New Mental Health Parity Regulations May Require Health Plan Changes

      On February 2, 2010, the Departments of Health and Human Services, Labor, and the Treasury issued Final Interim Regulations under the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), which amended the Mental Health Parity Act of 1996 (MHPA).  Private group health plans, church plans and governmental plans are subject to the mental health parity laws (although non-federal, self-funded governmental plans may have an opportunity to opt out of certain of these provisions).

      The MHPA requires parity in the aggregate lifetime and annual dollar limits for mental health benefits and medical and surgical benefits.  The MHPAEA expands on the existing MHPA by requiring parity with respect to financial restrictions and treatment limitations, and also by expanding the scope of the parity provisions to apply to substance use disorder benefits in addition to mental health benefits.

      The main rule added by the MHPAEA requires that a group health plan not place financial requirements or treatment limitations on its mental health or substance use disorder benefits that are more restrictive than the predominant requirements or limitations placed on substantially all medical and surgical benefits.  To comply with this rule, the Final Interim Regulations provide a detailed set of rules to help an employer determine which benefits must be compared for purposes of parity and which requirements or limitations are "predominant" and apply to "substantially all" medical and surgical benefits.  Generally, the regulations require that the comparison of mental health/substance use disorder benefits with medical/surgical benefits be made within the following six classifications:

• Inpatient, in-network
• Inpatient, out-of-network
• Outpatient, in-network
• Outpatient, out-of-network
• Emergency care
• Prescription drugs

      Plans can continue to define whether a benefit is medical/surgical, mental health or substance abuse, but must do so consistently and according to generally recognized independent standards of current medical practice.

      In addition, the regulations make clear that a group health plan may not apply cumulative financial limits (e.g., deductibles or out-of-pocket limits) on mental health or substance use disorder benefits that apply separately from any such cumulative limits on medical/surgical benefits.  This rule will generally prevent having a separate deductible for mental health/substance abuse benefits and medical/surgical benefits.  The regulations also address non-quantitative treatment limitations that may violate the MHPAEA, and generally require equal treatment with respect to practices such as prior authorization and utilization review.  However, the regulations do not consider a permanent exclusion of all benefits for a specific condition or disorder to be a treatment limitation.

      The requirements of the MHPAEA and the Final Interim Regulations apply to employers with more than 50 employees that offer both medical/surgical benefits and mental health or substance use disorder benefits, although an increased cost exemption is available.  While the MHPAEA is effective for plan years beginning on or after October 3, 2009 (January 1, 2010, for calendar year plans), the Final Interim Regulations are effective for plan years beginning on or after July 1, 2010 (January 1, 2011, for calendar year plans). Until the effective date of the regulations, the departments will take into account good faith efforts to comply with a reasonable interpretation of the MHPAEA.  However, this does not prevent participants or beneficiaries from bringing a private cause of action.

      For more information regarding MHPAEA and the Interim Final Regulations, or if you would like assistance with reviewing your group health plans for compliance with MHPAEA, please contact Christopher Sears, Tara Sciscoe, Shalina Schaefer or the Ice Miller LLP Employee Benefits attorney with whom you work.