On January 29, 2010, the U.S. Departments of Labor ("DOL"), Health and Human Services ("HHS") and the Treasury jointly issued interim final regulations implementing the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 ("MHPAEA"). The MHPAEA, as implemented by the interim final regulations, greatly expands the parity standards of its predecessor, the Mental Health Parity Act of 1996 ("MHPA 1996").
The MHPA 1996 required group health plans to apply the same aggregate lifetime and annual dollar limits to mental health and medical benefits, but notably, did not extend its protections to substance-use disorder benefits. The MHPAEA, as implemented by the interim final regulations, expands on the requirements of the MHPA 1996 and introduces new rules that prohibit group health plans from creating disparities between medical/surgical benefits and mental health benefits, as well as substance-use disorder benefits. The MHPAEA, however, does not require group health plans to offer mental health or substance-use disorder benefits, but group health plans that offer these types of benefits will be required to comply. Under the interim final regulations, group health plans:
- Must satisfy certain requirements before imposing an aggregate lifetime or annual dollar limit on mental health or substance-use disorder benefits, including certain requirements regarding the calculation of the aggregate lifetime or annual dollar limit
- That provide mental health or substance-use disorder benefits in any benefit classification (e.g., in-network and out-of-network inpatient, in-network and out-of-network outpatient, emergency care and prescription drugs) must also provide mental health or substance use disorder benefits that are on par with the medical/surgical benefits provided in that classification
- Are not permitted to apply any financial requirement (e.g., co-pay, co-insurance, or deductible) or treatment limitation to mental health or substance-use disorder benefits in any classification that is more restrictive than the predominant financial requirements or treatment limitation of that type applied to substantially all medical/surgical benefits in the same classification
- Are not permitted to apply a separate cumulative financial requirement, such as a deductible, or treatment limitation, such as a visit limit, to mental health or substance-use disorder benefits
- Must consistently apply any nonquantitative treatment limitations (e.g., medical necessity, experimental, etc.) to mental health and substance-use disorder and medical/surgical benefits
- Must satisfy certain disclosure requirements with regard to medical necessity determinations and denials of mental health or substance-use disorder claims
The interim final regulations generally apply to group health plans and group health insurance issuers for plan years beginning on or after July 1, 2010, subject to certain exceptions. These exceptions include (i) the exclusion of employers with fewer than 50 workers, and (ii) an opt-out provision for certain nonfederal governmental employers. However, calendar-year health plans were subject to the statutory provisions of the MHPAEA as of January 1, 2010. Employers who comply with the interim final regulations prior to the effective date arguably will have shown a good faith effort to comply with the statutory provisions of the MHPAEA.
We recommend that employers analyze their health plans in light of the interim final regulations and prepare to make necessary changes.