Mental Health and Addiction Parity Law
The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) was signed into law on October 3, 2008. The parity law requires that any group health plan that covers more than 50 employees and offers mental health and/or substance use disorders coverage must provide that coverage with no greater financial requirements (i.e., co-pays, deductibles, annual or lifetime dollar limits) or treatment limitations (i.e., number of visits) than the predominant requirements that it applies to substantially all medical/surgical benefits. Previous federal legislation in 1996 provided limited parity on lifetime and annual dollar limits and did not extend to substance use disorders. The law became effective for plan years beginning on or after October 3, 2009 (so for calendar year plans, the law took effect January 1, 2010).
The law is estimated to provide parity of coverage for 113 million people, including 82 million enrolled in self-insured plans.
On January 29, 2010, the Departments of Health and Human Services, Labor and the Treasury issued an Interim Final Rule. The Interim Final Rule provides employers with details about how the law must be implemented.
Parity Law Timeline
Interim Final Rule
Link to the Legislation
Results from Partnership Parity Employer Survey
Employer Parity Fact Sheet
Research Works Parity Issue Brief
Mental Health Works
Questions/Comments
- October 3, 2008 - The parity bill is signed by President Bush on October 3, 2008 and enrolled into public law as PL 110-343.
- April 28, 2009 - Departments of Health and Human Services, Labor, and Treasury issue a Request for Information (RFI) soliciting comments to prepare to issue regulations.
- May 28, 2009 - Comment period on RFI closes.
- October 3, 2009 - Statutory deadline for issuing comments. The law became effective for plan years beginning on or after October 3, 2009. Plans must comply, even in the absence of regulatory guidance.
- January 1, 2010 - Law goes into effect for calendar year plans. Plans must comply, even in the absence of regulatory guidance.
- January 29, 2010 - The Departments issue an interim final rule with comment on MHPAEA 2008. The guidance released is an interim final rule and comments are being solicited.
- April 3, 2010 - the Interim Final Rule is effective on April 3, 2010.
- May 3, 2010 - Comments to the Interim Final Rule are due May 3, 2010 and the new rules are effective for plan years beginning on or after July 1, 2010.
- July 1, 2010 - the requirements as detailed in the Interim Final Rule must be applied to plans for plan years beginning on or after July 1, 2010.
- January 1, 2011 - For calendar year plans, requirements as detailed in the Interim Final Rule must be in place.
On January 29, 2010, the Departments of Health and Human Services, Labor and the Treasury issued an Interim Final Rule.
The Interim Final Rule provides employers with details about how the law must be implemented. What follows are some the
rule's key provisions.
According to the rule, if a plan covers a mental health/substance use disorder, it must provide benefits in each classification
for which any medical or surgical benefits are offered. The six benefit classifications defined in the rule are:
- Inpatient, in-network
- Outpatient, in-network
- Emergency care
- Inpatient, out-of-network
- Outpatient, out-of-network
- Prescription Drugs
In addition to the requirements for out-of-pocket costs and benefit limits, the rules require parity in the areas of prior authorization and utilization review. According to Departments issuing the rule, "these practices must be based on the same level of scientific evidence used by the insurer for medical and surgical benefits."
The rule requires parity in financial requirements. Regulations require that plans maintain a single combined deductible for MH/SUD and medical/surgical benefits. Plans are not permitted to have separate deductibles for treatment related to mental health or substance use disorders and medical or surgical benefits-they must be calculated as one limit. Other financial requirements include a requirement for parity in terms of copayments, coinsurance, and out-of-pocket maximums.
The rule requires parity in treatment limitations, and provides a distinction between quantitative and non-quantitative limitations. Quantitative limitations are limitations which can be expressed numerically, such as an annual 20 outpatient visit limit.
Non-quantitative limitations are those which cannot be expressed numerically, but which otherwise limit the scope and duration of benefits for treatment. Examples of these limitations include:
- Certain medical management standards
- Formulary design for prescription medication
- Standards for provider participation in network, including reimbursement rates
- Methods for determining UCR rates
- Fail-first or step-therapy protocols
- Exclusions based on failure to complete a course of treatment
- Interim Final Rule, published in the Federal Register on February 2, 2010 (PDF).
- Department of Labor news release, "Obama Administration issues rules requiring parity in treatment of mental, substance use disorders"
- Department of Labor Fact Sheet on the Mental Health Parity and Addiction Equity Act.
Parity provisions were contained within H.R. 1424, the Emergency Economic Stabilization Act of 2008. The text of the legislation can be found here. The section on mental health parity is located on pages 310-344 of the displayed law.
(Back to Top)Results from Partnership Parity Employer Survey
According to a Partnership survey, very few employers are considering dropping mental health coverage in response to parity law. The survey was designed to better understand corporate benefit design and what kinds of changes employers intended to make to comply with the law. For more information, download a copy of the survey results here. Thank you to all who participated!
(Back to Top)The new federal parity law, which requires comparable health plan features for mental health and medical/surgical benefits, is built upon research that mental health care is both efficacious and economical. Well-designed, appropriately managed mental health benefits provide a positive return on minimal investment. Please click here.
(Back to Top)Research Works Parity Issue Brief
The Partnership developed a Research Works issue brief which provides guidance on mental health parity and the perspectives of leading employers across the country, including DuPont, the Houston Chronicle, JPMorgan Chase and Pitney Bowes. Successful Employer Implementation of the Federal Mental Health Parity and Addiction Equity Act offers employers ways to implement effective mental health parity; manage the benefit to optimize quality and value; structure benefits to comply with law's requirements; and integrate the new benefit with related employer programs.
(Back to Top)The Partnership published an issue of Mental Health Works specifically focused on parity. The issue provides answers to common questions concerning the law and highlights the corporate experience with parity from leading employers including Weingarten Realty Investors, Houston Chronicle, Houston Texans, JPMorgan Chase, Pitney Bowes, DuPont, the State of Ohio, and Polk County, Florida. The issue can be found here.
(Back to Top)Do you have questions or comments? Please contact us at cmiller@psych.org.