Filed Under:Health Insurance, Individual Health

Final MHPAEA regs include exemption formula

(AP photo/Schneider Lab, University of Pittsburgh)
(AP photo/Schneider Lab, University of Pittsburgh)

Federal regulators will make employers that want to get out of the mental health parity requirements go through a rigorous testing and documentation process.

In theory, the law lets employers get out of complying with the parity requirements if they can show complying has increased their costs at least 2 percent during the first plan year in which the requirements apply or at least 1 percent in later plan years.

To qualify for that exemption, an employer normally will have to come up with five years of plan spending data, and a note certifying benefits cost increases "certified by a qualified and licensed actuary who is a member in good standing of the American Academy of Actuaries," officials say in the preamble to the new final regulations, for the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA).

See news coverage of the final regulations here.

Officials at three departments -- the U.S. Treasury Department, the U.S. Labor Department, and the U.S. Department of Health and Human Services (HHS) -- based the final regulations on temporary regulations released in 2010. The departments are preparing to publish the final rule in the Federal Register Nov. 13. 

The regulations would start to take effect in the first plan or policy year starting on or after July 1, 2014.

The MHPAEA replaces an earlier parity law adopted in 1996. The new act does not require a plan to offer mental health or addiction treatment benefits, but it requires plans that do offer behavioral health benefits to offer plan terms for those benefits that are no more restrictive than the terms for "substantially all" of the plans' medical and surgical benefits.

In practice, the rule means that the terms for behavioral health benefits must be about as generous as the terms for about two-thirds of the medical benefits provided.

HHS has developed separate regulations, based on the Patient Protection and Affordable Care Act (PPACA) essential health benefits (EHB) package rules, that require individual policies and small-group policies to offer mental health and substance abuse treatment benefits, at parity with medical health benefits, starting in 2014.

In the final regulations, officials give many concrete examples of how to apply the rules and deal with many questions raised by commenters.

  • If a state law requires an insurer or plan to offer a behavioral health benefit, the parity rules apply to that state-required benefit.
  • Federal officials are not inclined to apply the parity rules to mental health benefits that are part of employee assistance plans, but they said they might rethink that if they see EAPs providing substantial medical benefits that fail to provide parity.
  • Simply offering the mental health and substance abuse screening services required by the PPACA preventive services package program will not trigger a need for a plan to comply with the parity rules. 

Officials are estimating that the parity rules might increase overall claims costs about 0.4 percent. 

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