New requirements for employee health care plans originally scheduled to go into effect next month now have been delayed for at least a few more months. Congress has deferred the effective date of the Mental Health Parity and Addiction Equity Act (MHPA) until January 2010. The MHPA does not require health insurance plans to provide mental health or addiction disorder benefits if they do not do so already. However, for group health plans that do choose to provide mental health and/or substance use disorder benefits, the Act requires employers to provide benefits comparable to medical and surgical benefits. The MHPA covers all health care plans of employers with more than 50 employees, including self-insured health care plans.
In sum, an employerâ€™s health care plan that provides mental health or addiction disorder benefits must provide parity in both financial requirements (e.g., deductibles, copayments, coinsurance and out-of-pocket expenses) and treatment. Mental health benefits must be no more restricted than other covered medical benefits. There can be no separate cost-sharing or network requirements or scope and duration limitations that apply only to mental health benefits.
MPHA also contains several disclosure requirements, including providing the reason for denial of benefits upon the request of a plan participant or beneficiary.
There are two exemptions available to plan sponsors:
1. Smaller employers with 50 or fewer employees are generally exempt from MHPA requirements; and
2. There are one-year exemptions available if the increased cost of complying with MHPA exceeds certain percentages. But this exemption has very specific requirements, including extensive documentation of the financial impact and consent to agency inspection of the plan’s relevant benefits records for up to six years after exemption certification.
The DOL, along with the Treasury and the Department of Health and Human Services, has been charged with issuing guidelines and interpretative rules within one year of MHPA’s enactment. Regardless of whether or not the DOL meets this deadline, however, covered plans must comply with MHPA in the plan year beginning after the one-year anniversary of MHPA’s enactment. For most plans, this means the effective date begins on January 1, 2010.
So what should you do now? Contact your employment or benefits attorney to implement a compliant plan that fits your operations and budget before enforcement begins next year. Non-compliance carries significant penalties, and the IRS may continue to impose an excise tax on any plan for failure to comply with MHPA’s requirements. Moreover, you can anticipate that the DOL will issue more detailed procedures and requirements in its anticipated rules.