Overview: Group health plans that provide mental health benefits are required to comply with the Mental Health Parity Act (MHPA). The MHPA requires that annual and lifetime dollar limits on mental health benefits be equal to the annual and lifetime dollar limits on medical and health benefits. The MHPA does not require group health plans to provide mental health benefits.
The Mental Health Parity and Addiction Equity Act (MHPAEA) expanded these rights and requires group health plans to ensure that the financial requirements (such as deductibles and out-of-pocket costs) and treatment limitations (such as number of visits or maximum days of coverage) for mental health and substance abuse disorders are no more restrictive than the requirements and limitations applied to medical and/or surgical benefits. The expansion also provides that the parity requirements of the MHPA be continued and extended to substance use disorders.
The mental health parity requirements apply to group health plans (both self-funded and fully insured) with more than 50 employees that provide mental health or substance use benefits. Small employers (those with 50 or fewer employees) may be subject to mental health parity requirements at the state level.
Author: Tracy Morley, SPHR, Legal Editor
Updated to reflect IRS guidance issued on the expanded determination letter program.
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Employment glossary definition of MHPA (Mental Health Parity Act).
Employment glossary definition of MHPAEA (Mental Health Parity and Addiction Equity Act).
HR guidance on understanding mental health parity requirements.