The Mental Health Parity ActLinks to Content on This Page:Summary Questions and Answers Interim Rules Statutory Text and Transition Notices SummaryOverviewThe Mental Health Parity Act of 1996 (MHPA) is a federal law that may prevent your group health plan from placing annual or lifetime dollar limits on mental health benefits that are lower - less favorable - than annual or lifetime dollar limits for medical and surgical benefits offered under the plan. For example, if your health plan has a $1 million lifetime limit on medical and surgical benefits, it cannot put a $100,000 lifetime limit on mental health benefits. The term “mental health benefits” means benefits for mental health services defined by the health plan or coverage. Although the law requires “parity,” or equivalence, with regard to dollar limits, MHPA does NOT require group health plans and their health insurance issuers to include mental health coverage in their benefits package. The law's requirements apply only to group health plans and their health insurance issuers that include mental health benefits in their benefits packages. If your group health plan has separate dollar limits for mental health benefits, the dollar amounts that your plan has for treatment of substance abuse or chemical dependency are NOT counted when adding up the limits for mental health benefits and medical and surgical benefits to determine if there is parity. Coverage under MHPA MHPA applies to most group health plans with more than 50 workers. MHPA does NOT apply to group health plans sponsored by employers with fewer than 51 workers. MHPA also does NOT apply to health insurance coverage in the individual market. But you should check to see if your State law requires mental health parity in other cases. An Example of a Coverage Provision that Violates MHPA Protection Your plan has a limit of 60 visits per year for mental health benefits, along with a fixed dollar limit of $50 per visit - a total annual dollar limit of $3,000. It places no similar limits on medical and surgical benefits. MHPA does NOT allow this inequality to exist for group health plans covered by the law. Restrictions Allowed under MHPA Group health plans may impose some restrictions on mental health benefits and still comply with the law. MHPA does NOT prohibit group health plans from:
Answers to Commonly Asked Questions
Interim RulesInterim rules implementing the MHPA were published on December 22, 1997. The rules clarify that a plan or insurer applies annual or lifetime dollar limits on “substantially all” medical/surgical benefits if such limits apply to at least two-thirds of all such benefits. The rules specify how a plan or insurer must calculate whether the portion of medical/surgical benefits subject to a limit represents one-third or two-thirds of all medical/surgical benefits. The results of this calculation will determine how a plan or insurer that offers medical/surgical and mental health benefits must apply any annual or lifetime dollar limits. A plan or insurer offering separate benefit packages must apply these rules separately to each package. These rules apply regardless of whether mental health benefits are administered separately under the plan. These rules explain how an insurer or plan is to calculate whether the requirements of the MHPA increase costs by at least one percent, which would qualify a plan/insurer for an exemption. The rules also explain how a plan or insurer must notify participants and beneficiaries of the one percent cost exemption. A plan meeting the exemption requirements may change insurers without having to again meet the exemption requirements. The rules generally apply to plan years beginning on or after January 1, 1998, although there are certain limits on the government’s ability to take enforcement actions against health plans with respect to MHPA.
Statutory Text and Transition NoticesThe Mental Health Parity Act is a Federal law, the text of which can be found at the MHPA Statutory Text link below. The Mental Health Parity Act permits plans to opt out of its requirements if to comply would increase the plan’s costs by at least one percent. The MHPA’s rules state that no enforcement action will be taken against a group health plan based on a violation that occurs before April 1, 1998, solely because the plan claimed the increased cost exemption based on assumptions that were inconsistent with the opt-out rules published in the December 22, 1997, rules. However, for a plan to gain such protections, it must have adopted a plan amendment meeting certain requirements by March 31, 1998, and have notified the appropriate Federal agency by March 31, 1998. Nonfederal governmental plans were directed to notify the Department of Health and Human Services. A list of such plans that had notified HHS of their decision to use the transition period can be found at the Transitional Notices from Nonfederal Plans link below.
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