News Flash November 11, 2013 - Final Mental Health Parity Regulations Issued


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News Flash November 11, 2013 - Final Mental Health Parity Regulations Issued

  1. 1. News Flash: November 11, 2013—Final Mental Health Parity Regulations Issued The Departments of Health and Human Services, Labor, and Treasury jointly released final regulations governing the obligation of group and individual health plans to provide parity between mental health/substance use disorder benefits and medical/surgical benefits. These regulations implement the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), which requires that health plan features like copays, deductibles, and visit limits generally not be more restrictive for mental health/substance use disorder benefits than they are for medical/surgical benefits. MHPAEA generally became effective for plan years beginning after October 3, 2009. Interim final rules were issued and became applicable for plan years beginning on or after July 1, 2010. The final regulations replace the interim final rules and generally apply to group health plans and health insurance issuers for plan years beginning on or after July 1, 2014 so, for plans and insurance policies with calendar year terms, the final regulations are effective January 1, 2015. Until the final regulations become effective, plans and insurers are required to continue to comply with the interim final rules. The following briefly summarizes the changes that the final regulations made to the interim final rules: • Parity requirements apply to benefits for intermediate levels of care for mental health conditions and substance use disorders, like residential treatment, partial hospitalization and intensive outpatient treatment. Plans and insurers are required to identify for participants and insureds what constitutes an intermediate service and treat those intermediate level services comparably as compared to the medical/surgical benefits provided under the plan. • All plan standards are subject to parity, including geographic limits, facility-type limits and network adequacy. • The scope of how transparent a health plan must be regarding its coverage of mental health and substance use disorder benefits is clarified, including the disclosure rights available to plan participants. • An exception for differences in nonquantitative treatment limitations between medical/surgical benefits and mental health or substance use disorder benefits based on clinically appropriate standards of care was eliminated, because it was determined to be confusing, unnecessary, and subject to potential abuse. • Standards and procedures for claiming an increased cost exemption under the MHPAEA are established, including a formula for calculating increased cost.
  2. 2. • Self-insured state and local government plans that wish to opt-out of MHPAEA requirements are provided directions to HHS guidance on that process. In addition to these final regulations, FAQs addressing Mental Health Parity implementation were published. There was also a government study released, which reported that large employer-based plans had made substantial changes to their benefit designs in response to enactment of the MHPAEA in 2008, including the removal of noncompliant financial requirements and the elimination of unequal quantitative treatment limits (including inpatient day limits and outpatient visit limits) and differences in cost-sharing for prescription medications and emergency care. The study also noted that there was room for improvement among large employer-based plans. Willis’ National Legal & Research Group will continue to review and provide timely updates on these and other related changes in health and welfare benefit law that affect employers. The information in this publication is not intended as legal or tax advice and has been prepared solely for informational purposes. You may wish to consult your attorney or tax adviser regarding issues raised in this publication.