The Departments of Labor, Health and Human Services, and the Treasury (Departments) recently released mental health parity final regulations that implement the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA).
The MHPAEA applies to most employers with more than 50 employees and is designed to provide mental health parity by making sure mental health and/or substance use disorder benefits offered by health plans are equivalent to the medical/surgical benefits the plans offer.
The U.S. Congress passed the MHPAEA in October 2008, and in February 2010, the Departments jointly issued interim final regulations to aid employers and group health insurers in implementing the MHPAEA’s requirements. The new final regulations are not a whole lot different from those initial regulations and mainly just provide new clarifications on various issues.
Classification of benefits
The interim final regulations made clear that parity analysis must be conducted on a classification-by-classification basis and divided benefits into the following six classifications:
- Inpatient, in-network;
- Inpatient, out-of-network;
- Outpatient, in-network;
- Outpatient, out-of-network;
- Emergency care; and
- Prescription drugs.
The new final regulations retain those six classifications, but they do allow plans and issuers to divide benefits furnished on an outpatient basis into two sub-classifications:
- Office visits (e.g., physician visits); and
- All other outpatient items and services (e.g., outpatient surgery, facility charges for day treatment centers, laboratory charges, and other medical items).
The final regulations also provide that if a plan (or health insurance coverage) provides in-network benefits through multiple tiers of in-network providers, the plan may divide its benefits furnished on an in-network basis into sub-classifications that reflect those network tiers. However, such tiering must be based on reasonable factors and without regard to whether a provider is a mental health or substance use disorder provider or a medical/surgical provider.
The mental health parity final regulations also provide other clarifications. For example, they:
- Make minor, technical changes to the meaning of the terms “medical/surgical benefits,” “mental health benefits,” and “substance use disorder benefits;”
- Clarify that a plan or issuer is not required to perform the parity analysis each plan year unless there is a change in plan benefit design, cost-sharing structure, or utilization that would affect a financial requirement or treatment limitation within a classification or sub-classification;
- Remove a specific exception for “recognized clinically appropriate standards of care” regarding nonquantitative treatment limitations (NQTLs);
- Add two additional examples of NQTLs: (1) network tier design and (2) restrictions based on geographic location, facility type, provider specialty, and other criteria that limit the scope or duration of benefits for services provided under the plan or coverage;
- Add a new section that addresses claiming an increased cost exemption under the MHPAEA;
- Add more examples throughout the regulations to help plans and issuers understand the provisions.
Effective dates and FAQs
The mental health parity final regulations are effective January 13, 2014, and they apply to group health plans and health insurance issuers for plan years beginning on or after July 1, 2014. Until then, plans and issuers must continue to comply with the interim final regulations.
Along with the new regulations, the Departments also published another set of mental health parity FAQs, which request comments on whether and how to ensure greater transparency and compliance.
Mental Health Parity Resources
Jessica Webb-Ayer, J.D., is an attorney editor for BLR’s human resources and employment law publications. She has written and edited countless publications on labor and employment law and is the editor of the Benefits Compliance Advisor online newsletter and the benefits manual, Benefits Compliance: Strategies for Plans, Programs & Policies. Ms. Webb-Ayer has also worked on various Americans with Disabilities Act (ADA) and workers’ compensation/safety products. She graduated summa cum laude with a B.A. in Psychology from Lipscomb University in Nashville, Tennessee, and graduated cum laude with a law degree from the University of Tennessee College of Law in Knoxville, Tennessee. Ms. Webb-Ayer is licensed to practice law in Tennessee.
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