As previously reported, the federal agencies responsible for drafting the rules implementing the Affordable Care Act (“ACA”) (the U.S. Department of Labor, the U.S. Department of Health and Human Services, and the U.S. Treasury Department) recently issued FAQ Part XVIII, regarding implementation of the market reform provisions of the ACA. Question 12 in FAQ Part XVIII includes guidance as to the effect of the ACA on the Mental Health Parity and Addiction Equity Act of 2008 (“MHPAEA”).
The MHPAEA amended ERISA, the Internal Revenue Code, and the Public Health Safety Act to provide greater parity between mental-health and substance-use disorder benefits and medical and surgical benefits. More specifically, the MHPAEA mandates that financial requirements (e.g., copayments, coinsurance, or deductibles) and treatment limitations (e.g., limitations on the frequency of treatment, number of out-patient visits, or amount of days covered for in-patient stays) applicable to mental-health and substance-use disorder benefits generally can be no more restrictive than the requirements and limitations applied to medical and surgical benefits (the “Parity Regulations”). The MHPAEA applies to (1) plans sponsored by private- and public-sector employers with fifty-one or more employees and (2) the health-insurance issuers selling coverage to those employers. Importantly, the MHPAEA does not require that plans and issuers cover mental-health and substance-use disorder benefits—compliance is only required where a plan or issuer chooses to provide such benefits.
However, the ACA expanded the MHPAEA’s reach by including mental-health and substance-use disorder services as one of the ten essential health benefit (“EHB”) categories. Accordingly, non-grandfathered health plans in the individual and small group markets must comply with the Parity Regulations. Additionally, section 1563 of the ACA extends MHPAEA protection to the individual market with regard to both grandfathered and non-grandfathered coverage. Thus:
- non-grandfathered individual and small group market coverage must provide mental-health and substance-use disorder benefits that comply with the Parity Regulations, unless such coverage is subject to the Department of Health and Human Services’ November 14, 2013 transitional policy (providing conditions under which certain individual or small group market coverage will not be considered out-of-compliance with the ACA’s market reform provisions);
- grandfathered individual market coverage is not subject to the EHB provisions and therefore not required to provide mental-health or substance-use disorder benefits; however, to the extent that policies do cover these benefits, such coverage must comply with the Parity Regulations; and
- grandfathered small group market coverage is required to comply with neither the EHB provisions nor the MHPAEA.