Group health plans not ready for July 1 mental health parity rules

On July 1, the Mental Health Parity and Addiction Equity Act (MHPAEA) goes into effect, but actuarial tests show that most employer-sponsored health plans will not be able to meet its parity requirements, Sara Teppema, staff fellow for the Schaumburg, Ill.-based Society of Actuaries (SOA), told National Underwriter Life and Health. MHPAEA mandates that group health plans with 50-plus employees provide coverage for mental health and substance abuse treatment the same way they do for other medical illnesses.

"The idea is that mental health benefits need to be as good as or better than medical benefits," said Teppema. "A lot of employers think that they meet parity, but a vast majority of employer plans are not passing the test." The parity requirements focus on six benefit classifications: inpatient in-network, inpatient out-of-network, outpatient in-network, outpatient out-of-network, emergency care and prescription drugs. Plans that pass the test tend to be either high-deductible medical plans or HMOs that have low coinsurance for both mental and medical expenses, she said.

To meet the requirements, employers could increase their mental health benefits, but that could create premium increases across the board. Another option would be to deep-six copayments for all medical services, Teppema pointed out.

UnitedHealth Group in Minnetonka, Minn., and other insurers have requested multiple changes to the interim final rules that the federal government issued this spring to implement the MHPAEA, including postponing implementation from July 1, 2010, to July 1, 2011. However, the Washington, D.C.-based National Council for Community Behavioral Healthcare and other consumer groups are against postponement. The National Council recently commended Rep. Paul Tonko (D-N.Y.) for sending a letter to the Departments of Health and Human Services, Labor, and Treasury "urging them to resist insurance industry efforts to create new loopholes in the law." Rep. Tonko's letter accuses insurers of practicing "discriminatory and outdated thinking."

To learn more:
- read this National Underwriter Life and Health article
- read this SOA press release
- read the National Council press release

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