Mental Health Parity

Background / Our Implementation / Costs / Deductibles / Standard Coverage / Coverage Requirements / Medicare / Regulations / Disclaimer

Background

What is Mental Health Parity?

The Mental Health Parity Act (the "MHP Act") is a new federal law that was signed into law last October and will become effective October 3, 2009. This law requires group health plans that choose to offer both medical benefits and mental health or substance abuse benefits to offer such benefits in parity.

Does the MHP Act require plan sponsors to cover mental health or substance abuse benefits?

No. The MHP Act does not require plan sponsors to cover mental health or substance abuse benefits. However, if a plan sponsor chooses to offer mental health or substance abuse benefits, the MHP Act prohibits imposing more restrictive financial requirements (such as co-pays or deductibles) or treatment limitations (such as day or visit limits) on mental health or substance abuse benefits than those applied to medical or surgical benefits.

As stated below, state law will continue to apply and may, for example, mandate additional mental health/substance abuse coverage.

Does the MHP Act specify how parity must be achieved?

No. The MHP Act does not dictate how parity should be achieved. For example, the MHP Act does not say that parity should be achieved through reducing medical benefits or by increasing mental health benefits. The MHP Act only requires "parity" however the health plan chooses to structure the benefits.

What exemptions, if any, are in place for this law?

• Small employer exemption - Any employer that has on average between two and fifty employees during the preceding calendar year is classified as a small employer and is not subject to the parity law.
• Cost-based exemption - If the new parity provisions raise the total costs of any group health plan by 2% or more in the first year and 1% in the following years the plan can seek a one year exemption.
• Self-funded Non-Federal Government Employers - A non-federal government employer that provides self-funded group health plan coverage to its employees may elect to exempt its plan (opt-out) from requirements of the MHP Act.

Does the MHP Act preempt or supersede existing state parity laws?

No. The MHP Act establishes a floor for benefits, but specifically allows states to continue to enforce any parity requirement deemed stronger than federal law (as long as state law does not compromise the federal law). For plans not subject to state laws (ERISA self funded plans), the new federal law sets both the floor and the ceiling.

What mental health and substance use disorders are covered under the MHP Act?

As stated above, the MHP Act does not require plan sponsors to offer mental health or substance abuse coverage. However, if an plan sponsor chooses to offer mental health or substance abuse benefits, the MHP Act prohibits imposing more restrictive financial requirements (such as copays or deductibles) or treatment limitations (such as day or visit limits) on mental health or substance abuse benefits than those applied to medical or surgical benefits.

Does the MHP Act define mental health and substance use disorder benefits?

The MHP Act defines mental health and substance use disorder benefits as those "defined under the terms of the plan and in accordance with applicable Federal and State law." This means that the law defers to group health plans to define mental and substance use disorders and their coverage. As previously noted however, where state law either defines or mandates coverage of specific mental illnesses or services, those definitions will continue to apply to plans subject to state regulation.

How does this law differ from the 1996 federal parity law?

The key differences between the new MHP Act and the 1996 federal parity act are as follows:

The new MHP Act:

• Includes substance use disorders
• Requires out of network coverage for mental health and substance use disorders if out of network is covered for medical surgical benefits
• Prohibits more restrictive cost-sharing features for behavioral health than those applied to medical/surgical benefits
• Prohibits more restrictive day and visit limitations for behavioral health than for those applied to medical/surgical benefits.

What is the effective date for the new MHP Act?

The MHP Act is effective for plan years beginning on or after October 3, 2009. The effective date of the new mental health parity law for collectively bargained plans will be the plan year beginning after the later of: (a) the date on which the last of the collective bargaining agreements related to the plan terminates or (b) January 1, 2010.

When is Aetna implementing the requirements of the MHP Act?

Requirements of the MHP Act will be implemented on October 3, 2009 and plan sponsors will need to be in compliance beginning with their first plan year renewal after that date.

Does the MHP Act apply to non-federal government plans?

Both fully insured and self-funded non-federal government plans are subject to parity.

Self funded non-federal government plans, however, can opt out of the parity requirement by filing an exemption election with the Centers for Medicare and Medicaid Services (CMS).