Mental Health Parity Act Author:    Posted under: Health InsuranceHealth Insurance questions answeredHealth Insurance Types


Mental Health Parity and Addiction Equity Act (2008) or MHPAEA, helps prevent group health insurance plans of which mostly offered by employers, from restricting patients from accessing care by putting limits on benefits and requiring higher patient costs than those of general medical or surgical benefits.

As of January 1, 2010, employers are prohibited by the departments of Health and Human Services, Labor and the Treasury from requiring separate deductibles for mental health and medical treatment under their new proposed parity rules.

Unlike before where insurers were able to work around the system by imposing maximum numbers of provider visits and days they would cover for psychiatric hospitalizations, this law prevents or prohibits imposing of greater limits on co-insurance, co-pays, numbers of visits, and even number of days that are covered for hospital stays due to mental health conditions by these group health plans.

Under the new MHPAEA regulations, employers with 50 or more workers whose group health plans choose to offer mental health or substance use disorder benefits would have this applicable to them.

The new law states that there must be an equal treatment of patients needing standard medical and surgical coverage and those needing of mental health and substance use disorder treatment by any group health plans that are offering these services. This is in terms of their benefit limits, out-of-pocket costs, and other practices like utilization reviews and prior authorizations.

The essence is that the health insurance coverage are prohibited to apply any requirement financially or any limits on mental health treatments or substance use disorder benefits in any categorization that  further restrains the principal financial condition or treatment limit that is applied to significantly all surgical or medical benefits in the same categorization.

Requirements and Exemptions

The act, as the name suggests requires parity of medical and surgical benefits with mental health benefits in accordance to the application of cumulative lifetime and annual dollar limits under a group health plan.

It states that employers should preserve discretion concerning the scope and extent of mental health benefits that they offer to their employees and even their families, including limits on numbers of visits or days of coverage, and even cost sharing.

The law however has some exemptions such as it does not apply to any group health plan or coverage if the appliance of the said provisions results to an increase on the cost under the plan or has at least one percent under the coverage. It also does not apply to any employer who hired an average of between 2 and 50 workers on business days during the previous calendar year, and who employs at least two workers on the first day of the plan year. Also, it does not pertain to benefits for chemical dependency or substance abuse.

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