Under New Rules, Plans Offering Mental Health And Substance Use Disorder Benefits Must Ensure Parity In Member Costs And Access To Care

On February 2, 2010, the Centers for Medicare & Medicaid Services, the Internal Revenue Service, and the Department of Labor's Employee Benefits Security Administration published long-awaited regulations implementing the Mental Health Parity and Addiction Equity Act of 2008 (the "MHPAEA").1 The MHPAEA followed the Mental Health Parity Act of 1996, which had previously mandated parity in aggregate lifetime and annual dollar limits between mental health benefits and medical/surgical benefits. The MHPAEA expanded that mandate to encompass substance use disorder benefits and also imposed new restrictions on member costs (referred to as "financial requirements") and treatment limitations. As a result, under the 2008 law, group health plans must treat mental health or substance use disorder ("MH/SUD") benefits comparably to medical/surgical benefits with respect to both member costs and access to care.

The new regulations establish a wide-ranging and detailed set of implementing rules for the MHPAEA.2 Because of the significant impact these rules will have on benefit plan designs, they also have important implications for mental health providers, pharmaceutical companies, and others in the health care industry.

Note, however, that the regulations only mandate that group health plans that choose to offer MH/SUD benefits, as well as medical/surgical benefits, follow this specific set of parity rules. They do not require plans to offer MH/SUD benefits in the first place, or that a plan that provides benefits for any one or more particular mental health condition or substance use disorder provide benefits for any other such condition or disorder. Nor do the rules affect the terms and conditions relating to the amount, duration, or scope of a plan's MH/SUD benefits, other than as specifically set forth in the regulations.

The rules establish three fundamental parity requirements.

First, they refine the existing parity mandates regarding aggregate lifetime and annual dollar limits based on how plans set such limits for medical/surgical benefits, as follows:

Plans with no aggregate lifetime or annual dollar limit on medical/surgical benefits or that apply such limits to less than one-third of all medical/surgical benefits may not impose an aggregate lifetime or annual dollar limit on MH/SUD benefits; Plans with an aggregate lifetime or annual dollar limit on at least two-thirds of all medical surgical/benefits must either: (a) apply those limits to all...