The MHPAEA, officially known as the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, is a federal statute designed to ensure that group health plans and health insurance providers offering mental health or substance use disorder (MH/SUD) benefits do not impose less favorable limitations on these benefits when compared to medical/surgical counterparts.
The MHPAEA, initially targeted at group health plans and their insurance coverage, underwent modifications through the Patient Protection and Affordable Care Act, which was subsequently amended by the Health Care and Education Reconciliation Act of 2010 (commonly referred to as the “Affordable Care Act”).
These changes expanded its scope to encompass individual health insurance coverage as well. Within this framework, the Department of Health and Human Services (HHS) oversees public sector group health plans, often referred to as “non-Federal governmental plans,” while the Departments of Labor and the Treasury have authority over private group health plans.
Employment-related group health plans can fall into two categories: “insured” plans, where insurance is obtained from a group market issuer, or “self-funded” plans. The insurance purchased, whether for an insured group health plan or the individual market, is subject to regulation by the State’s insurance department. Self-funded group health plans, on the other hand, directly cover expenses without acquiring health insurance from an issuer.
The Department of Labor oversees the regulation of private employment-based group health plans, while HHS regulates non-Federal governmental plans. To ascertain whether your group coverage is insured or self-funded and which regulatory entity applies to your benefits, it’s advisable to contact your employer’s plan administrator.
HPAEA doesn’t apply directly to small group health plans, but its requirements indirectly come into play through the essential health benefit (EHB) provisions of the Affordable Care Act, as explained below.
The Protecting Affordable Coverage for Employees Act made changes to the definition of a small employer in both the Affordable Care Act (section 1304(b)) and the Public Health Service Act (section 2791(e)). It generally defines a small employer as having 1-50 employees, with the possibility for states to expand this definition to include 1-100 employees.
The Employee Retirement and Income Security Act and the Internal Revenue Code also align with this definition, considering a small employer as one with 50 or fewer employees. It’s worth noting that certain states may have mental health parity requirements that are stricter than federal regulations. For state-specific information, you can visit www.ncsl.org, enter “mental health parity” on the right-hand side of the page, and select “State Laws Mandating or Regulating Mental Health Benefits.”
MHPAEA Protections Summary
The Mental Health Parity Act of 1996 (MHPA) mandated that for large group health plans, any annual or lifetime dollar limits placed on mental health benefits must be at least as favorable as those imposed on medical/surgical benefits.
MHPAEA upholds the protections outlined in MHPA while introducing substantial additional protections, notably by extending the parity requirements to include substance use disorders.
While the law mandates a general parity in how mental health and substance use disorder (MH/SUD) and medical/surgical benefits are treated in the context of annual and lifetime dollar limits, as well as financial requirements and treatment restrictions, MHPAEA doesn’t obligate large group health plans or health insurance issuers to provide coverage for MH/SUD benefits.
This obligation only applies to those large group health plans and health insurance issuers that opt to include MH/SUD benefits in their offerings. However, the Affordable Care Act builds upon MHPAEA and mandates the inclusion of mental health and substance use disorder services as one of the ten essential health benefit (EHB) categories in non-grandfathered individual and small group plans.
Citation
https://www.cms.gov/marketplace/private-health-insurance/mental-health-parity-addiction-equity