The Mental Health Parity Act of 1996 (MHPA) was amended on October 3, 2008, when H.R. 1424 known as the Emergency Economic Stabilization Act of 2008 (EESA) was signed into Law.
How Does this effect Employers? Lets find out.
The EESA requires parity, or in other words, equality in coverage with the most frequent treatment of physical conditions for mental health and substance use disorder benefits. The law does not require a group health plan (or the health insurance coverage offered in connection with such plan) to provide mental health and substance use disorder coverage.
When a plan does provide such benefits, the financial requirements and treatment limitations for these benefits may not be more restrictive than the most frequent financial requirements applied to substantially all medical and surgical benefits covered under the plan. Financial requirements are defined by EESA as deductibles, copayments, coinsurance, and out-of-pocket expenses. In addition, there can be no separate cost-sharing requirements or treatment limitations applicable to only mental health or substance use disorder benefits.
Treatment limitations are generally defined as limits on the frequency of treatment, number of visits, days of coverage or other similar limits on the scope or duration of treatment.
Out-of-Network Providers
If your group health plan provides out-of network coverage, the plan can no longer single out mental health and substance use disorder coverage, it must now provide equal coverage, that is, coverage consistent with medical or surgical coverage. If cost-sharing requirements or treatment limitations are in place for medical and surgical benefits than these requirements and limitations would also apply to the mental health and substance use disorder benefits and vice versa.
Who must Comply:
Group health plans with 51 or more employees in the prior calendar year must comply. EESA does not apply to employers with less than 50 employees in the prior calendar year.
When must Employers Comply:
These changes are effective January 1, 2010. Remember to consider these changes when renewing Health Coverage in 2009 for the 2010 coverage year.
Opting Out
If, as a result of offering this coverage, the cost of coverage rises more than 2 percent in the first year and 1 percent annually thereafter, a group health plan can file an exemption as stated in the voluntary opt-out clause. The determination regarding the increase in cost must be made by an actuary in a written report one year after the year in question or within six months of that year. If the plan qualifies it must file with the Secretary of Labor. The Secretary of Labor reserves the right to then audit the requesting plan’s books and records during the six-year period following the exemption request.
In Summary
Adjust the plan benefits to comply with the new law if your health plan is more restrictive for mental health (i.e., depression, eating disorders, schizophrenia) or substance use disorder (i.e., alcohol or drug abuse) than for the most frequent treatment of physical conditions (i.e., cancer, broken bones or heart disease)
Revisit limits on hospital inpatient days and outpatient days for parity or equality.
Eliminate or Apply separate cost-sharing requirements or treatment limitations to all conditions to comply with the law.
Provide out-of-network coverage for mental health and substance abuse if it is provided for other conditions.
ERISA
EESA also added a new disclosure provision for ERISA. The criteria for medical necessity decisions with respect to mental health or substance use disorder under the group plan must be made available by the plan administrator (or the insuring insurance carrier) upon request to any current or potential participant, beneficiary or contracting provider. The reason for any claim denial or denial of a reimbursement request for mental health or substance use disorder must be made available to a participant or beneficiary upon request or as otherwise required.
Please contact Michael F. Yates & Company Inc. for additional details. CONTACT MFYCO |
