On February 2, 2010 the Internal Revenue Service, Employee Benefits Security Administration and the Department of Health and Human Services issued interim final rules implementing the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). The Act requires parity between mental health or substance use disorder benefits (previously known as substance abuse benefits) and medical/surgical benefits with respect to financial requirements and treatment limitations under group health plans and health insurance coverage in connection with a group health plan. These rules will be effective April 5, 2010 and generally apply to group health plans and group health insurance issuers for plan years beginning on or after July 1, 2010.
The Mental Health Parity Act of 1996 (MHPA) amended sections of the Employee Retirement Security Act, the Public Health Service Act and the Internal Revenue Code to require parity in aggregate lifetime and annual dollar limits for mental health benefits and medical and surgical benefits. MPHAEA amends the same sections of those laws and imposes additional requirements as well.
Perhaps the most significant change is that MHPAEA now extends the parity requirement to substance use disorder benefits. The original MHPA expressly excluded substance abuse or chemical dependency benefits from its parity requirements. This expansion of parity requirements will impact most group health plans that have to this point provided substance abuse benefits that are typically more restrictive than the mental health or medical/surgical benefits provided under the plan.
MHPAEA’s parity requirements apply to aggregate lifetime and annual dollar limits imposed by the group health plan as well as financial requirements and treatment limitations. Aggregate lifetime and annual dollar limits means dollar limitations on the total amount of specified benefits that may be paid under the group health plan or health insurance coverage. Financial requirements include deductibles, copayments, coinsurance and out-of-pocket maximums. Treatment limitations include limits on benefits based on the frequency of treatment, number of visits, days of coverage, days in a waiting period, or other similar limits on the scope or duration of treatment. Treatment limitations may be quantitative, meaning the limitation is expressed numerically (eg., 50 visits per year) or nonquantitative, meaning the limitation is defined in terms of medical management standards, formulary design for prescription drugs, methods for determining usual, customary and reasonable charges, step-therapy protocols or exclusions based on failure to complete a course of treatment. These regulations prohibit a plan or health insurance coverage from applying any financial requirements or treatment limitations to mental health or substance use disorder benefits in any classification that is more restrictive than the predominant financial requirement or treatment limitation applied to substantially all medical/surgical benefits in the same classification. The regulations describe how to assess a plan’s benefit design with respect to the “more restrictive” and “substantially all” requirements.
The regulations also provide numerous examples of how MHPAEA’s parity requirements would work in different scenarios. The examples indicate, for example, that a plan may not require concurrent review of in-patient mental health and substance use disorder benefits if the plan only requires retrospective review of in-patient medical/surgical benefits. Similarly a plan may not apply different benefit penalties for failure to obtain prior approval to mental health and substance use disorder benefits than apply to failure to obtain prior approval for medical/surgical benefits. This appears to mean that group health plans cannot require participants to access mental health benefits through an employee assistance plan, unless a similar requirement applies to medical/surgical benefits.
The regulations also clarify that group health plans cannot have separate deductibles for mental health benefits.
The issuing agencies are requesting public comments on these regulations on or before May 3, 2010. The regulations are available at http://www.dol.gov/federalregister/HtmlDisplay.aspx?DocId=23511&AgencyId=8&DocumentType=2
