restrictive than the predominant financial requirements or treatment limitations that apply to substantially all medical/surgical benefits;

• If a group health plan includes medical/surgical benefits and substance use disorder benefits, the financial requirements and treatment limitations that apply to substance use disorder benefits must be no more restrictive than the predominant financial requirements or treatment limitations that apply to substantially all medical/surgical benefits;

• MH/SUD benefits may not be subject to any separate cost sharing requirements or treatment limitations that only apply to such benefits;

• If a group health plan includes medical/surgical benefits and mental health benefits, and the plan provides for out of network medical/surgical benefits, it must provide for out of network mental health benefits;

• If a group health plan includes medical/surgical benefits and substance use disorder benefits, and the plan provides for out of network medical/surgical benefits, it must provide for out of network substance use disorder benefits;

• Standards for medical necessity determinations and reasons for any denial of benefits relating to MH/SUD must be disclosed upon request; 

• The MHPA parity requirements under existing law (regarding annual and lifetime dollar limits) continue and are extended to substance use disorder benefits.

 

Exceptions:  There are three exceptions to the MHPAEA requirements:

• MHPAEA requirements do not apply to small employers who have between 2 and 50 employees;

• Large group health plan sponsors that meet the requirements stated in the MHPAEA download below (Section 512(a)(2) Cost Exemption) and demonstrate that compliance with MHPAEA increases their claims by at least two percent in the first year (one percent in subsequent years) may request exemption from the MHPAEA based on their cost exemption. Subsequently, the plan sponsors may notify the plan beneficiaries that MHPAEA does not apply to their coverage; and

• A nonfederal governmental employer that provides self-funded group health plan coverage to its employees (coverage that is not provided through an insurer) may elect to exempt its plan (opt-out) from the requirements of MHPAEA by following the Procedures & Requirements posted on the Self-Funded Nonfederal Governmental Plans webpage (see Related Links Inside CMS), then issuing a notice of opt-out to enrollees at the time of enrollment and on an annual basis. Thereafter, the employer must also file the opt-out notification with CMS.

A regulation implementing MHPAEA was published in the Federal Register on February 2, 2010. The regulation, which is an interim final rule, is effective April 5, 2010 and applies to plan years beginning on or after July 1, 2010. There is a comment period which closes on May 3, 2010.  A link to the full text of the regulation is below.

The regulation applies to group health plans of employers with more than 50 employees. It does not apply to group health plans of smaller employers nor does it apply to individual health insurance plans. It, like the statute, does not require group health plans to provide mental health or substance use disorder benefits. But if they do, the financial requirements and treatment limitations that apply to MH/SUD benefits cannot be more restrictive than the predominant restrictions and requirements that apply to substantially all the medical/surgical benefits.

The provisions of the regulation include the following:

1. The parity requirements must be applied separately to six classifications of benefits: inpatient in-network; outpatient in-network; inpatient out-of-network; outpatient out-of-network; emergency; and prescription drug. In other words, the substantially all/predominant test must be applied separately to restrictions and requirements in each classification. The regulation includes examples that explain how the substantially all/predominant test is applied in each classification. Additionally, although the regulation does not require plans to cover MH/SUD benefits, if they do, they must provide MH/SUD benefits in all classifications in which medical/surgical benefits are provided.

2. The regulation requires that all cumulative financial requirements, including deductibles and out-of-pocket limits, must integrate both medical/surgical and MH/SUD benefits.

3. The regulation distinguishes between quantitative treatment limitations and non-quantitative treatment limitations. Quantitative treatment limitations are numerical such as visit limits and day limits. Nonquantitative treatment limitations include medical management, step therapy and pre-authorization. There is an illustrative list of nonquantitative treatment limitations in the regulation. A group health plan cannot impose a nonquantitative treatment limitation with respect to MH/SUD benefits in any classification unless, under the terms of the plan as written or in operation, any processes, strategies, evidentiary standard, or other factors used in applying the nonquantitative treatment limitations to MH/SUD benefits to MH/SUD in a classification are comparable to and applied no more stringently than what is applied to medical/surgical benefits except to the extent that recognized clinically appropriate standards of care may permit a difference.

If you have concerns about your employer's plan's compliance with MHPAEA, contact our help line at 1-877-267-2323 extension 6-5511 or at phig@cms.hhs.gov.