The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (“MHPAEA”) was enacted as part of the Emergency Economic Stabilization Act of 2008. In brief, MHPAEA does not require that health plans offer mental health or substance-use-disorder benefits, but does require parity for annual and lifetime limits on coverage if such benefits are offered and if the employer has more than 50 employees in the preceding calendar year (determined on a controlled group basis). The Mental Health Parity Act of 1996 (“MHPA”), the current federal law governing mental health parity requirements generally provides that if a group health plan or issuer offers both medical/surgical benefits and mental health benefits, the plan cannot contain lower lifetime or annual expenditure limits for mental health benefits. MHPAEA has extended MHPA’s requirements regarding lifetime and annual expenditure limits to substance-usedisorder benefits.
In addition, MHPAEA imposes new requirements on group health plans or issuers that offer both medical/surgical benefits and mental health or substance-use-disorder benefits relating to the plan’s financial requirements and treatment limitations, out-of-network providers and the availability of plan information.
- Financial Requirements. A group health plan’s or issuer’s financial requirements (e.g., deductibles, co-payments, coinsurance and out-of-pocket expenses) relating to mental health or substance abuse disorder benefits cannot be more restrictive than the most common financial requirements applied to substantially all medical and surgical benefits covered by the plan, and there can be no cost-sharing requirements that apply only to mental health or substance-use-disorder benefits.
- Treatment Limitations. A group health plan’s or issuer’s treatment limitations, including limits on the frequency of treatment, number of visits, days of coverage or other similar limits, applicable to mental health or substance abuse benefits cannot be more restrictive than the most common treatment limitations applied to substantially all medical and surgical benefits covered by the plan, and there can be no separate treatment limitations applied only with respect to mental health or substance-use-disorder benefits.
- Out-of-Network Parity. If a group health plan or issuer offering both medical/surgical benefits and mental health or substance-use-disorder benefits offers coverage for medical or surgical benefits provided by out-of-network providers, the plan (or coverage) must offer out-of-network coverage for mental health and substance-use-disorder benefits in a manner that is consistent with the overall requirements of the MHPAEA.
- Availability of Plan Information. Plan administrators or issuers must make the criteria for medical necessity determinations made under the plan with respect to mental health or substance use disorder benefits available to participants, beneficiaries or contracting providers upon request. Additionally, the reason for denial of mental health or substance use disorder benefits must be provided to participants and beneficiaries upon request.
MHPAEA is generally effective for plan years beginning after October 3, 2009 (e.g., January 1, 2010, for calendar year plans). Group health plans maintained pursuant to one or more collective bargaining agreements must comply with MHPAEA by the later of (i) January 1, 2009, or (ii) the date on which the last of the collective bargaining agreements relating to such group health plan terminates (determined without regard to any extension thereof agreed to after the date of MHPAEA’s enactment). Pursuant to MHPAEA, the Secretaries of Labor, Health and Human Services and the Treasury shall issue regulations to enforce the MHPAEA.
If an actuary determines that actual total plan (or coverage) costs increase by a certain percentage as a result of complying with MHPAEA, then the plan or issuer is exempted from complying with MHPAEA for one plan year. For the cost exemption to apply, plan (or coverage) costs must increase at least 2% in the case of the first plan year the exemption applies and 1% in the case of each subsequent plan year. Before seeking an exemption, a group health plan or issuer must comply with MHPAEA for the first six months of the plan year involved. A group health plan or issuer electing to utilize the exemption must inform the applicable Secretary of Labor, HHS or the Treasury, the appropriate state agencies, and participants and beneficiaries of such election.
Plan sponsors need to review their group health plans to ensure compliance with MHPAEA. If a plan sponsor offers both medical/surgical benefits and mental health or substance use disorder benefits, and if the mental health or substance use disorder benefits are more restrictive than medical/surgical benefits or impose higher cost-sharing requirements than those imposed on medical/surgical benefits, amendments to the plan documents and enrollment materials will be needed at a minimum. Due to the likely increased plan costs, plan sponsors may find that this is a good time to evaluate the plan design.