Mental Health Parity and Addition Equity Act of 2008

The Emergency Economic Stabilization Act of 2008 also contains the Paul Wellstone and Pete Domenici Mental Health Parity and Addition Equity Act of 2008 (the “Act”).  This Act builds on the current 1996 parity law, which already requires parity coverage for annual and lifetime limits and amends the Employee Retirement Income Security Act, the Public Health Service Act and the Internal Revenue Code by providing equal coverage of mental and physical illness in an employer’s group health plan.  The Act does not mandate mental health or substance use benefits.  The Act only applies to those employers with more than 50 employees. For most plans, the Act becomes effective for plan years beginning after October 3, 2009.  For group health plans subject to collective bargaining, they may be required to comply with an earlier effective date, as the Act becomes effective as of the later of (a) the termination of the last collective bargaining agreement (without regard to any extension) agreed to after October 3, 2008, or (b) January 1, 2009.

The key provisions of the Act include:

• The applicable “financial requirements” (such as deductibles, co-payments, and co-insurance and out-of-pocket expense limitations) imposed on mental health and substance use disorder benefits must not be more restrictive than the requirements on medical or surgical benefits.
• Separate cost sharing requirements and/or treatment limitations imposed on mental health or substance use disorder benefits must not be more restrictive than the requirements or limitations established for medical or surgical benefits.
• For a group health plan that provides both medical and surgical benefit and mental health or substance use disorder benefit, if the plan provides coverage for medical or surgical benefits provided by out-of-network providers, the plan must also provide coverage for mental health or substance disorder benefits provided by out-of-network providers.
• If a group health plan offers two or more benefit packages to participants, the requirements of the Act apply separately to each package.
• New parity rules apply to both inpatient and outpatient services (whether in-network or out-of-network), as well as emergency care services.
• Any state laws that provide greater consumer protections, benefits, rights or remedies than those provided under the Act would not be preempted.
• A group health plan is exempted from complying with the act if it experiences an increase in actual costs with respect to medical/surgical and mental health/substance use benefits of 1% (2% in the first year that the Act is applicable).