On Tuesday, the Employee Benefits Security Administration (EBSA), Internal Revenue Service (IRS) and the Department of Health and Human Services (HHS) will publish in the Federal Register interim final rules (pdf) under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (“the Act” or “MHPAEA”). These interim final regulations replace prior regulations, and make conforming changes to reflect modifications the MHPAEA made to the original Mental Health Parity Act (MHPA) of 1996 definitions and provisions regarding parity in aggregate lifetime and annual dollar limits, and incorporate new parity standards. The interim final regulations are effective as of April 5, 2010, and generally apply to group health plans and group health insurance issuers for plan years beginning on or after July 1, 2010.

The MHPAEA was signed into law on October 3, 2008, as part of H.R. 1424, the Tax Extender's and Alternative Minimum Tax Relief Act of 2008, a part of the massive financial bailout legislation. The Act amends current requirements under ERISA, the Public Health Service Act and the Internal Revenue Code for parity in mental health benefits offered under a private group health benefit plan. In essence, this law requires private group health benefit plans that provide mental health and/or substance use disorder benefits through a group health benefit plan that also offers medical and surgical benefits do so on an equivalent basis. The Act imposes several plan design requirements on group health benefit plans that offer mental health and/or substance use disorder benefits including equity in cost sharing, treatment limitations, and coverage decision requirements. The Act builds on the current mental health parity law that requires parity for annual and lifetime limits on coverage, and contains specific and narrow exceptions for small group health benefits plans and for increased costs.

The interim final rules, among other things:

• Make a number of changes to the general applicability provisions in the MHPA 1996 regulations;
• Apply the general parity requirement to financial requirements and quantitative treatment limitations;
• Establish a special rule for applying the general parity requirement of the MHPAEA to prescription drug benefits;
• Explain the cumulative financial requirements and quantitative treatment limitations, including deductibles;
• Provide an illustrative list of non-quantitative treatment limitations, including medical management standards; prescription drug formulary design; standards for provider admission to participate in a network; determination of usual, customary, and reasonable amounts; requirements for using lower-cost therapies before the plan will cover more expensive therapies (also known as fail-first policies or step therapy protocols); and conditioning benefits on completion of a course of treatment;
• Clarify that, in order for plans subject to ERISA (and health insurance coverage offered in connection with such plans) to satisfy this requirement that a reason for a denial of reimbursement or payment for services with respect to mental health or substance use disorder benefits be provided, disclosures must be made in a form and manner consistent with the rules for group health plans in the ERISA claims procedure regulations, which provide (among other things) that such disclosures must be provided automatically and free of charge; and
• Stipulate that the increased cost exemption may only be claimed for alternating plan years.

Comments on these rules are due on or before May 3, 2010. Written comments bearing the identification number: RIN 1210-AB30 may be sent or hand-delivered to Office of Health Plan Standards and Compliance Assistance, Employee Benefits Security Administration, Room N-5653, U.S. Department of Labor, 200 Constitution Avenue NW, Washington, DC 20210, Attention: RIN 1210-AB30. Alternatively, comments may be sent via email to E-OHPSCA.EBSA@dol.gov, or submitted to the federal eRulemaking Portal: http://www.regulations.gov.

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