Mental health parity


The Final Rules (the Rules) implementing the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) began to apply on the first day of the plan year that started on or after July 1, 2014.

Individual and group health plans that provide both medical/surgical benefits and mental health/substance use disorder (MH/SUD) benefits may not apply financial requirements (deductibles, coinsurance, copays, out-of-pocket maximums, etc.) or treatment limits (day or visit limits, etc.) to mental health/substance use disorder that are more restrictive than the financial requirements or treatment limits that apply to medical/surgical benefits.

Financial parity testing is performed on the medical plan classification (or permissible sub-classes) to determine the cost share type and maximum level of cost share that would be at parity with behavioral health benefits of a similar classification. Final Rules require the testing to be done for each type of financial requirement (quantitative treatment limitations) separately for each classification of benefits.

The interim final rules set forth the following six classifications (and no others) to be used for mental health parity testing purposes:

  • Inpatient/in-network
  • Inpatient/out-of-network
  • Outpatient/in-network
  • Outpatient/out-of-network
  • Pharmacy
  • Emergency services

The Final Rules maintained this classification scheme as well as formalizing a previously approved safe harbor which allows plans to further split the outpatient classification categories into two sub-categories: (a) office visits, and (b) all other outpatient items and services ("all other").

The Final Rules provide that a plan or issuer is not required to conduct a parity analysis each year unless there is a change in the plan's benefit design, cost sharing structure or utilization that would affect a financial requirement or treatment limitation within a classification or sub-classification.

In addition, plans are allowed, but not required, to test based on network tiers.

  • The Final Rules permit benefit sub-classification to reflect network tiers (in-network preferred providers/non-preferred) as long as tiers are reasonable, without specific regard to whether a provider is a MH/SUD provider or a medical/surgical provider.
  • Uneven tiers may exist between medical/surgical providers and MH/SUD providers (i.e. three for medical/surgical and two for MH/SUD).
  • Plans must apply the least restrictive level of the financial requirement or quantitative treatment limitation that applies to at least two-thirds of medical/surgical across all provider tiers in a classification.

Non-quantitative treatment limits on benefits include: medical necessity/prior authorization requirements, experimental and/or investigational exclusions, formulary design, standards for provider network participation and reimbursement rates, provisions for determining reasonable and customary charges, and step therapy requirements. The Final Rules provide the following additional non-quantitative treatment limitations:

Network tier design and restrictions based on:

  • Geographic location
  • Facility type
  • Provider specialty
  • Other criteria that limit the scope or duration of services

There is no mathematical test for non-quantitative limitations so for each classification of benefits, the application/operation of these limits to a plan's MH/SUD benefits must "manually" be compared to such limits applying to medical/surgical benefits under the plan. A non-quantitative treatment limitations worksheet will be available to review these benefits if the plan contains more stringent requirements on any of the above classifications.

For more information


UnitedHealthcare and OptumInsight are offering an optional, fee-based service to complete mental health parity quantitative testing including the "Substantially All" and "Predominant" tests.