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Final Rule Issued Requires Parity for Mental Health Care Benefits

On November 8, 2013, the Departments of Labor, Health and Human Services and the Treasury jointly issued a final rule to increase parity between mental health and substance use disorder benefits and medical and surgical benefits in group and individual health plans.

The rule requires that "health plan features like copays, deductibles and visit limits are generally not more restrictive for mental health/substance abuse disorders benefits than they are for medical/surgical benefits." In plain English, that means that insurers will not be able to charge more for mental health copays, deductibles and visit limits than they would for treatment for physical health issues.

It implements the Mental Health Parity and Addiction Equity Act, which was passed in 2008 to ensure equality of treatment between medical and mental health and substance abuse treatment. According to the Department of Labor, the Mental Health Parity and Addiction Equity Act applies to plans sponsored by private and public sector employers with more than 50 employees, including self-insured (regulated by ERISA) as well as fully insured arrangements (regulated by state law). It also applies to health insurance issuers who sell coverage to employers with more than 50 employees.

The Mental Health Parity and Addiction Equity Act did not mandate that a group health plan provide mental health or substance abuse disorder benefits. It simply required that a plan that does provide such benefits, provides them in a manner that is in compliance with the Act's parity provisions.

However, the Affordable Care Act took the next step, and requires coverage of mental health and substance use disorder services as one of ten essential health benefits categories.

This final rule, which implements how parity between treatments will be achieved, also included the following additional provisions:

-- Ensures that parity applies to intermediate levels of care received in residential treatment or intensive outpatient settings;
-- Clarifies the scope of the transparency required by health plans, including the disclosure rights of plan participants, to ensure compliance with the law;
-- Clarifies that parity applies to all plan standards, including geographic limits, facility-type limits and network adequacy; and
-- The exception to parity requirements for "recognized clinically appropriate standards of care" was removed.

"This final rule breaks down barriers that stand in the way of treatment and recovery services for millions of Americans," said Health and Human Services Secretary Kathleen Sebelius in a released statement. "Building on these rules, the Affordable Care Act is expanding mental health and substance use disorder benefits and parity protections to 62 million Americans. This historic expansion will help make treatment more affordable and accessible."

The mental health parity provisions of these final regulations apply to group health plans and health insurance issuers for plan years beginning on or after July 1, 2014. The regulations do not apply to Medicaid plans.

A copy of the final rules can be found here.

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