All group health plans covering more than 50 employees must comply with the Mental Health Parity and Addiction Equity Act of 2008 by October 1, 2010. Here’s what you need to know.
If you’ve been handling employee health benefits for a while, you might remember previous rules requiring “mental health parity” in group health benefits expiring at year-end, only to be renewed. The latest parity law, the Mental Health Parity and Addiction Equity Act of 2008, removed automatic sunset provisions and expanded parity requirements.
What it covers
Under previous parity laws, group health plans had to provide the same annual and aggregate lifetime limits, “financial requirements” and treatment limitations to mental health benefits as they did to medical and surgical benefits. Under the 2008 law, the parity requirements now extend to substance abuse benefits.
The Act applies to employers with more than 50 employees that offer group health plans that include mental health and/or substance abuse benefits along with medical/surgical benefits. If your plan does not provide benefits for mental health or substance abuse, the Act does not require you to provide them.
The Act generally prohibits group health plans from placing stricter coverage limits or lower financial limits on mental health or substance abuse benefits than on medical/surgical benefits. Specifically, plans cannot 1) impose higher financial requirements (such as deductibles and copayments), 2) put stricter treatment limitations (number of visits or days of coverage), or 3) impose separate cost-sharing requirements or treatment limitations to mental health/substance abuse benefits. It requires plans to provide for out-of-network mental health/substance abuse benefits if it provides out-of-network medical/surgical benefits, and to make standards for “medical necessity” determinations and reasons for any denial of mental health/substance abuse benefits available upon request to participants.
The U.S. Departments of Health and Human Services, Labor and the Treasury released proposed rules to implement the Act in January. These rules further clarify plan sponsors’ duties under the Act. Although not final, the final rules will likely be similar. The proposed rules clarify the following changes employers should be aware of:
- Treatment by specialists: Health plans commonly require higher copayments for treatment from a specialist, such as a cardiologist, than from a primary care provider. Some health plans identify a large range of mental health and substance use providers as “specialists.” The regulations do not allow the separate classification of mental health generalists and specialists in determining the copayments and other financial requirements, because allowing plans to provide less favorable benefits for services by these providers than for services by medical/surgical primary care providers would undercut the protections that the statute was intended to provide.
- Separate or combined deductibles? Some plans have separate cumulative financial requirements for different classifications of benefits. For example, your plan might have separate annual deductibles for pharmacy benefits and medical/surgical benefits, particularly if it uses a pharmacy benefit manager to provide prescription drug benefits. Likewise, many plans use a separate managed behavioral health organization (MBHO) to provide mental health benefits.
The law did not specify whether a plan could have “separate but equal” cumulative financial requirements, such as deductibles and out-of-pocket limits. However, regulators determined that a plan may not apply cumulative financial requirements or cumulative quantitative treatment limitations to mental health or substance abuse benefits.
- Employee assistance programs (EAPs): Rulemakers also prohibited requiring participants to exhaust the EAP benefits—making the EAP a gatekeeper—before an individual is eligible for the major medical program’s mental health or substance use disorder benefits. They ruled this is a treatment limitation subject to parity requirements and thus prohibited.
New interim final regulations will be effective 60 days after they are published, or April 5, 2010. We can help you review your plan documents to ensure your plan meets the parity requirements. For information, please contact us.