From the department of labor…
“Fact Sheet: The Mental Health Parity Act
U.S. Department of Labor
Employee Benefits Security Administration
October 2008
The Mental Health Parity Act (MHPA), signed into law on September 26, 1996, requires that annual or lifetime dollar limits on mental health benefits 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.
MHPA applies to group health plans for plan years beginning on or after January 1, 1998. The original sunset provision (providing that the parity requirements would not apply to benefits for services furnished on or after September 30, 2001) has been extended several times. If you have questions about the sunset provision, contact the EBSA office nearest you.
The law:
- Generally requires parity of mental health benefits with medical/surgical benefits with respect to the application of aggregate lifetime and annual dollar limits under a group health plan
- Provides 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, however, does not apply to benefits for substance abuse or chemical dependency.
The law also contains the following two exemptions:
- Small employer exemption. MHPA does not apply to any group health plan or coverage of any employer who employed an average of between 2 and 50 employees on business days during the preceding calendar year, and who employs at least 2 employees on the first day of the plan year
- Increased cost exemption. MHPA does not apply to a group health plan or group health insurance coverage if the application of the parity provisions results in an increase in the cost under the plan or coverage of at least one percent”
Basically this means that mental illness and physical illness treatment must have the same annual limits but could have special rules such as different co-pays and deductibles or limits on visits. But this only applies if you work for a company of more than 50, it won’t raise the cost of the plan more than 1%, and you are not seeking help for substance abuse. Not a great deal of help but it was a step in the right direction and allowed for the next step, The Wellstone Act.
The new Wellstone Act changes MHPA in the following ways…
While MHPA imposes restrictions on annual and lifetime limits, it does not stop a health plan from imposing special rules for mental health benefits such as deductibles, co-pays, coinsurance and number of visits allowed. The Wellstone Act prohibits any of these types of restrictions and includes substance abuse treatment under the mental health category.
The exception under MHPA for employers with no more than 50 employees continues under the Wellstone Act. However, the increased cost exemption changes from a 1% increase in cost to 2% in the first year and then goes back down to 1% in subsequent years. And, the plan must be in effect for more than 6 months before they can even apply for this exemption.
MHPA and the Wellstone Act do not require employers to provide mental health or substance abuse benefits. However, if an employer chooses to do so in its group health plan, these requirements must be satisfied. The Wellstone Act begins to apply as of the first day of the first plan year beginning after October 3, 2009 (January 1, 2010 for calendar year plans).
