The Mental Health Parity and Addiction Equity Act (MHPAEA), ensures that individuals with mental health and substance use disorders have the same access to treatment as those seeking care for medical and surgical conditions.
But achieving parity is complex. This article summarizes past and current legislative efforts to close the gap between mental health/substance use disorder benefits and medical/surgical benefits.
Legislative efforts
The Mental Health Parity Act (MHPA) of 1996 was landmark legislation. It mandated parity in annual and lifetime dollar limits for mental health benefits compared to medical and surgical benefits in large group health plans. However, its reach was limited. It didn’t have equal treatment or financial requirements, nor did it extend to substance use disorders.
In 2008, the MHPAEA was enacted to address those gaps. It expanded parity protections to include mental health and substance use disorders. It also ensured that health plans could not impose more restrictive limits or treatment requirements on these services than on medical and surgical benefits.
Despite this legislation, the gap between mental health/substance use disorder and medical/surgical benefits has grown, according to the Departments of Labor, Treasury, and Health and Human Services. Section 203 of the Consolidated Appropriations Act (CAA) of 2021 was another legislative attempt to narrow the gap. This time, the strategy was to increase transparency in plan function and hold employers directly responsible for parity failures.
Legal standards
MHPAEA mandates parity between mental health/substance use disorder benefits and medical/surgical benefits through financial requirements, quantitative treatment limits (QTLs) and more complex nonquantitative treatment limitations (NQTLs).
QTLS are number limits on treatment, such as the number of sessions a patient can have or the number of days they can stay in a treatment facility.
NQTLs are other limits on benefits, such as medical necessity determinations, provider network standards and reimbursement rates, and fail-first or step-therapy protocols. An example might be a plan refusing to cover a more expensive therapy unless a less expensive option has been proven ineffective.
Parity in cost and quantity
It is a violation under MHPAEA for a plan to impose more restrictive financial requirements or lower QTLs on mental health/substance use disorder benefits compared to medical/surgical benefits. More restrictive financial requirements might be higher copayments, deductibles or coinsurance.
Parity in controls and function
MHPAEA also requires plans to function and operate the same. Plans must have consistent access and availability, regardless of whether the care is for a mental health/substance use disorder or medical/surgical treatment. For example, if a plan has more rigorous prior authorization processes for mental health/substance use disorder treatments than for medical/surgical services, it would likely violate MHPAEA.
Latest developments
The CAA requires that plans and specifically plan sponsors show their work when asserting MHPAEA parity. This can be challenging, as it requires detailed data and cooperation from third-party administrators (TPAs) and pharmacy benefit managers (PBMs). TPAs and PBMs may need to adjust their own practices to ensure MHPAEA compliance.
Action step: Request your plan’s current MHPAEA NQTL analysis from your carrier, if you offer a fully insured plan. If your plan is self-insured, request it from your TPA and PBM. If it is a short report, request a more detailed analysis in line with the MHPAEA final rules. (The final rules amend existing MHPAEA provisions and add new ones.)
Section 203 also requires the Departments of Labor, Treasury, and Health and Human Services to conduct MHPAEA audits annually and report their findings to Congress. Agency requests for a comprehensive NQTL analysis are made to the plan sponsor, who bears ultimate fiduciary responsibility for compliance.
Noncompliant plans typically require corrective actions. These may include revising plan terms retroactively, reprocessing claims and simultaneously improving access to certain mental health/substance use disorder benefits. Practically speaking, this is an arduous and expensive task
Be proactive about MHPAEA compliance
Take steps now to ensure your plan’s MHPAEA compliance:
- Review your NQTL policies with your TPA and PBM.
- Analyze any changes to your benefits, design or service providers.
- Conduct regular audits.
- Document your compliance as part of fiduciary governance
Looking for help?
For personalized guidance on MHPAEA compliance and support with your benefits strategy, connect with our employee benefits team.
This content is for informational purposes only and not for the purpose of providing professional, financial, medical or legal advice. You should contact your licensed professional to obtain advice with respect to any particular issue or problem. Please refer to your policy contract for any specific information or questions on applicability of coverage.
Please note coverage can not be bound or a claim reported without written acknowledgment from a OneGroup Representative.
This content is for informational purposes only and not for the purpose of providing professional, financial, medical or legal advice. You should contact your licensed professional to obtain advice with respect to any particular issue or problem.
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