What is the MHPAEA and why was it created?
The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 was created to bring insured healthcare benefits for mental health and substance use disorders in line with those for medical/surgical benefits. Historically, health insurance plans have provided more limited benefits for treatment of mental health and substance use disorders, often including calendar year, lifetime, or other quantity limits on coverage. Additionally, it has been common for health insurers to require higher out-of-pocket payments from insured members to access these benefits. The MHPAEA extends the parity requirements that were introduced in the Mental Health Parity Act of 1996 to substance use disorders, and also requires the total integration of mental health and substance abuse disorder coverage with medical/surgical coverage.
Does MHPAEA require mental health and substance use disorder coverage?
MHPAEA does not require that group health plans provide mental health or substance use disorder benefits. MHPAEA states that, if a group health plan does provide such benefits, the benefits must be provided at a level consistent with other medical and surgical benefits.
However, starting in 2014, the Affordable Care Act (ACA) and its implementing regulations will require non-grandfathered individual and small group health insurance plans to cover mental health and substance abuse services, deeming them essential health benefits. The ACA also requires all small group and individual health insurance plans to comply with parity under MHPAEA when covering these services.
Which plan sponsors and health plans are subject to MHPAEA?
These new rules originally applied only to group health plans (both fully insured and self-insured plans) covering more than 50 employees, Medicaid-managed care plans, Taft-Hartley group health plans, SCHIP programs, and federal employee benefits plans. They also apply to non-federal government employers that provide self-funded group health plan coverage to their employees, but such employers may elect to opt out from the requirements of MHPAEA.
Starting in 2014, small employers and individual health insurance plans will also be subject to MHPAEA.
How does the MHPAEA measure parity?
MHPAEA defines six classifications of benefits that each require parity compliance: inpatient in-network, inpatient out-of-network, outpatient in-network, outpatient out-of-network, emergency care, and prescription drugs. If a plan has no network of providers, all benefits in the classification are characterized as out-of-network. If coverage for mental health and substance use disorders is provided in one classification, it must be provided in each of the six benefit classifications where medical/surgical coverage is provided.
Within each of the benefit classifications, financial requirements, quantitative treatment limitations, and nonquantitative treatment limitations must be tested for parity. Financial requirements are the deductibles, copayments, etc. Quantitative treatment limits are limits on the frequency of treatment, number of outpatient visits, or other similar limits on duration of treatment. Nonquantitative treatment limitations are limitations that are not expressed numerically, but otherwise limit the scope or duration of benefits for treatment, such as requirements for using lower-cost therapies before a plan will cover more expensive therapies, conditional benefits on completion of a course of treatment medical management standards, standards for provider admission to participate in a network, etc.
When do MHPAEA and accompanying Interim Final Regulations go into effect?
The MHPAEA was passed on October 3, 2008, and became effective for plan renewals on or after October 3, 2009. The Interim Final Rules (IFR) providing detailed regulations for MHPAEA were issued on January 29, 2010, and were effective for group plan renewals on or after July 1, 2010. Collective bargaining contracts must comply with the IFR starting on their first renewal after July 1, 2010, or after the end of their current collective bargaining contract period. Many group plans renew at the start of each calendar year; therefore, many plans were first subject to the IFR starting January 1, 2011. Good faith compliance with MHPAEA was allowed prior to the effective date of the IFR.
Non-grandfathered individual and small group health insurance plans are subject to MHPAEA on their first plan year (in the group market) or policy year (in the individual market) on or after January 1, 2014.