Parity for Mental Health Benefits

Class Action case enforces Parity mandate - 2019

March 2019: Wit v. United Behavioral Health
The US District Court for the Northern District of California ruled that United violated the Parity provisions of ERISA.  United created guidelines which limited mental health benefits. For example, it allowed acute or crisis coverage, but denied maintenance coverage for mental health. Also, the guidelines deviated from the Illinois requirement 215 ILCS 5/370c, that only recognized Substance Abuse criteria be used instead of United's guidelines. The judge also noted evidence that United used the guidelines to reduce the expenses of impact of the Parity Act.  The next step in the lawsuit is to command the proper remedy of United's breaches of duty, such as payment of denied claims or an injunction prohibiting United to use its guidelines.  This case may also be cited in the future by other courts.  Of particular note,

185. One example that illustrates the heavy emphasis that UBH places on financial considerations when deciding whether Guidelines should be changed is UBH’s decision in late 2016 not to amend its Guidelines with respect to Applied Behavioral Analysis (“ABA”), a treatment for autism spectrum disorder. Although the Utilization Management Committee had approved a Guideline broadening coverage of that treatment, UBH’s CEO, Martha Temple, overruled the recommendation, cautioning UBH staff, “[w]e need to be more mindful of the business implications of guideline change recommendations.”

New: Illinois adopts Mental Health Parity in 2019

Section 370c.1 of the Illinois Insurance Code takes effect January 1, 2019. This new law requires all health insurance policies in Illinois to comply with the Mental Health Parity provisions of Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, which is described below in earlier posts.  While the Federal Act applies to employer plans, this new law will apply it to governmental and individual plans.

Parity applies to both quantitative limits and nonquantitative limits:
    "Treatment limitation" includes limits on benefits based on the frequency of treatment, number of visits, days of
coverage, days in a waiting period, or other similar limits on the scope or duration of treatment. "Treatment limitation"
includes both quantitative treatment limitations, which are expressed numerically (such as 50 outpatient visits per year), and nonquantitative treatment limitations, which otherwise limit the scope or duration of treatment. A permanent exclusion of all benefits for a particular condition or disorder shall not be considered a treatment limitation. "Nonquantitative treatment" means those limitations as described under federal regulations (26 CFR 54.9812-1). "Nonquantitative treatment limitations" include, but are not limited to, those limitations described under federal regulations 26 CFR 54.9812-1, 29 CFR 2590.712, and 45 CFR 146.136.  (Examples of "nonquanitiative": medical necessity determinations, prior authorization, step-therapy requirements, formularies.)

Definition: "Mental, emotional, nervous, or substance use disorder or condition" means a condition or disorder that involves a mental health condition or substance use disorder that falls under any of the diagnostic categories listed in the mental and behavioral disorders chapter of the current edition of the International Classification of Disease or that is listed in the most recent version of the Diagnostic and Statistical Manual of Mental Disorders.

Mandates: While there are many aspects of the law, some of the provisions are:
(6.5) An individual or group health benefit plan amended, delivered, issued, or renewed on or after the effective date of this amendatory Act of the 100th General Assembly:
        (A) shall not impose prior authorization  requirements, other than those established under the Treatment Criteria for Addictive, Substance-Related, and Co-Occurring Conditions established by the American Society of Addiction Medicine, on a prescription medication approved by the United States Food and Drug Administration that is prescribed or administered for the treatment of substance use disorders;
        (B) shall not impose any step therapy requirements, other than those established under the Treatment Criteria for Addictive, Substance-Related, and Co-Occurring Conditions established by the American Society of Addiction Medicine, before authorizing coverage for a prescription medication approved by the United States Food and Drug Administration that is prescribed or administered for the treatment of substance use disorders;
        (C) shall place all prescription medications approved by the United States Food and Drug Administration prescribed or administered for the treatment of substance use disorders on, for brand medications, the lowest tier of the drug formulary developed and maintained by the individual or group health benefit plan that covers brand medications and, for generic medications, the lowest tier of the drug formulary developed and maintained by the individual or group health benefit plan that covers generic medications; and
        (D) shall not exclude coverage for a prescription medication approved by the United States Food and Drug Administration for the treatment of substance use disorders and any associated counseling or wraparound services on the grounds that such medications and services were court ordered.

New: January 16, 2013. Parity regulations to be accelerated

For four years, the Federal administration failed to implement regulations to make the Parity Acts effective.  Today, because of the unspeakable tragedies of gun violence, the administration is finally working to make the rules final.  Because the rules can help those people with mental illnesses get the mental health treatment necessary, the rules might prevent gun violence in the future.  It is a terrible comment, though, that it took a tragedy to force the administration to enact rules for a 2008 law.

The law was codified as 29 USC 1185, and the rules were proposed in 2010, in 75 FR 5410.
The link to the temporary regulations is:

October 2008: New Mental Health Parity Law is enacted

To see the text of the new bill, see the information below.
To see the text of the current law, see the information below.

Important points

New Mental Parity Law in 2008 - Autism not included?

September 25, 2008

Congress is on the verge of clearing legislation to require most employers and health insurers to put mental-health on par with physical illnesses.

That includes coverage for hospital stays and doctor visits, as well as co-payments and deductibles. Plans that offer out-of-network coverage for physical problems will have to add equivalent mental coverage.

But the legislation doesn't specify what disorders must be covered. Kathleen Mahieu, who heads behavioral health consulting at benefit-consulting firm Hewitt Associates LLC, said there is consensus that major problems such as serious depression, schizophrenia and substance abuse should be covered, but employers differ whether to cover autism, attention deficit disorder and some others. If coverage is rejected, the legislation requires the health plan to explain why.

Still, patient advocates welcomed the changes. "This is the biggest step we've ever taken in terms of integration of mental illness into the larger health care system," said Andrew Sperling, director of federal legislative advocacy for the National Alliance on Mental Illness.

Over the last 15 years, both the House and Senate had passed different versions of the bill, only to see them founder. This time, the bill has support of business and insurance groups. On Tuesday, the House passed a standalone bill and the Senate attached the same language to a tax measure. Now, the two chambers must reach agreement on how to pay the $3.4 billion cost over 10 years before lawmakers leave town.

The legislation doesn't require insurance plans sold to individuals, employers with fewer than 50 workers, or those that don't provide any health coverage, to offer mental health coverage.

It applies to about 150 million people: 82 million in federally regulated plans funded by employers, 31 million in state-regulated plans and 36 million children and adults covered by managed-care Medicaid programs, the federal-state health insurance for the poor, a Senate aide said.

The legislation ends such common restrictions as 30-day hospital stays or 30 visits to a mental health professional if the plan doesn't similarly curb treatment for physical problems, Ms. Mahieu said. Reimbursement rates for doctor visits or hospital stays must equal the percentage paid for physical illnesses.

About one in four employers told a Hewitt survey they already offer mental health parity, but it's unclear whether their plans would meet the bill's requirements. President Bush has signaled support; the legislation would be put into practice nationwide by January 2010 if it becomes law.

That will make a big difference for people like Loretta Geyer, a 51-year-old social worker in Euclid, Ohio. She said she spent $4,619 out-of-pocket on medical care last year, mostly to treat her bipolar disorder. To save money, she said she often waits to get treatment until her condition worsens.

Her therapist doesn't accept insurance coverage, and Ms. Geyer, who sees her often once a week, pays out-of-pocket and then seeks reimbursement from her insurer, which pays her for 40% of the first 10 visits a year after a $300 deductible.

Employees might find an increase in premiums or deductibles because of the legislation. A survey by the American Benefits Council, an industry group, found 39% of large employers said they will charge employees higher premiums, while one in four also said they would change benefits or adjust total compensation, including slowing down wage increases. One in 10 said they will do both.


Write to Jane Zhang at Jane.Zhang@wsj.com

: since most plans exclude habilitative treatment, and whether to cover autism is up to the plan, most plans will not cover autism even with this new Act of 2008.  This effect demonstrates that the community must insist, as explained on the previous page, that Autism is not a mental illness, and claims must be paid under the general health coverage. Also, we must work to stop the habilitative-rehabilitiave distinction.

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October 5, 2008

The bill has been enacted into law.

The amendments include the following definition:
"(4) MENTAL HEALTH BENEFITS- The term `mental health benefits' means benefits with respect to services for mental health conditions, as defined under the terms of the plan and in accordance with applicable Federal and State law."
Thus, the Act does not define Mental Health, nor Mental Illness.  The employer's Plan does, although in accordance with Federal and State Law.  As stated in the previous comment, the law in this Circuit is that Autism is not a mental illness, and thus the mental illness restrictions should not apply.  The law still allows ERISA plans to  exclude some mental illnesses depending on how the plan defines mental illness.

Go to this page for the text of
Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008
Since this Act amends the 1996 act, it is difficult to read since it changes text not appearing in the new Act.

The operative language is as follows:
(A) IN GENERAL- In the case of a group health plan (or health insurance coverage offered in connection with such a plan) that provides both medical and surgical benefits and mental health or substance use disorder benefits, such plan or coverage shall ensure that--
Perhaps the Department of Labor will issue regulations to restrict Plans' abilities to unduly restrict the definition of mental health coverage.

In addition, the antidiscrimination regulation may apply.  This regulation prohibits employer-based plans from discriminating on the basis of health factors.

The existing Mental Health Parity Act, 1996-2008:

The U.S Department of Health and Human Services describes the parity law: http://www.cms.hhs.gov/HealthInsReformforConsume/04_TheMentalHealthParityAct.asp

Summary of 1996 Act :  group health plans may impose some restrictions on mental health benefits

Under current law, large group health plans may impose some restrictions on mental health benefits and still comply with the law. 
MHPA does not prohibit large group health plans from:

•  Covering mental health services within network only, even though the plan will pay for out of network services for medical/surgical benefits (although with higher out-of-pocket cost to the subscriber);      

•  Increasing co-payments or limiting the number of visits for mental health benefits;

•  Imposing limits on the number of covered visits, even if the plan does not impose similar visit limits for medical and surgical benefits; and

•  Having different cost-sharing arrangements, such as higher coinsurance payments for mental health benefits, as compared to medical and surgical benefits.

•  Although the law requires "parity," or equivalence, with regard to dollar limits, MHPA does NOT require large group health plans and their health insurance issuers to include mental health coverage in their benefits package.  The law's requirements apply only to large group health plans and their health insurance issuers that include mental health benefits in their benefits packages.

Some additional information:

•  A visit limit coupled with a usual, customary, and reasonable (UCR) charge is not the equivalent of an annual or lifetime dollar limit.  As a result, it is not a violation of the MHPA requirements.  Payments made by the plan on the basis of UCR charges will vary from one case to the next. What is not permitted is a limit on the number of visits, together with a fixed dollar limit per visit, for example, 60 visits annually at $50 per visit (totaling $3,000), unless the medical-surgical coverage is the same.

•  You may be in a network plan that has an annual limit for mental health benefits received out-of-network, with no limits for out-of-network medical and surgical benefits.  MHPA allows this as long as there is parity between medical and surgical benefits and mental health benefits received in the network.

•  A large group health plan (or health insurance coverage     offered in connection with a group health plan) is not subject to MHPA if the application of its provisions to the plan raise costs by at least 1%.

If your large group health plan has separate dollar limits for mental health benefits, the dollar amounts that your plan has for treatment of substance abuse or chemical dependency are NOT counted when adding up the limits for mental health benefits and medical and surgical benefits to determine if there is parity.

An example of a coverage provision that violates MHPA is as follows: Your plan has a limit of 60 visits per year for mental health benefits, along with a fixed dollar limit of $50 per visit - a total annual dollar limit of $3,000. It places no similar limits on medical and surgical benefits. MHPA does NOT allow this inequality to exist for large group health plans covered by the law

Note:  There are three exceptions to the MHPA requirements:

• MHPA requirements do not apply to small employers who have between 2 and 50 employees;

• Large group health plans that can demonstrate that compliance with MHPA increases their cost by at least one percent can notify their beneficiaries that MHPA does not apply to their coverage; and

• A non federal government employer that provides self-funded group health plan coverage to its employees (coverage that is not provided through an insurer) may elect to exempt its plan (opt-out) from most requirements of Title XXVII of the Public Health Service (PHS) Act, with the exception of requirements pertaining to the certification and disclosure of an individual's creditable coverage under the plan.

Source: US Dept Health and Human Services

Full Text of ERISA Mental Health Parity Regulations under the 1996 Act

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