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 of 1996 (MHPA) is federal legislation which limited 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†were defined by the health plan, and the MHPA did not require group health plans to include mental health coverage in their benefits packages. MHPA also did not apply to health plans sponsored by employers with fewer than 51 workers and did not apply to health insurance coverage in the individual market.
In addition, the MHPA did 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 did not apply to benefits for substance abuse or chemical dependency.
The Mental Health Parity Act was signed into law on September 26, 1996. The original legislation contained a sunset provision which was extended six times.
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 in October 2007, and was signed into law, as a last-minute addition to the Emergency Economic Stimulus Act on October 3, 2008.
The 2008 bill, known as the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA), is not simply a renewal of the 1996 legislation. Similar to the 1996 legislation, the new measure requires health insurance plans that offer mental health coverage to provide the same financial and treatment coverage offered for other physical illnesses and includes an exemption for small business with fewer than 50 employees. The MHPAEA actually expands parity by including deductibles, co-payments, out-of-pocket expenses, coinsurance, covered hospital days, and covered out-patient visits. Another major improvement is that the new law includes parity for substance abuse treatment. (Last Update 1/10/2009)
Links
References
- Centers for Medicare & Medicaid Services. The Mental Health Parity Act. (Dec 4, 2005) Available at: . Accessed June 15, 2007January 10, 2009.
- U.S. Department of Labor. Mental Health Parity Act. (February 2007) Available at: . Accessed June 15, 2007January 10, 2009.
- Full MHPAEA language: http://www.cms.hhs.gov/HealthInsReformforConsume/Downloads/MHPAEA.pdf [pdf]. Accessed January 10, 2009.