The Mental Health Parity and Addiction Equity Act (MHPAEA) is a 2008 federal law that amended the Mental Health Parity Act of 1996 (MHPA). This law ensures people with mental health and substance use disorders are offered benefits comparable to those for medical/surgical health coverage. Policies and laws surrounding the MHPAEA were first introduced in 1961 under President Kennedy. At its core, the MHPAEA’s parity rules are a nondiscrimination measure.
This law underscores the notion that those suffering from mental health and substance use disorders are just as worthy of protection as those with medical, physical or surgical needs. Like so many broad, complex bodies of law, however, the MHPAEA is not always implemented well in the self-funded industry or America’s healthcare system. Open, clear communication, consulting with professionals, and standardization of tools and materials can often help with establishing and adhering to proper compliance procedures.
It is important to be aware of the protections, limitations, and requirements created by the Mental Health Parity and Addiction Equity Act.
The MHPAEA is designed to provide legal protections regarding access to care for those who may need mental health or substance use disorder services. To comply with specific requirements of the law, therefore, health plans need to pay close attention to the benefits they offer.
Protections under the MHPAEA include financial requirements and treatment limitations. The MHPAEA is best-known for its parity requirement, which requires that benefits related to mental health or substance use disorder treatment cannot have more stringent restrictions or limitations than those placed on comparable medical and surgical benefits. Examples of treatment limitations that are easily quantifiable, and therefore easily comparable between mental health/substance use disorder benefits and medical/surgical benefits include copayments, deductibles, coinsurance, and visit limitations. These are called quantitative treatment limitations (QTL).
Under MHPAEA, individuals are also protected against more stringent non-quantitative treatment limitations (NQTL). These too cannot be applied more strictly to mental health and substance use disorder services when compared to medical and surgical services. Examples include precertification requirements, medical necessity requirements, inadequate network design, and provider credentialing. To ensure compliance with this NQTL parity requirement, the Consolidated Appropriations Act imposes an additional MHPAEA requirement that health plans subject to the law perform comparative analyses to demonstrate parity.
MHPAEA Regulations
MHPAEA regulations mandate that a health plan’s identification of whether a given benefit is related to medical/surgical or mental health/substance use disorders must be in accordance with general standards of current medical practice. Regulations also outline the MHPAEA’s disclosure provisions requiring that the appropriate criteria for medical necessity determinations are made available in certain situations.
The MHPAEA does not require health plans to cover mental health or substance use disorder benefits. If a health plan does cover these benefits, however, the plan becomes subject to parity-related requirements, which involve conditions of coverage, facility restrictions, provider reimbursement rates and strategies, and underlying criteria used to approve or deny claims.
Some exceptions exist for MHPAEA requirements. These include:
- Increased cost exemptions: Healthcare plans and issuers may be eligible for an exemption if they see an increased cost of at least 2% in the first year that MHPAEA applies to the plan or coverage.
We urge you to perfect your health plan with The Phia Group, LLC. Our goal is to make health benefits more affordable for employers and employees alike. We are committed to delivering custom solutions to meet your specific needs, through plan document drafting, subrogation and overpayment recovery, claim negotiation, general consultation, fiduciary transfer, and much more.
Contact us today to learn more about The Phia Group and how we can help empower your plans.