Mental Health Parity

How It Works

The Mental Health Parity Act of 1996 (MHPA) is federal legislation which limits the ability of group health plans to place annual or lifetime dollar limits on mental health benefits that are lower than annual or lifetime health dollar limits for medical and surgical benefits offered under the plan. However, the benefits provided under the term “mental health benefits” are defined by the health plan, and the MHPA does not require group health plans to include mental health coverage in their benefits packages. MHPA also does not apply to health plans sponsored by employers with fewer than 51 workers and doe not apply to health insurance coverage in the individual market.

In addition, the MHPA does not limit group health plans from imposing other restrictions on mental health benefits such as:

Increasing co-payments limiting the number of visits for mental health benefits
Imposing limits on the number of covered visits, even if there is no similar limit for medical or surgical visits
Having different cost-sharing arrangement, such as higher co-pays for mental health benefits

The law also does not apply to benefits for substance abuse or chemical dependency.

History

The Mental Health Parity Act was signed into law on September 26, 1996. The original legislation contained a sunset provision which has been extended six times. The current extension runs through December 31, 2007.

Policy Update

In September 2007 the Senate passed legislation that would require health insurers to provide the same level of coverage for treatment of mental illnesses as they do for physical illnesses. A House companion bill passed in committee n October 2007 and will go to the House floor. (Last update 10/17/07)

Links

Surgeon General’s Report on Mental Health

Substance Abuse and Mental Health Services Administration

References

Centers for Medicare & Medicaid Services. The Mental Health Parity Act. (Dec 4, 2005) Available at: www.cms.hhs.gov/HealthInsReformforConsume/ 04_TheMentalHealthParityAct.asp. Accessed June 15, 2007.

U.S. Department of Labor. Mental Health Parity Act. (February 2007) Available at: www.dol.gov/ebsa/newsroom/fsmhparity.html. Accessed June 15, 2007.