Final Rule Implementing Mental Health Parity Requirements

The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) is a federal law that generally prevents group health plans and health insurance issuers that provide mental health and substance use disorder (MH/SUD) benefits from imposing less favorable benefit limitations on those benefits than on medical and surgical coverage.

On Nov. 8, 2013, the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (the Departments) jointly issued a final rule implementing the MHPAEA. The final rule increases parity between MH/SUD benefits and medical and surgical benefits in group and individual health plans.

This rule finalizes an MHPAEA interim final rule, which was published on Feb. 2, 2010, and applies for plan years beginning on or after July 1, 2010. The mental health parity provisions of the final rule apply for plan or policy years beginning on or after July 1, 2014. Until the final rule becomes applicable, plans and issuers must continue to comply with the mental health parity provisions of the interim final regulations.

In conjunction with the final rule, the Departments also issued FAQs regarding implementation of the MHPAEA, as amended by the Affordable Care Act.

Background on the MHPAEA

Under the MHPAEA, the financial requirements and treatment limits that group health plans and health insurance issuers apply to MH/SUD benefits generally cannot be more restrictive than those applicable to medical and surgical benefits. The MHPAEA supplemented the Mental Health Parity Act of 1996 (MHPA), which required parity with respect to aggregate lifetime and annual dollar limits for mental health benefits. The MHPAEA also extended the parity requirements to substance use disorder benefits.

The MHPAEA generally became effective for plan years beginning on or after Oct. 3, 2009 (Jan. 1, 2010, for calendar year plans). The MHPAEA generally applies to plans sponsored by employers with more than 50 employees, including self-insured plans and fully-insured arrangements.

The MHPAEA does not require large group health plans and their health insurance issuers to cover MH/SUD benefits. The MHPAEA's requirements apply only to large group health plans and their health insurance issuers that choose to include MH/SUD benefits in their benefit packages.

However, other state and federal laws may require a plan to provide these benefits. The health care reform law, the Affordable Care Act (ACA), builds on the MHPAEA and requires some plans to cover MH/SUD services as one of ten essential health benefits categories. Specifically, non-grandfathered health plans in the individual and small group markets are required to provide essential health benefits (which include MH/SUD services), as well as comply with the federal parity law requirements, beginning in 2014.

The MHPAEA contains the following parity requirements:

• The financial requirements (such as deductibles, copayments, coinsurance and out-of-pocket limits) applicable to MH/SUD benefits cannot be more restrictive than the predominant financial requirements applied to substantially all medical and surgical benefits.
• Treatment limitations (such as frequency of treatment, number of visits, days of coverage or other similar limits on the scope or duration of coverage) must also comply with the MHPAEA's parity requirements. Non-quantitative treatment limitations (such as medical management standards, formulary design and determinations of usual, customary or reasonable amounts) are subject to a separate parity requirement.
• If medical and surgical benefits are offered on an out-of-network basis, a plan or issuer must also offer MH/SUD benefits on an out-of-network basis.

In addition, the MHPAEA requires plans to make certain information available with respect to MH/SUD benefits, such as the criteria for medical necessity determinations and the reason for any denial of reimbursement or payment for MH/SUD services.

Overview of the MHPAEA Final Rule

In January, as part of the President and Vice President's plan to reduce gun violence, the administration committed to finalize this rule as part of a larger effort to increase access to affordable mental health services and reduce misinformation associated with mental illness.

The final MHPAEA rule was developed based on the Departments' review of more than 5,400 public comments on the interim final rules issued in 2010.

According to the Departments, the final rule ensures that health plan features like copays, deductibles and visit limits are generally not more restrictive for MH/SUD benefits than they are for medical and surgical benefits.

The final rule also includes specific additional consumer protections, such as:

• Ensuring that parity applies to intermediate levels of care received in residential treatment or intensive outpatient settings;
• Clarifying the scope of the transparency required by health plans, including the disclosure rights of plan participants, to ensure compliance with the law;
• Clarifying that parity applies to all plan standards, including geographic limits, facility-type limits and network adequacy; and
• Eliminating an exception to the existing parity rule that was determined to be confusing, unnecessary and open to abuse.

This article is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.

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