Mental Health Parity Act

1996 U. S. law

The Mental Health Parity Act (MHPA) is legislation signed into United States law on September 26, 1996 that requires annual or lifetime dollar limits on mental health benefits to be no lower than any such dollar limits for medical and surgical benefits offered by a group health plan or health insurance issuer offering coverage in connection with a group health plan. Prior to MHPA and similar legislation, insurers were not required to cover mental health care and so access to treatment was limited, underscoring the importance of the act. The MHPA was largely superseded by the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA), which the 110th United States Congress passed as rider legislation on the Troubled Asset Relief Program (TARP) in Public Law 110 343, signed into law by President George W. Bush in October 2008.

The MHPA applies to group health plans for plan years beginning on or after January 1, 1998. MHPA also did not provide benefits for substance abuse and dependency issues. and took effect on 1 January 2009. The main purpose of MHPAEA was to fill the loopholes left by the MHPA. The act requires health insurers as well as group health plans to guarantee that financial requirements on benefits, including co pays, deductibles, and out of pocket maximums, and limitations on treatment benefits such as caps on visits with a provider or days in a hospital visit, for mental health or substance use disorders are not more restrictive than the insurer's requirements and restrictions for medical and surgical benefits. MHPAEA only applies to insurance plans for public and private sector employers with over 50 employees and health insurance issuers who sell coverage to employers with more than 50 employees. The "carve out" vendor may be separate from any number of other vendors providing medical benefits. The law would require the "carve out" vendor to ensure parity with medical benefits provided by a separate vendor or vendors. In addition, the legislation itself did not create a mechanism to regularly monitor or evaluate the enforcement or implementation of the act. comparability analyses in writing and in operation to further validate that the plan is treating MH/SUD coverage requirements/payments in the same manner as medical/surgical care. Several tools exist that can help promote parity compliance including the U. S. DOL Self Compliance Tool, the CMS Parity Compliance Toolkit for Medicaid/CHIP, the Six Step Parity Compliance Guide, and ClearHealth Quality Institute’s Online Parity Tool.