Final Regulations Issued under the Mental Health Parity and Addiction Equity Act of 2008
This is from
Alden Bianchi at Mintz Levin:
On November 13, 2013, the Departments of the Treasury, Labor and Health and Human Services (the “Departments”) issued final regulations under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). MHPAEA expanded previous federal mental health parity requirements to require that the conditions of coverage for behavioral health, in terms of the limitations placed on treatment and cost-sharing requirements, be no more restrictive than for coverage of medical and surgical benefits. The final regulations, which take effect for plan years commencing on and after January 1, 2014, impose standards for mental health or substance use disorder (MH/SUD) benefits that will affect most group health plans and health insurance issuers in the group insurance market and — as a result of the Patient Protection and Affordable Care Act (the “Affordable Care Act”) — qualified health plans (i.e., plans designated as “bronze,” “silver,” “gold,” and “platinum” marketed through public insurance exchanges), Medicaid non-managed care benchmark and benchmark-equivalent plans, and plans offered in the individual insurance market.
Background
The Mental Health Parity Act of 1996 (MHPA) required generally that group health plan annual or lifetime dollar limits on mental health benefits be no less restrictive than annual or lifetime dollar limits that applied to medical and surgical benefits. The goals and scope of MHPA were modest: it addressed only annual or lifetime dollar limits on mental health benefits. Cost sharing was unaffected. Thus, plans could require higher co-pays, deductibles, and out-of-pocket maximums on mental health benefits. MHPA did not mandate the coverage of substance abuse disorders, and plans and issuers were generally free to impose maximum numbers of provider visits and/or caps on the number of mental health treatment days. Nor did MHPA apply to group health plans or coverage offered by employers with fewer than 50 employees or in cases where its application resulted in an increase in the cost under the plan or coverage of at least one percent. ...
Parity for financial requirements and treatment limitations
The basic parity rule for financial requirements and treatment limitations provides as follows:
A group health plan (or health insurance coverage offered by an issuer in connection with a group health plan) that provides both medical/surgical benefits and mental health or substance use disorder benefits may not apply any “financial requirement” or “treatment limitation” to mental health or substance use disorder benefits in any “classification” that is more restrictive than the “predominant financial requirement” or “treatment limitation” of that type applied to “substantially all” medical/surgical benefits in the same classification.
The term “medical/surgical benefits” means benefits for medical or surgical services, as defined under the terms of the plan and in accordance with applicable federal and state law, but it does not include mental health or substance use disorder benefits. The terms “mental health benefits” and “substance use disorder benefits” mean benefits with respect to services for mental health conditions or substance use disorders, respectively, also as defined under the terms of the plan and in accordance with applicable federal and state law. In each case, whether they cover medical/surgical services or services for mental health conditions or substance use disorders, the benefits must be consistent with generally recognized standards of current medical practice. ...
Exceptions
MHPAEA requirements do not apply to non-federal governmental plans that have 100 or fewer employees or employers with 50 or fewer employees. The Affordable Care Act extends MHPAEA’s requirements to the small group and individual market. Qualified Health Plans offered through the public insurance exchanges must include coverage for mental health and substance use disorders as one of the ten categories of essential health benefits. For MHPAEA purposes, a small group is defined as an employment-based plan that includes no more than 50 employees. Under the Affordable Care Act, however, beginning in 2016, small group plans will mean plans maintained by an employer with fewer than 100 employees on average business days in the prior calendar year. Following precedent established by a 2010 FAQ, the final regulations treat group health plans of employers with 50 or fewer employees as exempt from the MHPAEA.
MHPAEA requirements also do not apply to retiree-only plans, TriCare, Medicare, and traditional Medicaid (fee-for-service, non-managed care). Prior to the Affordable Care Act, self-funded non-federal governmental employers were permitted to opt-out of the requirements of MHPAEA. The Affordable Care Act eliminated this election. Thus, after January 1, 2014, non-federal governmental employers are subject to the requirements of MHPAEA.
Large groups may qualify for an exemption from MHPAEA based on increased cost. Where the cost to a large group health plan sponsor of complying with MHPAEA results in an increased cost of at least two percent in the first year that MHPAEA applies to the plan (i.e., the first plan year beginning after October 3, 2009) or at least one percent in any subsequent plan year, the sponsor may apply for a one-year exemption from MHPAEA based on increased cost. Where the increased cost thresholds are exceeded and the application is approved, the plan is exempt from MHPAEA requirements for the plan year following the year the cost was incurred. Plan sponsors that qualify for the increased cost exemption must notify plan participants and beneficiaries that MHPAEA does not apply to their coverage. Once the exemption expires, the plan may reapply if the plan incurs an increased cost of at least one percent in a subsequent plan year. ...
