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MENTAL HEALTH
PARITY AND ADDICTION EQUITY ACT OF 2008
There is only
a short time left for group health plans to come into compliance with
the new Mental Health Parity Act provisions, which generally go into
effect for plan years beginning on or after October 3, 2009.
The Mental
Health Parity and Addiction Equity Act of 2008 (the "Act")
was passed by Congress on October 3, 2008 as part of the Emergency
Economic Stabilization Act of 2008. It amends both the Mental
Health Parity Act of 1996 and the Public Health Service Act.
Under the Act, group health plans that provide mental health or
substance use disorder benefits must now provide coverage for those
benefits at levels equal to (or greater than) the plan's coverage for
medical and surgical benefits.
Generally, the
Act applies to all group health plans of employers with 50 or more
employees. Plan sponsors should review the new law with their
insurance carrier and/or administrator soon to ensure that any
necessary changes are made before the applicable deadline. In
addition, all employers should review existing communication
documents and practices to ensure that sufficient information is
being disclosed in compliance with the Act (e.g. "medical
necessity").
The following are some key provisions
of the Act:
� plans are not required to provide mental health or
substance use disorder benefits but if they do, such benefits should
be provided in parity with medical or surgical benefits;
� plans that do provide mental health or substance use
disorder benefits may still choose which conditions and treatments to
cover;
� plans that provide mental health and substance use
disorder benefits cannot have financial requirements or treatment
limitations that are more restrictive than those applied to medical
or surgical benefits;
� plans that provide medical and surgical benefits
offered by out-of-network providers must also provide mental health
and substance use disorder benefits offered by out-of-network
providers;
� plan administrators, upon request, must make the
established criteria for "medical necessity" determinations
and/or the reasons for payment denial with respect to mental health
or substance use disorder benefits available to plan participants and
contracting providers; and
� plans may qualify for a "cost exemption" if
the parity requirements raise actual total plan costs by more than
two percent in the first plan year, or more than one percent for any
plan year thereafter (this determination must be made by a licensed,
qualified actuary) if the group health plan satisfies certain
notification requirements.
Note that plan sponsors who fail to
meet these parity requirements could be subject to an excise tax.
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