Mental Health Parity Act
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|Other short titles|
|Long title||Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1997|
|Enacted by||the 104th United States Congress|
|Public law||Pub.L. 104–204|
The Mental Health Parity Act (MHPA) is legislation signed into United States law on September 26, 1996 that requires annual or lifetime dollar limits on mental health benefits to be no lower than any such dollar limits for medical and surgical benefits offered by a group health plan or health insurance issuer offering coverage in connection with a group health plan. Prior to MHPA and similar legislation, insurers were not required to cover mental health care and so access to treatment was limited, underscoring the importance of the act.
The MHPA was largely superseded by the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA), which the 110th United States Congress passed as rider legislation on the Troubled Asset Relief Program (TARP), signed into law by President George W. Bush in October 2008. Notably, the 2010 Patient Protection and Affordable Care Act extended the reach of MHPAEA provisions to many health insurance plans outside its previous scope.
The MHPA applies to group health plans for plan years beginning on or after January 1, 1998. The original sunset provision provided that the parity requirements would not apply to benefits for services furnished on or after September 30, 2001. It was extended six times, with the final extension running through December 31, 2007. Insurers promptly were able to "circumvent" the consumer protections arguably intended in the legislation by imposing maximum numbers of provider visits and/or caps on the number of days an insurer would cover for inpatient psychiatric hospitalizations. In essence, the law had little or no effect on mental health coverage by group insurance plans. The rider on TARP prohibits all group health plans that offer mental health coverage from imposing any greater limit on co-pays, co-insurance, numbers of visits, and/or number of days covered for hospital stays due to mental health conditions. The rider legislation was the culmination of a long campaign fought by Sen. Paul Wellstone (D-MN) and his successors to enact mental health parity at the federal level. The new law's requirements will be phased in over several years. Still unsure is whether non-"biologically-based" mental illnesses such as PTSD and eating disorders are mandated to be covered by the new law.
Generally the act required parity of mental health benefits with medical and surgical benefits with respect to the application of aggregate lifetime and annual dollar limits under a group health plan. It provided that employers retain discretion regarding the extent and scope of mental health benefits offered to workers and their families, including cost sharing, limits on numbers of visits or days of coverage, and requirements relating to medical necessity.
The law also contained three exemptions:
- No mental health coverage
- Business that chose not to provide mental health coverage.
- Small employers
- Businesses with fewer than 50 employees.
- Increased cost
- Businesses that documented at least one percent increase in premiums due to implementation of parity requirements.
Issues with the MHPA
Immediately after MHPA was enacted, insurers and employers began finding ways to circumvent the legislation. Larger emphasis on cost sharing, primarily implemented through higher copayments, deductibles, and out-of-pocket maximums, was one strategy used by insurers. In addition, limits and caps on the number of visits with a care provider or number of days in a hospital visit were imposed.:201 MHPA also did not provide benefits for substance abuse and dependency issues.:2 Lastly, MHPA contained a sunset provision that meant that the law would go out of effect after a certain date. The original sunset date was extended six times, through 2007.
Mental Health Parity and Addiction Equity Act
|Other short titles|
|Long title||A bill to provide authority for the Federal Government to purchase and insure certain types of troubled assets for the purposes of providing stability to and preventing disruption in the economy and financial system and protecting taxpayers, to amend the Internal Revenue Code of 1986 to provide incentives for energy production and conservation, to extend certain expiring provisions, to provide individual income tax relief, and for other purposes.|
|Enacted by||the 110th United States Congress|
|Effective||1 January 2010|
|Public law||Pub.L. 110–343|
|Statutes at Large||122 Stat. 3765|
The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA) was enacted in October 2008 and took effect on 1 January 2010. The main purpose of MHPAEA was to fill the loopholes left by the MHPA. The act requires health insurers as well as group health plans to guarantee that financial requirements on benefits, including co-pays, deductibles, and out-of-pocket maximums, and limitations on treatment benefits such as caps on visits with a provider or days in a hospital visit, for mental health or substance use disorders are not more restrictive than the insurer's requirements and restrictions for medical and surgical benefits. MHPAEA only applies to insurance plans for public and private sector employers with over 50 employees and health insurance issuers who sell coverage to employers with more than 50 employees.:1 Similar to MHPA, MHPAEA requires parity in terms of total annual dollar limits, as well as aggregate lifetime benefits. It is important to note however, that MHPAEA does not explicitly require that any insurance plan offer benefits for mental health and substance abuse disorders.:1 Instead, it enacts parity rules for plans that choose to offer both medical and surgical benefits as well as mental health and substance abuse disorder benefits.:1–2 This includes out-of-network benefits.:3 If plans choose to offer both types of benefits, MHPAEA mandates that insurers define and make available specific criteria for medical necessity when it comes to mental health and substance abuse disorder benefits. In addition, MHPAEA also requires that insurers provide specific information and reasons in the event that reimbursement or payment for treatment is denied.:3
One main challenge to the implementation of MHPAEA is what is known as "carve-out" health benefits. This refers to mental health benefits that are purchased by employers separately from medical benefits. The "carve-out" vendor may be separate from any number of other vendors providing medical benefits. The law would require the "carve-out" vendor to ensure parity with medical benefits provided by a separate vendor or vendors. In addition, the legislation itself did not create a mechanism to regularly monitor or evaluate the enforcement or implementation of the act.
The Federal Parity Law and the follow-up regulatory/sub-regulatory guidance is complex and sometimes ambiguous. Solutions are needed to help implement and enforce the Federal Parity Law and applicable state laws. This includes opportunities to help automate and document NQTL comparability analyses in writing and in operation to further validate that the plan is treating MH/SUD coverage requirements/payments in the same manner as medical/surgical care. Several tools exist that can help promote parity compliance including the U.S. DOL Self-Compliance Tool, the CMS Parity Compliance Toolkit for Medicaid/CHIP, the Six Step Parity Compliance Guide, and ClearHealth Quality Institute’s Online Parity Tool.
- "Fact Sheet: The Mental Health Parity Act". Employee Benefits Security Administration. U.S. Department of Labor. October 2008. Archived from the original on 16 April 2012.
- H.R. 1424
- Frank, Richard G.; Beronio, Kirsten; Glied, Sherry A. (2014). "Behavioral health parity and the Affordable Care Act". Journal of Social Work in Disability & Rehabilitation. 13 (1–2): 31–43. doi:10.1080/1536710X.2013.870512. PMC 4334111. PMID 24483783.
- Jensen, Gail A.; Rost, Kathryn; Burton, Russell P.D.; Bulycheva, Maria (May 1998). "Mental health insurance in the 1990s: are employers offering less to more?" (PDF). Health Affairs. 17 (3): 201–208. doi:10.1377/hlthaff.17.3.201. PMID 9637976.
- "Fact Sheet: The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA)" (PDF). Employee Benefits Security Administration. United States Department of Labor. 29 January 2010.
- "FYI: Mental Health Insurance Under the Federal Parity Law" (PDF). Practice Central. American Psychological Association. October 2010. Archived from the original (PDF) on 7 September 2012.
- Adrion, Emily; Anderson, Gerard (October 2009). "Mental Health Parity". Health Policy Monitor. Bertelsmann Foundation.
- Beronio, Kirsten; Po, Rosa; Skopec, Laura; Glied, Sherry (20 February 2013). Affordable Care Act Expands Mental Health and Substance Use Disorder Benefits and Federal Parity Protections for 62 Million Americans (Report). Washington, DC: U.S. Department of Health and Human Services, Office of The Assistant Secretary for Planning and Evaluation.
- Internal Revenue Service; Employee Benefits Security Administration; Centers for Medicare & Medicaid Services (13 November 2013). "Final rules under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008; technical amendment to external review for multi-state plan program: Final rules". Federal Register. 78 (219): 68239–96. PMID 24228295. 78 FR 68239
- Centers for Medicare & Medicaid Services (30 March 2016). "Medicaid and Children's Health Insurance Programs; Mental Health Parity and Addiction Equity Act of 2008; the Application of Mental Health Parity Requirements to Coverage Offered by Medicaid Managed Care Organizations, the Children's Health Insurance Program (CHIP), and Alternative Benefit Plans: Final rule". Federal Register. 81 (61): 18389–445. PMID 27029080. 81 FR 18389