The Federal Parity Law

Here are some details about the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) to help understand the impact of the law.

• The law amends the Mental Health Parity Act of 1996 to require that group health plans of 51 or more employees that provide both medical and surgical benefits and mental health or substance use benefits must have financial requirements and treatment limitations for mental health/substance use disorder benefits that are no more restrictive than those placed on medical/surgical benefits. Equity coverage applies to all financial requirements, including deductibles, copayments, coinsurance, and out-of-pocket expenses, and to all treatment limitations, including frequency of treatment, number of visits, days of coverage, or other similar limits.
• The law goes into effect on October 3, 2009—a year from the date of its enactment. Some plans renew in October, in such plans Parity will be effective this year.  Most plans will have an effective date of January 1, 2010. Plans maintained under collective bargaining agreements ratified before the enactment date are not subject to the law until they terminate. In the period leading up to the law's becoming effective, federal agencies will develop implementation rules (due 10/3/09) and the public will have an opportunity to comment on proposals.
• The law protects state mental health parity laws, including state coverage mandates, provided they are stronger than federal law and do not interfere with it. Thus, the federal law should be seen as a floor. Michigan law covers two mandates that will be surpassed by the federal law.
• If a group health plan experiences an increase in actual total costs with respect to medical/surgical and mental health/substance use benefits of 1 percent (or 2 percent in the first plan year that the law is in effect), the plan can be exempted from the law. Plans may opt out for only one year and may be under audit by the Department of Health and Human Services, the Department of Labor, and actuarial analysis to assure transparency.