The Mental Health
Parity and Addiction Equity Act of 2008 (MHPAEA)
March 16, 2012
MHPAEA, which amended the Public Health Service Act, the Employee
Retirement Income Security Act (ERISA) and the Internal Revenue Code,
generally is effective for plan years beginning on or after October 3,
2009. For calendar year plans, the effective date is January 1, 2010.
The Departments of Labor (DOL), Health and Human Services (HHS), and the
Treasury will publish in the Federal Register an interim final rule
implementing the provisions of MHPAEA on February 2, 2010. The
regulation is effective on April 5, 2010, and applicable to plan years
beginning on or after July 1, 2010.
The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA)
requires group health plans and health insurance issuers to ensure that
financial requirements (such as co-pays, deductibles) and treatment
limitations (such as visit limits) applicable to mental health or
substance use disorder (MH/SUD) benefits are no more restrictive than
the predominant requirements or limitations applied to substantially all
MHPAEA applies to plans sponsored by private and public sector employers
with more than 50 employees, including self-insured as well as fully
insured arrangements. MHPAEA also applies to health insurance issuers
who sell coverage to employers with more than 50 employees.
The DOL and the IRS generally have enforcement authority over private
sector employment-based plans that are subject to ERISA. HHS has direct
enforcement authority with respect to self-funded non-Federal
governmental plans. While State insurance commissioners have primary
authority over issuers in the large group market, HHS has secondary
MHPAEA supplements prior provisions under the Mental Health Parity Act
of 1996 (MHPA), which required parity with respect to aggregate lifetime
and annual dollar limits for mental health benefits. DOL, HHS and
Treasury issued regulations under MHPA in 1997. The MHPAEA interim final
rule amends and modifies certain provisions in the MHPA regulations.
Although MHPAEA provides significant new protections to participants in
group health plans, it is important to note that MHPAEA does not mandate
that a plan provide MH/SUD benefits. Rather, if a plan provides
medical/surgical and MH/SUD benefits, it must comply with the MHPAEA’s
parity provisions. Also, MHPAEA does not apply to issuers who sell
health insurance policies to employers with 50 or fewer employees or who
sell health insurance policies to individuals.
MHPAEA Continues and Expands MHPA
As noted above, MHPA required parity with respect to aggregate lifetime
and annual dollar limits. However, MHPA did not apply to substance use
disorder benefits. MHPAEA continued the MHPA parity rules as to limits
for mental health benefits, and amended them to extend to substance use
Therefore, plans and issuers that offer substance use disorder benefits
subject to aggregate lifetime and annual dollar limits must comply with
the MHPAEA’s parity provisions.
The regulations demonstrate how the expanded rules apply, and update
certain defined terms and examples as necessary.
Additional MHPAEA Protections Relating to Financial Requirements
Under MHPAEA, if a plan or issuer that offers medical/surgical and MH/SUD
benefits imposes “financial requirements” (such as deductibles,
copayments, coinsurance and out of pocket limitations), the financial
requirements applicable to MH/SUD benefits can be no more restrictive
than the “predominant” financial requirements applied to “substantially
all” medical/surgical benefits.
The regulations provide that the “predominant/substantially all” test
applies to six classifications of benefits on a
classification-by-classification basis. The regulation also includes
other rules and definitions that are necessary in order for plans,
issuers and their advisers to apply this general parity test.
Additional MHPAEA Protections Relating to Treatment Limitations
MHPAEA also provides similar protections for treatment limitations.
“Treatment limitations” mean limits on the frequency of treatment,
number of visits, days of coverage, or other similar limits on the scope
or duration of treatment.
The regulation clarifies that there may be both quantitative and
non-quantitative treatment limitations, and provides rules for each.
Since they are similar to financial requirements, quantitative treatment
limitations are subject to the same general test as the financial
requirements discussed above.
Because non-quantitative treatment limitations (such as medical
management standards, formulary design, and determination of
usual/customary/reasonable amounts) apply differently, the regulation
includes a separate parity requirement for them.
Parity with Respect to Out of Network Benefits
If a plan or issuer that offers medical/surgical benefits on an
out-of-network basis also offers MH/SUD benefits, it must offer the MH/SUD
benefits on an out-of-network basis as well.
MHPAEA Availability of Plan Information Requirements
MHPAEA requires that plans make certain information available with
respect to MH/SUD benefits. First, the criteria for medical necessity
determinations with respect to MH/SUD benefits must be made available to
any current or potential participant, beneficiary, or contracting
provider upon request.
MHPAEA also provides that the reason for any denial of reimbursement or
payment for services with respect to MH/SUD benefits must be made
available, upon request or as otherwise required, to the participant or
The regulation clarifies that, for non-Federal governmental plans (which
are not subject to ERISA), and health insurance coverage offered in
connection with such plans, compliance with the form and manner of the
ERISA claims procedure regulations for group health plans satisfies this
Exemptions from MHPAEA
MHPAEA retains the exemption for small employers contained in MHPA.
MHPAEA modified the exemption contained in MHPA based on increased cost
in several respects, which are explained in the statute.
The MHPAEA regulation updates the small employer exemption, withdraws
the MHPA regulations concerning the increased cost exemption, and
reserves paragraph (g) for additional future guidance.
MHPAEA interim final rule is intended to address the most pressing
issues that affect the ability of plans and issuers to comply in the
near term. The Departments noted several issues in the preamble, and
specifically requested comments on:
Whether additional examples would be helpful to illustrate the
application of the non-quantitative treatment limitation rule to other
features of medical management or general plan design;
Whether and to what extent MHPAEA addresses the “scope of services” or
“continuum of care” provided by a group health plan or health insurance
What additional clarifications might be helpful to facilitate compliance
with the disclosure requirement for medical necessity criteria or
denials of MH/SUD benefits; and
Implementing the new statutory requirements for the increased cost
exemption under MHPAEA, as well as information on how many plans expect
to use the exemption.