The current mental health parity law, which expands benefits for individuals with mental, behavioral or addiction conditions, was more than a decade in the making when it was enacted in 2008. Its passage was considered a success for congressional bipartisanship.
But the legislative process was just one leg of the journey. The regulatory phase, touched off by the recent issuance of interim final rules, presents its own set of challenges - and may be instructive of future implementation challenges.
The original mental health parity law was enacted in 1996 but expired in 2001, and was subsequently renewed by lawmakers, year after year, as a contentious debate about more sweeping changes to the law ensued. In 2007, legislators approached the issue anew. In the Senate, the bipartisan leaders of the Committee on Health, Education, Labor and Pensions engaged representatives from the employer, insurer and mental health advocacy communities to hammer out a compromise measure.
Ultimately, this bill was melded with a more contentious House of Representatives version to form the Mental Health Parity and Addiction Equity Act, which passed in the fall of 2008. During the buildup to the final legislation, all of the stakeholders made concessions to be able to support a final compromise.
Fast-forward to Feb. 2 - months after the statutory effective date and the date by when federal agencies were directed by law to issue regulatory guidance. The Internal Revenue Service, the Centers for Medicaid and Medicare Services at the U.S. Department of Health and Human Services, and the Employee Benefit Security Administration jointly issued interim final rules implementing the new law. These regulations were made applicable to plan years beginning on or after July 1, 2010 (with a special effective date for collectively bargained plans). Plans were required to comply with the law for plan years beginning after Dec. 31, 2009.
Employers have had to use their best judgment to comply for plan year 2010 in the absence of guidance. The new regulations have raised significant concerns for employers, given their breadth and complexity. In many areas, they appear to go well beyond the parameters of the law, imposing significant restrictions on how a plan may define its benefits, compare benefits for purposes of applying parity and use medical management practices.
Notably, while the preamble states that the agencies will take into account good-faith efforts to comply with a reasonable interpretation of the statutory requirements, for violations occurring before the regulations' applicability date, this does not prevent plan participants or beneficiaries from bringing a private action.
Also disturbing is the format of the regulations. An "interim final rule" - as opposed to a "proposed rule" - restricts the ability of stakeholders, like employers, to weigh in on interpretation of the law and suggest modifications that might be necessary to ease implementation, before the rules become effective. While the agencies are accepting comments on the interim final rules through May 3, the rules are currently effective and plans have already had to move forward with compliance. Unfortunately, this slow-but-rigid regulatory process has become more common with regard to employee benefits issues.
Implementation of the Mental Health Parity and Addiction Equity Act has not been carried out in the same collaborative and constructive fashion as the bipartisan legislation itself. But looking to the future, this experience raises serious concerns in the regulatory phase that has begun for the Patient Protection and Affordable Care Act of 2010. The new law makes unprecedented changes to employer-sponsored health plans and includes a very aggressive effective-date regime.
Implementing the new law will require substantial and swift action by employers and health plans, potentially disrupting coverage for millions of plan participants. The regulatory responsibility is enormous for both the federal agencies writing the rules and those charged with complying. An open regulatory process that allows for timely input will be essential.
