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The Mental Health Parity Act (MHPA) was signed into law
on September 26, 1996. MHPA provides for parity in the application
of aggregate lifetime and annual dollar limits on mental health benefits
with dollar limits on medical/surgical benefits. MHPA's provisions
are subject to concurrent jurisdiction by the Departments of Labor, the
Treasury, and Health and Human Services. |
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Under MHPA, group health plans, insurance companies and
HMOs offering mental health benefits are no longer allowed to set annual
or lifetime dollar limits on mental health benefits that are lower than
any such dollar limits for medical and surgical benefits. A plan
that does not impose an annual or lifetime dollar limit on medical and
surgical benefits may not impose such a dollar limit on mental health
benefits offered under the plan. MHPA's provisions, however, do not
apply to benefits for substance abuse or chemical dependency.
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No. Health plans are not required to include
mental health in their benefits package. The requirements under MHPA
apply only to plans offering mental health benefits.
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Yes. Plans are still able to set the terms and
conditions (such as cost-sharing and limits on the number of visits or
days of coverage) for the amount, duration and scope of mental health
benefits.
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No. There are two exceptions to these new rules.
First, the mental health parity requirements do not apply to small
employers who have fewer than 51 employees. Second, any group health
plan whose costs increase 1 percent or more due to the application of
MHPA's requirements may claim an exemption from MHPA's requirements.
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The increased cost exemption must be taken based on
actual claims data, not on an increase in insurance premiums. The
provisions of MHPA must be implemented for at least 6 months and the
calculation of the 1 percent cost exemption must be based on at least 6
months of actual claims data with parity in place. In addition:
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Plans claiming the increased cost exemption must
notify the appropriate government agency and plan participants and
beneficiaries 30 days before the exemption becomes effective.
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A formula is provided for plans to calculate the
increased cost of complying with parity.
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A summary of the aggregate data and the computation
supporting the increased cost exemption must be made available to plan
participants and beneficiaries free of charge upon written request.
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Once a plan qualifies for the 1 percent increased
cost exemption, it does not have to comply with the parity
requirements for the life of the MHPA provisions, which sunset on
September 30, 2001.
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The MHPA requirements generally apply to group health
plans for plan years beginning on or after January 1, 1998. Under
MHPA, there is also a sunset provision providing that the law
will cease to apply to benefits for services furnished on or after
September 30, 2001.
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