Regulations Clarify Mental Health Parity Act

Under a proposed rule released by the Obama administration, patients in a group insurance plan who are being treated for mental illness or substance abuse may no longer be charged more than if they were receiving medical or surgical care.

The Department of Health and Human Service (HHS), the Department of Labor, and the Internal Revenue Service issued an interim rule last week containing specific language necessary to enforce the bipartisan mental health parity law passed by Congress in 2008.

The law - called the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act - states that if a group health plan covers the treatment of mental illness or drug or alcohol abuse, the limits and financial requirements for these services can be "no more restrictive" than those that apply to medical and surgical benefits.

That means an insurance plan cannot charge higher copayments, deductibles, and out-of-pocket expenses for mental health services than for treatment of physical illnesses.

Companies with fewer than 50 employees in their group insurance plans are excluded from the law.

In late January, the departments of Health and Human Services, Labor and the Treasury issued regulations clarifying the Mental Health Parity Act.  As stated in the Department of Health and Human Services Press Release,

"The new rules prohibit group health insurance plans - typically offered by employers - from restricting access to care by limiting benefits and requiring higher patient costs than those that apply to general medical or surgical benefits.  The rules implement the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA).

MHPAEA greatly expands on an earlier law, the Mental Health Parity Act of 1996 which required parity only in aggregate lifetime and annual dollar limits between the categories of benefits and did not extend to substance use disorder benefits.

The new law requires that any group health plan that includes mental health and substance use disorder benefits along with standard medical and surgical coverage must treat them equally in terms of out-of-pocket costs, benefit limits and practices such as prior authorization and utilization review. These practices must be based on the same level of scientific evidence used by the insurer for medical and surgical benefits.  For example, a plan may not apply separate deductibles for treatment related to mental health or substance use disorders and medical or surgical benefits - they must be calculated as one limit.  MHPAEA applies to employers with 50 or more workers whose group health plan chooses to offer mental health or substance use disorder benefits.  The new rules are effective for plan years beginning on or after July 1, 2010."

According to some analysts, EAPs cannot serve as gatekeepers, unless a similar form of management is applied to medical benefits. Also employers cannot require employees to exhaust EAP benefits before they access mental health care if a similar requirement does not exist for accessing medical care.

LMA advises that benefits managers be clear with their insurance vendor about how their specific policy is affected, if at all.

http://www.hhs.gov/news/press/2010pres/01/20100129a.html