Mental Health Parity Act Enacted
After many years of debate, the mental health parity requirements for group health plans became permanent on October 3, 2008. These new required provisions will apply to plan years beginning after October 3, 2009. For calendar year plans, the effective date is January 1, 2010. Collectively bargained group health plans with agreements ratified prior to October 3, 2008, are subject to the requirements in either January 1, 2009, or the date on which the last collective bargaining agreement relating to the plan terminates, whichever is later. It applies to plans with coverage for 50 or more employees.
The Act generally requires equity in treatment of mental health and substance abuse treatments under a plan. The key components of the Act are as follows:
- Plans cannot generally cannot impose more restrictive lifetime or annual limits on mental health or substance use disorder benefits that those imposed on medical or surgical benefits.
- Plans cannot generally impose more restrictive financial requirements, such as co-pays, deductibles, coinsurance or out-of-pocket expenses, on treatment for mental health or substance use disorder benefits than apply to medical or surgical benefits.
- Plans cannot generally impose more restrictive limitations on the frequency or total use of mental health or substance use disorder benefits that medical or surgical benefits.
- The Plan must provide similar in-network and out-of-network benefits for all coverages.
- The Plan must clarify and make available to participants the criteria used for determining medical necessity of mental health and substance use benefits.
Mental health and substance use disorder benefit are broadly defined to mean benefits with respect to services for mental health conditions and substance use disorders. If a plan offers two or more benefits packages, the requirements apply separately to each package.
There is a limited exception. A plan can be exempted from the Act if it experiences an increase in actual total costs of 1% (2% in the first plan year that the Act applies). However, any request for exemption to the Department of Labor or Department of Health & Human Services will require actuarial certification of the cost increase associated exclusively with the implementation of the Act and it is not anticipated that most plans will qualify for an exemption.
