Summary of the Paul Wellstone And Pete Domenici Mental Health Parity And Addiction Equity Act

Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008
Rep. Patrick Kennedy and Rep. Jim Ramstad

Summary

This bill permanently reauthorizes and expands the Mental Health Parity Act of 1996 to provide for equity in the coverage of mental health and substance use disorders compared to medical and surgical disorders. The legislation ensures that group health plans do not charge higher co-payments, coinsurance, deductibles, and impose maximum out-of-pocket limits and lower day and visit limits on mental health and addiction care than for medical and surgical benefits. The Department of Health and Human Services, the Department of Labor, and the Internal Revenue Service may penalize health plans for discriminatory practices under the bill and individuals may bring a private right of action to receive covered benefits.

Parity Requirements

The bill does not mandate group health plans provide any mental health coverage. However, if a plan does offer mental health coverage, then:

• Equity in financial requirements. The plan or coverage must ensure that any financial requirements applied to mental health and substance use disorders are no more restrictive or costly than the financial requirements applied to the predominant requirement on comparable medical and surgical benefits that the plan covers. Financial requirements include deductibles, co-payments, coinsurance, and out-of-pocket expenses.

• Equity in treatment limits. The plan or coverage must also ensure that any treatment limitations applied to mental health and substance use disorders are no more restrictive than the treatment limitations applied to the predominant limitation on comparable medical and surgical benefits that the plan covers. Treatment limitations include caps on the frequency or number of visits, limits on days of coverage, or other similar limits on the scope and duration of treatment.  

• Equality in out-of-network coverage. If the plan or coverage offers out-of-network benefits for medical and surgical benefits under the plan, then it must also offer coverage for out-of-network benefits for mental health and substance use disorders on similar terms and conditions.

Scope of Coverage

• The mental health parity requirements apply to group health plans with 51 or more employees, but does not apply to health coverage in the individual insurance market.
  

Cost Exemption

• If the requirements in this bill result in increased actual total costs of coverage that exceed 2% during the first plan year or 1% in subsequent years, the plan may choose to be exempt from the equity requirements for the following plan year.  

Effect on State Mental Health Parity Laws

• The bill would establish a federal floor but permits states to go further to protect their citizens. This bill would not supersede any state law that provides consumer protections, benefits, rights, or remedies stronger than those in this bill. 

Transparency in Medical Management

• Plans will be required to make information about criteria used for medical necessity determinations and reasons for denials relating to mental health and addiction treatment available.

Enforcement

• The Internal Revenue Service may impose a tax of $100 per day per beneficiary on employers or insurers who do not comply with the equity requirements of this bill. The Department of Health and Human Services and Department of Labor can also enforce the provisions of this bill. Aggrieved individuals may bring a civil action to obtain covered benefits.

Notice and Assistance

• The Secretary of the Department of Labor, in coordination with Department of Health and Human Services and Department of Treasury shall provide information and assistance to participants, beneficiaries and others with regard to the requirements of the bill.

Government Accountability Office Reports

• The bill requires GAO to analyze and report on the specific rates, patterns, and trends in coverage and exclusion of specific mental health and substance use disorder diagnoses by health plans and health insurance.

Effective Date

• The bill is effective in the first health plan year that begins on or after January 1, 2009.

Regulations

• The bill requires regulations be promulgated not later than one year after the date of enactment with regard to the requirements of the bill