Employee Benefits-FAQs Issued For Mental Health Parity Act

As noted in an earlier blog, the Departments of Health and Human Services (“HHS”), Labor and the Treasury (the “Departments”) have issued FAQs for the Mental Health Parity Act and some other statutory requirements. Some of the highlights pertaining to the Mental Health Parity Act (the “Act”) are:

Generally. The Act (more formally known as the Mental Health Parity and Addiction Equity Act of 2008) supplements the Mental Health Parity Act of 1996. The Act requires that a group health plan’s financial requirements and treatment limitations imposed on coverage of mental health and substance use disorder cannot be more restrictive than the predominant financial requirements and treatment limitations that apply to substantially all of the plan’s medical and surgical benefits. The Act is effective for plan years beginning after October 3, 2009. Interim final rules on the Act apply for plan years beginning on or after July 1, 2010.

Exemption. For Small Employers. Small employers remain exempt. For plans subject to ERISA and the Code, a “small employer” is one that has no more than 50 employees.

Criteria For Determinations. The Act and its implementing regulations state that the criteria for medical necessity determinations made under the plan, with respect to mental health or substance use disorder benefits, must be made available by the plan administrator to any current or potential participant, beneficiary, or contracting provider upon request.

ERISA Disclosure. Under ERISA, documents with information on the medical necessity criteria for both medical/surgical benefits and mental health/substance use disorder benefits are plan documents, and copies of plan documents must be furnished within 30 days of a participant’s request. See ERISA regulations at 29 CFR 2520.104b-1. Additionally, if a provider or other individual is acting as a patient’s authorized representative in accordance with the Department of Labor’s claims procedure regulations at 29 CFR 2560.503-1, the provider or other authorized representative may request these documents.

Increased Cost Exemption. The Act contains an increased cost exemption, for plans that make changes to comply with the law and incur an increased cost of at least two percent in the first plan year that begins after October 3, 2009, or at least one percent in any subsequent plan year. When this cost is incurred in a plan year, the plan is exempt from the Act for the following plan year. The FAQs provide rules for applying this exemption.