- Health Care Developments: DOL Issues Additional Mental Health Parity and Addiction Equity Act FAQ
- July 21, 2010 | Authors: Jonathan A. Kenter; Evelyn Small Traub
- Law Firms: Troutman Sanders LLP - New York Office ; Troutman Sanders LLP - Richmond Office
This is the sixth in a series of advisories on Health Care Reform and other recent developments in health care. This e-alert summarizes the new guidance issued by the Department of Labor in the form of a Frequently Asked Question. Employers who are currently evaluating mental health benefits for their 2011 plan design will be interested in this information.
The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), effective as of January 1, 2010 for calendar-year plans, prohibits group health plans from imposing stricter benefit limits (office visit limits) and higher patient cost requirements (co-pays and deductibles) for both mental health or substance abuse disorders than those that apply to general medical or surgical benefits. MHPAEA requires that benefit limits on mental health and substance abuse disorders be no more restrictive than the “predominant” requirements or limitations applied to “substantially all” medical/surgical benefits. Accordingly, a plan that does not impose an annual or lifetime dollar limit on medical/surgical benefits may not impose such a dollar limit on either mental health or substance abuse disorder benefits offered under the plan. The MHPAEA provisions apply to plans offering mental health or substance abuse disorder benefits, but do not require plans to include mental health or substance abuse in their benefits package.
In February 2010, the Treasury Department, Department of Labor and the Department of Health and Human Services issued interim final rules implementing MHPAEA, which apply to plan years starting after June 30, 2010. Among other things, the interim final rules specify that the parity of the benefit limits and financial requirements must be met using only six classifications of benefits: (1) inpatient, in-network, (2) inpatient, out-of-network, (3) outpatient, in-network, (4) outpatient, out-of-network, (5) emergency care, and (6) prescription drugs. The parity comparisons are required to be made within each classification offered by the plan or policy.
Recently, the Department of Labor posted on its website additional guidance regarding the benefit classifications in the form of an additional Frequently Asked Question. The guidance announces an enforcement safe harbor when a plan divides benefits furnished on an outpatient basis into two sub-classifications. The permitted sub-classifications are (1) office visits, and (2) all other outpatient items and services. If a plan establishes these sub-classifications, the plan or issuer may not impose any financial requirement or treatment limitation on mental health or substance use disorder benefits in any sub-classification that is more restrictive than the predominant financial requirement or treatment limitation that applies to substantially all medical/surgical benefits in the sub-classification. Although the interim final rules permit sub-classifications for multi-tier prescription drug formularies, no other sub-classifications are permitted when applying financial requirements and treatment limitation rules under MHPAEA except as allowed under this enforcement safe harbor.