The Mental Health Parity Act (MHPA) is legislation signed into

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...

law on September 26, 1996 that requires annual or lifetime dollar limits on

mental health Mental health encompasses emotional, psychological, and social well-being, influencing cognition, perception, and behavior. It likewise determines how an individual handles stress, interpersonal relationships, and decision-making. Mental health ...

benefits to be no lower than any such dollar limits for medical and surgical benefits offered by a group health plan or

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issuer offering coverage in connection with a group health plan. Prior to MHPA and similar legislation, insurers were not required to cover mental health care and so access to treatment was limited, underscoring the importance of the act. The MHPA was largely superseded by the

Paul Wellstone Paul David Wellstone (July 21, 1944 – October 25, 2002) was an American academic, author, and politician who represented Minnesota in the United States Senate from 1991 until he was killed in a plane crash near Eveleth, Minnesota, in 2002. A me ...

and

Pete Domenici Pietro Vichi "Pete" Domenici (May 7, 1932 – September 13, 2017) was an American attorney and politician who served as a United States Senator from New Mexico from 1973 to 2009. A member of the Republican Party, he served six terms in the S ...

Mental Health Parity and Addiction Equity Act (MHPAEA), which the

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passed as rider legislation on the

Troubled Asset Relief Program The Troubled Asset Relief Program (TARP) is a program of the United States government to purchase toxic assets and equity from financial institutions to strengthen its financial sector that was passed by Congress and signed into law by President G ...

(TARP) in Public Law 110-343, signed into law by President

George W. Bush George Walker Bush (born July 6, 1946) is an American politician who served as the 43rd president of the United States from 2001 to 2009. A member of the Republican Party, Bush family, and son of the 41st president George H. W. Bush, he ...

in October 2008. Notably, the 2010

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extended the reach of MHPAEA provisions to many health insurance plans outside its previous scope.

Scope

The MHPA applies to group health plans for plan years beginning on or after January 1, 1998. The original

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provided that the parity requirements would not apply to benefits for services furnished on or after September 30, 2001. It was extended six times, with the final extension running through December 31, 2007. Insurers promptly were able to "circumvent" the consumer protections arguably intended in the legislation by imposing maximum numbers of provider visits and/or caps on the number of days an insurer would cover for inpatient psychiatric hospitalizations. In essence, the law had little or no effect on mental health coverage by group insurance plans. The rider on TARP prohibits all group health plans that offer mental health coverage from imposing any greater limit on co-pays, co-insurance, numbers of visits, and/or number of days covered for hospital stays due to mental health conditions. The rider legislation was the culmination of a long campaign fought by Sen.

(D-MN) and his successors to enact mental health parity at the federal level. The new law's requirements will be phased in over several years. Still unsure is whether non-"biologically-based" mental illnesses such as

PTSD Post-traumatic stress disorder (PTSD) is a mental and behavioral disorder that can develop because of exposure to a traumatic event, such as sexual assault, warfare, traffic collisions, child abuse, domestic violence, or other threats on a ...

and

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are mandated to be covered by the new law.

Requirements

Generally the act required parity of mental health benefits with medical and surgical benefits with respect to the application of aggregate lifetime and annual dollar limits under a group health plan. It provided that

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s 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 Medical necessity is a legal doctrine in the United States related to activities that may be justified as reasonable, necessary, and/or appropriate based on evidence-based clinical standards of care. In contrast, unnecessary health care lacks such ...

. The law also contained three exemptions: ; No mental health coverage : Business that chose not to provide mental health coverage. ; Small employers : Businesses with fewer than 50 employees. ; Increased cost : Businesses that documented at least one percent increase in premiums due to implementation of parity requirements.

Issues with the MHPA

Immediately after MHPA was enacted, insurers and employers began finding ways to circumvent the legislation. Larger emphasis on cost sharing, primarily implemented through higher

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s, and out-of-pocket maximums, was one strategy used by insurers. In addition, limits and caps on the number of visits with a care provider or number of days in a hospital visit were imposed. MHPA also did not provide benefits for substance abuse and dependency issues. Lastly, MHPA contained a

that meant that the law would go out of effect after a certain date. The original sunset date was extended six times, through 2007.

Mental Health Parity and Addiction Equity Act

The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA) was enacted in October 2008 and took effect on 1 January 2009.https://www.govinfo.gov/content/pkg/STATUTE-122/pdf/STATUTE-122-Pg3765.pdf#page=1 The main purpose of MHPAEA was to fill the loopholes left by the MHPA. The act requires health insurers as well as group health plans to guarantee that financial requirements on benefits, including co-pays, deductibles, and out-of-pocket maximums, and limitations on treatment benefits such as caps on visits with a provider or days in a hospital visit, for mental health or substance use disorders are not more restrictive than the insurer's requirements and restrictions for medical and surgical benefits. MHPAEA only applies to insurance plans for public and private sector employers with over 50 employees and health insurance issuers who sell coverage to employers with more than 50 employees. Similar to MHPA, MHPAEA requires parity in terms of total annual dollar limits, as well as aggregate lifetime benefits. It is important to note however, that MHPAEA does not explicitly require that any insurance plan offer benefits for mental health and substance abuse disorders. Instead, it enacts parity rules for plans that choose to offer both medical and surgical benefits as well as mental health and substance abuse disorder benefits. This includes out-of-network benefits. If plans choose to offer both types of benefits, MHPAEA mandates that insurers define and make available specific criteria for medical necessity when it comes to mental health and substance abuse disorder benefits. In addition, MHPAEA also requires that insurers provide specific information and reasons in the event that reimbursement or payment for treatment is denied.

Implementation challenges

One main challenge to the implementation of MHPAEA is what is known as "carve-out" health benefits. This refers to mental health benefits that are purchased by employers separately from medical benefits. The "carve-out" vendor may be separate from any number of other vendors providing medical benefits. The law would require the "carve-out" vendor to ensure parity with medical benefits provided by a separate vendor or vendors. In addition, the legislation itself did not create a mechanism to regularly monitor or evaluate the enforcement or implementation of the act. The Federal Parity Law and the follow-up regulatory/sub-regulatory guidance is complex and sometimes ambiguous. Solutions are needed to help implement and enforce the Federal Parity Law and applicable state laws. This includes opportunities to help automate and document NQTL comparability analyses in writing and in operation to further validate that the plan is treating MH/SUD coverage requirements/payments in the same manner as medical/surgical care. Several tools exist that can help promote parity compliance including the U.S. DOL Self-Compliance Tool, the CMS Parity Compliance Toolkit for Medicaid/CHIP, the Six Step Parity Compliance Guide, and ClearHealth Quality Institute’s Online Parity Tool.

Scope

Requirements

Issues with the MHPA

Mental Health Parity and Addiction Equity Act

Implementation challenges

References

Further reading