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MENTAL HEALTH
PARITY AND ADDICTION EQUITY ACT OF 2008
In conjunction with the Emergency
Economic Stabilization Act of 2008 signed into law on October 3,
2008, Congress passed the Mental Health Parity and Addiction Equity
Act of 2008 (the "Act") which amends the Mental Health
Parity Act of 1996 and the Public Health Service Act.
Generally effective for plan years beginning on or after October 3,
2009, employers with 51 or more employees that sponsor a group health
plan providing mental health or substance use disorder benefits must
provide coverage for those benefits at levels equal to (or greater
than) the plan's coverage for medical and surgical benefits.
Some key
provisions of the Act:
· require coverage of both "mental
health benefits" and "substance use disorder benefits"
but do not mandate coverage of any specific condition;
· prohibit cost-sharing (e.g. co-pays,
co-insurance and out-of-pocket expense limitations) and treatment
limitations imposed on a plan's mental health and substance use
disorder benefits from being more restrictive than the cost-sharing
and treatment limitation requirements imposed on medical and surgical
benefits;
· prohibit establishment of separate
treatment limitations solely for mental health or substance use
disorder benefits;
· apply to both inpatient and outpatient
services (whether in-network or out-of-network) as well as emergency
care services;
· require that plan administrators, upon
request, 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
· include a "cost exemption"
for a group health plan that has implemented the new parity
requirements for at least six months and can prove that the parity
requirements are responsible for raising actual total plan costs by
more than two percent in the first plan year, or more than one
percent for any plan year thereafter (proof must be provided and
certified by a licensed, qualified actuary) if the group health plan
satisfies certain notification requirements.
Plan sponsors who fail to meet these
parity requirements will be subject to an excise tax.
Therefore, plan sponsors of group health plans should review the new
law with their insurance carrier and/or administrator, and where
necessary, amend plans to implement the new requirements under the
Act. In addition, all employers should review existing
communication documents and practices to ensure that sufficient
information disclosures are being made in compliance with the Act
(e.g. "medical necessity").
If you have any questions please contact: Edward C. Hammond at
(248) 988-1821 - ehammond@clarkhill.com or Kristi R.
Gauthier at (248) 988-5854 - kgauthier@clarkhill.com.
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