• The MHPAEA requires a general equivalence in the way MH/SUD and medical/surgical benefits are treated with respect to annual and lifetime dollar limits, financial requirements, and treatment limitations, if such benefits are provided by large group health plans and health insurance issuers.
• The ACA built on MHPAEA and required coverage of MH/SUD services as one of its 10 EHB categories in non-grandfathered individual and small group plans.
• In 2015, the definition of small employer was amended in the ACA and the Public Health Service Act to mean an employer with 1-50 employees making equivalency rules for MH/SUD services applicable to even smaller group plans.

Legislative history

In 1996, the Mental Health Parity Act (MHPA) provided that large group health plans cannot impose annual or lifetime dollar limits on mental health (MH) benefits that are less favorable than any such limits imposed on medical/surgical benefits.

In 2008, the Paul Wellstone and Peter Domenici Mental Health Parity and Addiction Equity Act (MHPAEA) preserved the MHPA protections and added significant new protections, such as extending the parity requirements to substance use disorders (SUDs). Although MHPAEA requires a general equivalence in the way MH/SUD and medical/surgical benefits are treated with respect to annual and lifetime dollar limits, financial requirements and treatment limitations, MHPAEA did not require large group health plans or health insurance issuers to cover MH/SUD benefits. The law applies only to large group health plans and health insurance issuers that choose to include MH/SUD benefits in their benefit packages.

However, in 2010, the Affordable Care Act (ACA) built on MHPAEA and required coverage of MH/SUD services as one of its 10 essential health benefit (EHB) categories in non-grandfathered individual and small group plans.

In 2015, the Protecting Affordable Coverage for Employees Act amended the definition of small employer in the ACA and the federal Public Health Service Act to mean generally an employer with 1-50 employees, with the option for states to expand the definition of small employer to 1-100 employees.

State vs. Federal oversight

Employment-related group health plans may be either “insured” (i.e., purchasing insurance from an issuer in the group market) or “self-funded.” The insurance that is purchased, whether by an insured group health plan or in the individual market, is regulated by the State’s insurance department.

Group health plans that pay for coverage directly, without purchasing health insurance from an issuer, are called self-funded group health plans. Private employment-based group health plans are regulated by the U.S. Department of Labor. Non-federal governmental plans are regulated by the U.S. Department of Health and Human Services.

State parity requirements

Some states may have mental health parity requirements that are stricter than federal requirements. To view state specific information visit www.ncsl.org, search for “mental health parity” in the search box, and then select “State Laws Mandating or Regulating Mental Health Benefits.”