The law applies to most employers with more than 50 employees. It requires covered employers that offer a health insurance plan with mental health coverage to provide the mental health benefits at the same level as medical and surgical benefits, including deductibles, copayments, out-of-pocket expenses, inpatient stays, and outpatient visits. The law ends limits on mental health coverage, such as 30-day hospital stays and 35 visits a year to a mental health professional, if a company’s plan doesn’t have similar limits for physical ailments. Also, if a plan offers out-of-network coverage for physical illnesses, beginning January 1, 2010 it will have to offer similar out-of-network coverage for mental health care.
The new parity requirements mean employers must quickly look at their benefits plans and make decisions that will ensure compliance. The Mental Health Parity and Addiction Act leaves many decisions up to employers, including which mental disorders to cover and which ones not to cover after January 1, 2010. For example, an employer may be allowed to cover substance-abuse treatment but not attention-deficit disorder.
The law’s regulations have yet to take shape, and interest groups have until October 3 to submit comments. With open enrollment season typically beginning in October or November, many employers will need to make decisions quickly before regulations are finalized.
Keep up with the latest legal changes affecting employer benefits and trends in employee benefits with the Benefits and Compensation Law Alert and Benefits and Compensation Law for Nonprofits and with changes in federal employment laws in the Federal Employment Law Insider.