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FAQs for Employees about the

Mental Health Parity and

Addiction Equity Act

U.S. Department of Labor

Employee Benefits Security Administration

May 18, 2012

The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) was signed into law on October 3,

2008 and became effective for plan years beginning on or after October 3, 2009. MHPAEA greatly expands

on an earlier law, the Mental Health Parity Act of 1996 (MHPA ‘96). On February 2, 2010 the

Departments of Health and Human Services, Labor and the Treasury jointly issued interim final regulations

implementing MHPAEA, which became applicable for plan years beginning on or after July 1, 2010.

MHPAEA generally applies to group health plans and health insurance issuers that provide coverage for

either mental health or substance use disorder benefits and medical/surgical benefits. These FAQs provide

basic information about the important protections MHPAEA provides with respect to parity in coverage of

mental health and substance use disorder benefits and medical/surgical benefits provided by employment-

based group health plans.

Q1: What new protections does MHPAEA provide for participants and

beneficiaries?

A1: MHPA ‘96 required parity with respect to aggregate lifetime and annual dollar limits for

mental health benefits. MHPAEA expands those provisions to include substance use

disorder benefits. Thus, under MHPAEA group health plans and issuers may not impose a

lifetime or annual dollar limit on mental health or substance use disorder benefits that is

lower than the lifetime or annual dollar limit imposed on medical/surgical benefits.

MHPAEA also requires group health plans and health insurance issuers to ensure that

financial requirements (such as copays and deductibles), and quantitative treatment

limitations (such as visit limits), applicable to mental health or substance use disorder

benefits are generally no more restrictive than the requirements or limitations applied to

medical/surgical benefits. The MHPAEA regulations also require plans and issuers to

ensure parity with respect to nonquantitative treatment limitations (such as medical

management standards).

Q2: Can group health plans still apply financial requirements and treatment

limitations, such as copays or visit limits on mental health and substance use

disorder benefits?

A2: Generally, yes. Group health plans and issuers may still apply financial requirements and

treatment limitations with respect to mental health and substance use disorder benefits;

however, they must do so in accordance with the requirements under MHPAEA.

There is a test for determining whether a financial requirement or treatment limitation for

mental health or substance use disorder benefits is permissible. The general rule is that a

plan may not impose a financial requirement or quantitative treatment limitation

applicable to mental health or substance use disorder benefits in any classification that is

more restrictive than the predominant financial requirement or quantitative limitation of

that type applied to substantially all medical/surgical benefits in the same classification.

How to apply this test is discussed in more detail in the following FAQs. You can always

contact the Department of Labor at www.askebsa.dol.gov or 1-866-444-3272 if you have

questions about your mental health or substance use disorder benefits under your

employment-based group health plan.

Q3: What is a financial requirement or quantitative treatment limitation?

A3: The most common types of financial requirements include deductibles, copays,

coinsurance, and out-of-pocket maximums. Types of quantitative treatment limitations

include annual, episode, and lifetime day and visit limits, for example, number of

treatments, visits, or days of coverage. These are just examples, therefore, you could find

a type of financial requirement and quantitative treatment limitations that is not

specifically listed here.

Q4: The test for determining parity refers to levels of types of financial

requirements or treatment limitations. What is a level of a type of financial

requirement or treatment limitation?

A4: The level of a type of financial requirement or treatment limitation refers to the magnitude

of the type of financial requirement or treatment limitation. For example, different levels

of coinsurance include 20% and 30%, different levels of copays include $15 and $20, or

different levels of an episode limit include 21 inpatient days per episode and 30 inpatient

days per episode.

Q5: How can I determine if a financial requirement or quantitative treatment

limitation applicable to mental health and substance use disorder benefits is

permissible?

A5: To determine if a quantitative financial requirement (such as a copay) or quantitative

treatment limitation (such as a visit limit) is permissible, the parity analysis must be

applied for that type of financial requirement or treatment limitation within a coverage

unit for each of the six classifications of benefits separately. A coverage unit refers to the

way in which a plan groups individuals for purposes of determining benefits, or premiums

or contributions (for example, self-only, family, employee plus spouse). Under MHPAEA,

the six classifications of benefits

are:

1) Inpatient in-network;

2) Inpatient out-of-network;

3) Outpatient in-network;

4) Outpatient out-of-network;

5) Emergency care;

6) Prescription drugs.

For more information regarding the outpatient in-network and outpatient out-of-network classifications, see the

FAQ at: http://www.dol.gov/ebsa/faqs/faq-mhpaea.html.

If a type of financial requirement or quantitative treatment limitation applies to

substantially all medical/surgical benefits in a classification (for example, if a copay applies

to substantially all medical/surgical benefits), then it may be permissible for that

requirement or limitation (the copay) to apply to mental health or substance use disorder

benefits. Generally, a financial requirement or treatment limitation is considered to apply

to substantially all medical/surgical benefits if it applies to two-thirds or more of the

medical/surgical benefits for the same classification and coverage unit. This two-thirds

calculation is based on the dollar amount of all plan payments for medical/surgical benefits

expected to be paid for the year (or portion of the plan year after a change in plan benefits

that affects the applicability of the financial requirement or quantitative treatment

limitation).

The predominant level of a type of requirement or limitation applicable to medical/surgical

benefits within a classification is the most restrictive level of the requirement or limitation

that can be imposed on mental health or substance use disorder benefits within that

classification. There is a detailed test for determining the predominant level which is

discussed in the next FAQ. If, for example, for self-only coverage a $10 copay is the

predominant level of copay that applies to substantially all inpatient in-network

medical/surgical benefits, that is the most restrictive copay that can apply to inpatient in-

network mental health or substance use disorder benefits. With respect to the

prescription drug classification, there is a special rule for multi-tiered prescription drug

benefits.

The analysis may be complicated depending on your plan’s design. If you are not sure if

the requirements or limitations that apply to your mental health or substance use disorder

benefits are permissible, contact the Department of Labor at www.askebsa.dol.gov or 1-

866-444-3272.

Q6: If as determined under MHPAEA, it is permissible for my plan to impose a

copay on my inpatient, in-network mental health or substance use disorder

benefits, is there any restriction on the amount of copay that can apply?

A6: Yes. The predominant level of a type of requirement or limitation applicable to

medical/surgical benefits within a classification is the most restrictive level of the

requirement or limitation that can be imposed on mental health or substance use disorder

benefits within that classification.

Generally, the predominant level will apply to more than one-half of the medical/surgical

benefits in that classification subject to the requirement or limitation. If there is no single

level that applies to more than one-half of medical/surgical benefits in the classification,

the plan can combine levels until the combination of levels applies to more than one-half

of medical/surgical benefits subject to the requirement or limitation in the classification.

The least restrictive level within the combination is considered the predominant level. The

determination of the portion of medical/surgical benefits in a classification subject to a

financial requirement or treatment limitation is based on the dollar amount of all plan

See 29 CFR 2590.712(c)(3)(iii).

For this purpose the plan may combine the most restrictive levels first, with each less restrictive level added to the

combination until the combination applies to more than one-half of the benefits subject to the financial requirement

or treatment limitation.

payments for medical/surgical benefits in the classification expected to be paid under the

plan for the plan year.

The analysis may be complicated depending on your plan’s design. If you are not sure if

the requirements or limitations that apply to your mental health or substance use disorder

benefits are permissible, contact the Department of Labor at www.askebsa.dol.gov or 1-

866-444-3272.

Q7: Can my plan impose a higher “specialist” financial requirement with respect to

mental health and substance use disorder benefits?

A7: A plan may not create sub-classifications for generalists and specialists to determine

separate predominant financial requirements and treatment limitations that apply to

substantially all medical/surgical benefits. However, if the predominant level of a type of

financial requirement that applies to substantially all medical/surgical benefits in a

classification is the one charged for a medical/surgical specialist, then that “specialist”

financial requirement can be applied for all mental health or substance use disorder

benefits within that classification. On the other hand, if the predominant level of a type of

financial requirement that applies to substantially all medical/surgical benefits in a

classification is the one charged for a medical/surgical generalist, then the financial

requirement charged for all mental health or substance use disorder benefits within that

classification cannot be higher than the “generalist” financial requirement for

medical/surgical benefits.

Q8: If a plan previously had separate deductibles for medical/surgical benefits and

mental health or substance use disorder benefits, how should those

deductibles be combined now?

A8: While plans can no longer have separate deductibles, they do have flexibility in how they

choose to combine these deductibles. For example, if a plan previously had a $500

deductible on medical/surgical benefits, and a $500 deductible on mental health or

substance use disorder benefits, the plan could now choose to have a combined $750

deductible for all benefits. As long as there is no separate deductible that applies only to

mental health or substance use disorder benefits, the plan can set the combined

deductible at whatever amount it chooses.

Q9: What are nonquantitative treatment limitations?

A9: Nonquantitative treatment limitations include: medical management standards limiting or

excluding benefits based on medical necessity or medical appropriateness, or based on

whether the treatment is experimental or investigative; formulary design for prescription

drugs; standards for provider admission to participate in a network, including

reimbursement rates; plan methods for determining usual, customary, and reasonable

charges; refusal to pay for higher-cost therapies until it can be shown that a lower-cost

therapy is not effective (also known as fail-first policies or step therapy protocols); and

exclusions based on failure to complete a course of treatment. This is an illustrative, non-

exhaustive list.

Q10: How does MHPAEA provide for parity with respect to nonquantitative

treatment limitations?

A10: Under MHPAEA, a plan may not impose a nonquantitative treatment limitation with

respect to mental health or substance use disorder benefits in any classification (such as

inpatient, out-of-network) unless under the terms of the plan as written and in operation,

any processes, strategies, evidentiary standards, or other factors used in applying the

limitation to mental health or substance use disorder benefits in the classification are

comparable to and applied no more stringently than the processes, strategies, evidentiary

standards or other factors used in applying the limitation with respect to medical/surgical

benefits in the classification, except to the extent that recognized clinically appropriate

standards of care may permit a difference.

Q11: My mental health benefits were denied. What information am I entitled to

receive from my plan under MHPAEA?

A11: Under MHPAEA, the criteria for medical necessity determinations made under a group

health plan (or health insurance coverage offered in connection with the plan) with respect

to mental health or substance use disorder benefits must be made available by the plan

administrator or the health insurance issuer to any current or potential participant,

beneficiary, or contracting provider upon request. In addition, under the Employee

Retirement Income Security Act (ERISA), documents with information on the medical

necessity criteria for both medical/surgical benefits and mental health or substance use

disorder benefits are plan documents, and copies must be furnished within 30 days of your

request.

Additionally, the individual (or a provider or other individual acting as a patient’s

authorized representative) may request these documents consistent with the Department

of Labor claims procedure regulation (and, if the plan is a non-grandfathered health plan,

the external review requirements added by the Patient Protection and Affordable Care Act

would apply).

Q12: Are there plans that are exempt from MHPAEA?

A12: Yes. While MHPAEA applies to most employment-based group health coverage, there are a

few important exceptions. Specifically, MHPAEA does not apply to small employers who

have fewer than 51 employees.

There is also an increased cost exception available to

plans that follow guidance issued by the Departments.

Additionally, plans for State and

local government employees that are self-insured may opt-out of MHPAEA’s requirements

if certain administrative steps are taken (such as sending notice to enrollees).

Finally,

MHPAEA does not apply to retiree-only plans.

See 29 U.S.C.1024(b)(4), 1132(c)(1).

See 29 CFR 2560.503-1 and 2590.715-2719. See also www.dol.gov/ebsa/healthreform for consumer information on

internal claims and appeals, external review of health plan decisions, and grandfathered health plans under the

Patient Protection and Affordable Care Act.

For more information on the small employer exception, see Q8 of the FAQs available at

http://www.dol.gov/ebsa/faqs/faq-aca5.html.

For more information on MHPAEA’s increased cost exemption, see Q11 of the FAQs available at

http://www.dol.gov/ebsa/faqs/faq-aca5.html.

If you are an employee of a State or local government and would like to know if your employment-based plan has

opted out, contact HHS at 877-267-2323, ext. 61565 or at [email protected].

See 75 FR 34538 at 34539 (June 17, 2010) for more information on special rules for retiree-only plans.

Q13: Who enforces MHPAEA?

A13: The Departments of Labor, the Treasury, and Health and Human Services, as well as the

States, all have important roles with respect to MHPAEA implementation. The

Departments are working with plans, issuers, and their service providers to help them

understand and come into compliance with MHPAEA and to ensure participants and

beneficiaries receive the benefits they are entitled to under the law.

Employees with questions about MHPAEA, including complaints about compliance by their

employment-based group health plans, can contact the Department of Labor at

www.askebsa.dol.gov or 1-866-444-3272. The Department of Labor will work with the

other Federal Departments and the States, as appropriate, to ensure MHPAEA violations

are corrected.

Q14: Where can I find more information about the protections available under

MHPAEA?

A14: Additional information and FAQs regarding MHPAEA are available on the Department of

Labor’s MHPAEA webpage at www.dol.gov/ebsa/mentalhealthparity. You may also contact

a benefit advisor in one of our regional offices at www.askebsa.dol.gov or by calling toll

free 1-866-444-3272.