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Summary of “The Paul Wellstone and Pete
Domenici Mental Health Parity and Addiction Equity Act
of 2008”
Purpose. The
Mental Health Parity Act of 2008 will end health
insurance benefits inequity between mental
health/substance use disorders and medical/surgical
benefits for group health plans with more than 50
employees. When the law is enacted, 113 million
people across the country will have the right to
non-discriminatory mental health coverage, including 82
million individuals enrolled in self-funded plans
(regulated under ERISA), who cannot be assisted by State
parity laws.
The Parity Requirement.
The bill amends the Mental Health Parity Act of 1996 to
require that a group health plan of 50 or more employees
(or coverage offered in connection with such a
plan)—that provides both medical and surgical benefits
and mental health or substance use benefits—to ensure
that financial requirements and treatment limitations
applicable to mental health/substance use disorder
benefits are no more restrictive than those requirements
and limitations placed on medical/surgical benefits.
· Equity coverage will apply to all
financial requirements, including deductibles,
copayments, coinsurance, and out-of-pocket expenses, and
to all treatment limitations, including frequency of
treatment, number of visits, days of coverage, or other
similar limits.
· The bill builds on the
current 1996 parity law, which already requires parity
coverage for annual and lifetime dollar limits.
·
Mental health and substance use disorder benefits are
defined broadly to mean benefits with respect to
services for mental health conditions and substance use
disorders, as defined under the terms of the plan and in
accordance with applicable Federal and State law.
·
A plan may not apply separate cost sharing requirements
or treatment limitations to mental health and substance
use disorder benefits.
· If a plan offers
two or more benefit packages, the requirements of this
Act will be applied separately to each package.
·
As under the current Federal parity law, mental health
or substance use benefit coverage is not mandated.
However, if a plan offers such coverage, it must be
provided at parity in accordance with this Act.
Out-Of-Network Benefits. A group health plan (or
coverage) that provides out-of-network coverage for
medical/surgical benefits must also provide
out-of-network coverage, at parity, for mental
health/substance use disorder benefits.
Benefits Management and Transparency. As under the 1996 Mental
Health Parity Act, a group health plan (or coverage) may
manage the benefits under the terms and conditions of
the plan. A plan will make mental health/substance
use disorder medical necessity criteria available to
current or potential participants, beneficiaries or
providers upon request. A plan must also make
reasons for payment denials available to participants or
beneficiaries on request or as otherwise required.
Preservation of State Law. The current HIPAA
preemption standard applies. This standard is
extremely protective of State law. Only a State
law that “prevents the application” of this Act will be
preempted which means that stronger State parity and
other consumer protection laws remain in place.
Small Employer Exemption. As with the current 1996
Federal parity law, small employers of 50 or fewer
employees are exempt from the requirements of the Act.
State parity laws will continue to apply to these
employers, as well as to individual plans.
Cost
Exemption. If a group health plan (or coverage)
experiences an increase in actual total costs with
respect to medical/surgical and mental health/substance
use benefits of 1% (2% in the first plan year that this
Act is applicable), the plan can be exempted from the
law.
· An employer may elect to continue
parity coverage regardless of this cost increase.
·
The exemption shall apply for one plan year.
·
A qualified actuary (member of American Academy of
Actuaries) shall determine and prepare a written report
regarding a plan’s cost increase after a plan has
complied with the Act for the first six months of the
plan year involved.
· A plan shall
promptly and timely notify the Department of Labor (if
self-funded) or the Department of Health and Human
Services (if fully-insured), the appropriate State
agencies, and participants and beneficiaries when it
elects an exemption. Plan notification to Labor or
HHS is confidential and will provide a description of
covered lives in the plan and the actual costs for which
the exemption is sought.
· Labor or HHS
(as appropriate) and State agencies may audit a plan to
determine compliance with the Act when the plan has
elected an exemption.
Compliance Report.
By 2012 and every two years after, the Labor Secretary
shall submit to Congress a report on group health plan
(or coverage) compliance with this Act. The report
will include the results of any compliance audits or
surveys, and if necessary, an analysis of reasons for
any failures to comply with the law.
GAO Study.
GAO will conduct a study that analyzes the specific
rates, patterns and trends in coverage, any exclusion of
specific mental health and substance use diagnoses by
health plans, and the impact of this Act on such
coverage and costs. GAO will provide a report to
Congress within three years (and an additional report
after five years) on the results of the study.
Consumer Assistance. The Labor Secretary, in
cooperation with the HHS and Treasury Secretaries, shall
publish and disseminate guidance and information for
plans, participants and beneficiaries, applicable State
agencies, and the National Association of Insurance
Commissioners concerning the requirements of this Act.
This information will include assistance with questions
and how participants and beneficiaries can obtain
assistance from State consumer and insurance agencies.
Enforcement. As under the 1996 law, Labor,
HHS, and Treasury will continue to coordinate
enforcement of the Federal mental health parity
requirements and are required to issue regulations to
carry out changes made in this Act not later then one
year after the enactment date. Treasury may
continue to impose an excise tax on any plan for failure
to comply with the requirements of the Act.
Effective Date. The Act will apply to plans
beginning in the first plan coverage year that is one
year after the date of enactment. For most plans,
this will mean the effective date begins on January 1,
2010. Plans maintained under collective bargaining
agreements ratified before the enactment date are not
subject to the Act until they terminate (or until
January 1, 2009, if this is a later date). The
current 1996 parity act requirements for annual and
lifetime dollar limits remain in effect for all plans,
while the annual sunset in the 1996 parity act is
eliminated, effective January 1, 2009.
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