Interim Final Regulations Issued for Mental Health Parity and Addiction Equity Act

The Department of the Treasury, Department of Labor, and the Department of Health and Human Services jointly issued interim final regulations on February 2, 2010, implementing the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEAA) replacing existing regulations in place for the Mental Health Parity Act of 1996.

Effective Date
These regulations generally apply to group health plans for plan years beginning on or after July 1, 2010 (i.e., beginning January 2011 for calendar year plans). The statutory provisions were effective for plan years beginning on or after October 3, 2009; however, the agencies will take into account efforts to comply with a reasonable interpretation of the statutory provisions until the Interim Regulations are effective.

General Information
The Interim regulations prohibit a plan or health insurer from applying any financial requirement or treatment limitation on mental health or substance abuse disorders that are more restrictive than the predominate financial requirement or treatment limitation imposed on substantially all medical/surgical benefits in the same “classification.”
These classifications segment services by network, venue, emergency treatment and prescription drugs, but do not define inpatient, outpatient or emergency care, as these terms differ by plan design and by State regulation. Nevertheless, a plan must apply these terms uniformly for both medical/surgical benefits and mental health/substance use disorder benefits. In addition, the requirements of the interim regulations are applied separately for each coverage unit (i.e. single EE + spouse, etc.).

Definitions
The interim regulations do not offer definitions of “mental health conditions” and “substance abuse disorders,” rather, this is left to each individual plan with the caveat that such definitions must be generally accepted in the relevant medical community.
It is important to remember that the interim regulations do not require a plan to provide any specific mental health or substance abuse disorder benefits. Moreover, providing benefits for one or more mental health conditions or substance abuse disorders does not require the provision of benefits for any other condition or disorder. However, if a plan provides benefits for a mental health condition or substance abuse disorder, benefits must be provided for that condition in each classification for which medical/surgical benefits are provided.
These guidelines have raised questions about certain types of procedures as to whether they are physical or mental health conditions. For example, a smoking cessation benefit could possibly fall into the category of a “substance abuse disorder” (e.g., nicotine dependency) under the interim regulations. A plan sponsor is well advised that if a particular condition falls in to a gray area, and there is substantial doubt as to whether it is physical or mental in nature, the plan should err on the side of conservatism and remove any benefit or financial limitations.
Further, for each benefit classification, there must be a comparison for each type of financial requirement or treatment limitation. For example, co-pay and annual visit limitations applicable to out-patient/in-network medical surgical benefits must be compared to co-pay and annual visit limitations applicable to out-patient/in-network mental health or substance abuse benefits.

Non-Quantitative Treatment Limits
The interim regulations, in addition to enumerating “quantitative” treatment limits (e.g. numerically based limits such as visit limitations), also contain certain “non-quantitative” treatment limits, (such as including medical management standards and requirements for using lower cost therapies before the plan will cover the more expensive therapies). As long as the factors used in applying the non-quantitative limits to mental health and substance use disorder benefits are comparable to, and applied no more stringently than, the factors used in applying to medical/surgical benefits, such criteria is deemed compliant.

Prescription Drugs
To the extent that a plan imposes different levels of financial arrangements on differing tiers of prescription drugs, the plan will satisfy the parity requirement with respect to the prescription drug classification of benefits if the financial requirements are based on reasonable factors (such as generic vs. brand name), determined in accordance with the non-quantitative treatment limitations, and without regard to whether a drug is generally prescribed for medical/surgical benefits or mental health/substance use disorder benefits.
MHPAEA Grab Bag For a plan to be deemed compliant , mental health/substance use disorder providers must be treated the same as primary care providers in terms of comparing financial/treatment limits within the six categories.
Employee Assistance Plans (EAPs) cannot be used as a gatekeeper (no major medical plan mental health benefits until you have exhausted EAP benefits), unless there is a similar exhaustion requirement for medical/surgical.
No cumulative limits may be applied separately to medical/surgical and mental health/substance abuse disorder benefits. For example, a plan cannot have a $1,000 deductible on medical/surgical benefits and a $1,000 deductible on mental health/substance abuse disorder benefits. Instead, a plan must establish a combined deductible for both.
Employers who employed at least 2 employees, but less than 50 employees on business days during the preceding calendar year, are exempt from these requirements. In this case, there is no distinction between full and part-time employees.
Plan providers are encouraged to review their current plan designs for noncompliant designs, and make changes accordingly.