HHS, Labor and Treasury Departments Release Final Mental Health Parity Rules

On Friday, November 8, 2013, the Health and Human Services (HHS), Labor, and Treasury Departments jointly released long-awaited final rules to implement key portions of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008. Interim rules had been published in 2010. The rules will be published in the Federal Register on November 13, 2013, and will take effect 60 days thereafter. 

The rules implement the requirement for parity between mental health or substance use disorder benefits and medical/surgical benefits under group health plans and group and individual health insurance coverage. The mental health parity provisions apply to group health plans and health insurance issuers for plan/policy years beginning on or after July 1, 2014. Until the final rules become applicable, plans and issuers must continue to comply with the mental health parity provisions of the interim final regulations.

The finalization of these rules is more significant because of the new federal "essential" benefit mandate for mental health and substance abuse coverage in the Affordable Care Act. HHS estimates that 62.5 million Americans will either gain mental health coverage for the first time or benefit from parity protection as a result of ACA and MHPAEA. The final rule on essential health benefits (EHBs), issued by HHS earlier this year, requires health insurance issuers offering non-grandfathered health insurance coverage in the individual and small group markets — through an Affordable Insurance Exchange (also called a Health Insurance Marketplace or Marketplace) or outside of an Exchange — to comply with the requirements of the MHPAEA regulations in order to satisfy the requirement to cover EHB.

In general, the final rules incorporate clarifications issued by the Departments through FAQs since the issuance of the interim final regulations and provide new clarifications on issues such as NQTLs (non-quantitative treatment limitation provisions). How to regulate these issues — for example, medical reviews of when a patient should receive a certain treatment or access a certain number of visits a week — has been particularly controversial. Key highlights of the rules include:

• The rules require health plans to cover the treatment of mental illness or drug or alcohol abuse at the same level (co-payments, deductibles and limits on visits to health care providers cannot be more restrictive or less generous) as they cover other health care treatment, although it does not mandate mental health benefits.
• States may choose to mandate specific mental health benefits, and MHPAEA requires that such benefits must be in parity with medical/surgical benefits in the same policy.
• The rules state that the general parity requirement applies separately for each type of financial requirement (deductibles, co-payments, co-insurance and out-of-pocket maximums) or treatment limit.
• The rules clarify how parity applies to residential treatments and outpatient services, where much of the care for addictive or mental illness occurs.
• The mental health parity provisions do not apply to coverage provided under Medicaid or Medicare.

The rules were announced by HHS Secretary Kathleen Sebelius to the Rosalyn Carter Symposium on Mental Health at The Carter Center in Atlanta, Georgia. The timing is important for the Obama administration, which is suggesting the rules are critical to its program for curbing gun violence, in addition to establishing key concepts for the mental health benefits under the Affordable Care Act (ACA) implementation.