Federal Law > Managing Employees > The Mental Health Parity Act

The Mental Health Parity Act

 

The Mental Health Parity Act (MHPA) was signed into law on September 26, 1996. This law provides for parity in the application of limits to certain mental health benefits. The following information is intended to provide general guidance on frequently asked questions on MHPA.

How will the Mental Health Parity Act affect employee benefits? Under MHPA, group health plans, insurance companies and HMOs offering mental health benefits will not be allowed to set annual or lifetime limits on mental health benefits that are lower than any such limits for medical and surgical benefits. A plan that does not impose an annual or lifetime limit on medical and surgical benefits may not impose such a limit on mental health benefits. MHPA's provisions, however, do not apply to benefits for substance abuse or chemical dependency.

Will MHPA require all health plans to provide mental health benefits? No. Health plans are not required to include mental health coverage in their benefits package. The requirements under MHPA apply only to plans offering mental health benefits.

May a plan impose other restrictions on mental health benefits? Plans may continue to set the terms and conditions (such as cost-sharing and limits on the number of visits or days of coverage) for the amount, duration and scope of mental health benefits.

Do all plans offering mental health benefits have to meet the parity requirements? No. There are two significant exceptions to these new rules. The mental health parity requirements do not apply to small employers who have between 2 and 50 employees or to any group health plan whose costs increase one percent or more due to the application of these requirements.

When do the Mental Health Parity Act requirements take effect? Are these changes permanent? The mental health parity requirements apply to group health plans for plan years beginning on or after January 1, 1998. There is a so-called "sunset" provision in the law providing that these requirements will cease to apply to benefits for services furnished on or after September 31, 2001. The Mental Health Parity Act does not have a separate effective date for collectively bargained plans.

DOL Assistance. The Labor Department also is making available through its publication hotline (1-800-998-7542) a supplement to its booklet “Questions and Answers: Recent Changes in Health Care Law.” This supplement provides an overview of the new MHPA provisions and answers to the most frequently-asked questions. The interim final regulations, the Question and Answer booklet, and the supplement are also available at the Department’s website at http://www.dol.gov/dol/pwba/. For more information call: (202) 219-8211.

SOURCES

  1. This chapter is adapted from Questions & Answers: Recent Changes in Health Care Law, U.S. Department of Labor, Pension and Welfare Benefits Administration, April, 1997.
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