1310 G Street, N.W. 

Washington, D.C. 20005 

202.626.4780 

Fax 202.626.4833 

May 28, 2009 

The Honorable Timothy Geithner 

Secretary, U.S. Department of the Treasury 

The Honorable Kathleen Sebelius 

Secretary, U.S. Department of Health and Human Services 

The Honorable Hilda Solis 

Secretary, U.S. Department of Labor 

By Electronic Mail 

Re: Issues under the Paul Wellstone and Pete Domenici Mental Health Parity and 

Addiction Equity Act of 2008 (MHPAEA) 

Dear Mr. and Mmes. Secretary: 

The Blue Cross Blue Shield Association (“BCBSA”) appreciates the opportunity to 

provide comments to the Departments of Labor, Treasury, and Health and Human 

Services (“the Departments”) regarding issues under the Paul Wellstone and Pete 

Domenici Mental Health Parity and Addiction Equity Act of 2008 ("MHPAEA" or "the 

Act"). BCBSA represents the 39 independent Blue Cross and Blue Shield Plans 

(“Plans”) that provide health coverage to more than 102 million – one in three – 

Americans. 

As key stakeholders affected by the mental health parity regulations, Plans are 

committed to assisting the Departments in developing reasonable and administrable 

standards for the provision of mental health and substance use disorder benefits 

provided to group health plans. BCBSA is filing these comments in response to the 

Departments’ request for information (RFI) as issued in the Federal Register on April 28, 

2009 and in anticipation of the Interim Final Rule (IFR), which is expected to be issued 

on or before October 3, 2009, the effective date of the Act. Our comments include 

specific recommendations as well as requests for clarification on particular areas for 

regulation. 
May 28, 2009 

Page 2 of 13 

I. Effective Date 

A. BCBSA requests the Departments adopt a non-enforcement policy or good 

faith compliance period for the first plan year for which the Act applies to any 

particular plan. 

 

The Act is generally effective for plan years beginning after October 3, 2009. It is our 

understanding the Departments will issue interim final regulations on or before this date. 

For many applicable Plans, the Act becomes effective January 1, 2010, the first plan 

year following October 3, 2009. It is unclear how many provisions of the Act should be 

interpreted, leaving Plans and sponsors of group health plans unsure of how to 

implement many of the Act’s requirements. Even in the event regulations are issued 

well before October 3, 2009, Plans would have insufficient time to modify their group 

health insurance policies in order to comply with the Act’s requirements as clarified in the 

regulations, as well as meet applicable state filing requirements with regard to such 

policies – including filing the modified policies or riders with multiple states as required. 

Accordingly, BCBSA requests, as well as recommends, that the Departments adopt a 

nonenforcement policy for at least the first plan year following the effective date of the 

Act to provide relief to group health plan sponsors and Plans, so long as policies and 

plans are amended in a good faith effort to comply with the Act. The Departments 

previously adopted such a policy shortly after the first Mental Health Parity Act was 

passed, and various agencies frequently adopt similar policies.1

 A nonenforcement 

policy would allow Plans and group health plan sponsors the necessary time to 

appropriately and adequately address the Act’s requirements with the benefit of the 

Departments’ guidance as expressed in the expected regulations, and file amended 

policies as required under the laws of their states. 

 

1

 See, e.g., Mental Health Parity; Interim Rules HIPAA Mental Health Parity Act; Proposed Rule, 

62 Fed. Reg. 66931, 66956 (Dec. 22, 1997) (under certain circumstances no enforcement action 

will be taken against group health plans that in good faith attempt to comply with certain section 

of Act); FTC Enforcement Policy: Identity Theft Red Flags Rule, 16 CFR 681.2, issued Oct. 22, 

2008, delaying the implementation of the Red Flag rule from November 1, 2008 to May 1, 2009 to 

allow covered entities to adopt appropriate programs, available at 

http://www.ftc.gov/os/2008/10/081022idtheftredflagsrule.pdf. Telemarketing Sales Rule, 69 Fed. 

Reg. 67287, 67290 (Nov. 14, 2004) (FTC "will forbear from bringing any enforcement action for 

violation" of the Telemarketing Sales Rule against certain telemarketers pending completion of 

review of policy); Health Insurance Reform: Modifications to the Electronic Data Transaction 

Standards and Code Sets, 68 Fed. Reg. 8381, 8384 (Feb. 20, 2003) (reserving authority to 

"penalize noncompliance" with the standards to those entities that fail to make reasonable efforts 

to comply during an interim period); Notice and Request for Comments on Annual Reporting 

Enforcement Policy, 62 Fed. Reg. 11929 (March 13, 1997) (SOP 92–6 guidelines applicable after 

December 15, 1995, but absent guidance, the Department would not reject annual reports of 

multiemployer plans filed for the 1996 and 1997 plan years solely for failure to follow SOP 92–6; 

relief extended to 1998 plan years. See Notice on Annual Reporting Policy, 62 Fed. Reg. 65506 

(Nov. 25, 1998)); Technical Release No. 92-01, DOL Enforcement Policy for Welfare Plans with 

Participant Contributions (May 28, 1992) (announcing limited enforcement policy to provide relief 

while Department continued to consider issues). 
May 28, 2009 

Page 3 of 13 

It is well-established that it is within the Departments’ collective discretion to promulgate 

such a nonenforcement policy. There is a general presumption under the Administrative 

Procedures Act (APA) that actions committed to an agency's discretion, such as an 

agency determination not to enforce a statute, are not subject to judicial review under 

the APA. Heckler v. Chaney, 470 U.S. 821, 831 (1985). The temporary nature of the 

requested nonenforcement policy, along with the nonenforcement policy precedent 

under the first Mental Health Parity Act, and the practice of many other agencies under 

similar circumstances, suggests the adoption and publication of a temporary 

nonenforcement policy is well within the discretion of the Departments. 

B. BCBSA requests clarification that the term “plan year” is defined by the 

renewal date for any underlying insurance policy when there is no other plan year 

specified by a group health plan. 

It is possible that plan sponsors will designate in plan documents a plan year that differs 

from a policy's renewal date. In this case, the plan year designated by the plan sponsor 

will control. However, in many cases involving insured group health plans, the employer 

may not have a plan document establishing a plan year for the group health plan. We 

are requesting regulatory confirmation that the renewal dates for the underlying policies 

should control where there is no group health plan year (other than the renewal date for 

the insurance policy) established by the plan sponsor. 

We believe this interpretation is consistent with the term “plan year” as it has been 

interpreted by the Health Care Financing Administration (HCFA) under the Public Health 

Service Act (PHSA) group market rules (to which the Act was added, along with ERISA 

and the Code). In 1999, HCFA issued Insurance Standards Bulletin No. 99-03 providing 

that the COBRA definition of plan year applies for purposes of the Mental Health Parity 

Act of 1996. More specifically, the definition that HCFA provided for the term plan year 

(taken from COBRA regulations) is as follows: 

The year that is designated as the plan year in the plan document of a group health plan, 

except that if the plan document does not designate a plan year or if there is no plan 

document, the plan year is: 

(1) The deductible/limit year used under the plan. 

(2) If the plan does not impose deductibles or limits on a yearly basis, the plan 

year is the policy year. 

(3) If the plan does not impose deductibles or limits on a yearly basis, and 

either the plan is not insured or the insurance policy is not renewed on an 

annual basis, the plan year is the employer’s taxable year. 

(4) In any other case, the plan year is the calendar year. 

We request clarification that, where there is no group health plan document to the 

contrary, the group policy will be treated as the applicable plan document and the 

renewal date of the underlying policy is the controlling plan year for determining the 

effective date of the Act. 
May 28, 2009 

Page 4 of 13 

C. BCBSA requests confirmation that the effective date for multiple employer 

welfare arrangements (MEWAs) can be determined either on an employer-byemployer basis or by using the renewal date for any insurance policy issued to a 

Trust under the MEWA in certain cases. 

The Department of Labor (DOL) generally treats each employer participating in a MEWA 

as having sponsored its own individual plan. Accordingly, we request guidance that the 

effective date for the Act's parity requirements may be determined on an employer-byemployer (or plan-by-plan) basis. Nevertheless, there are many fully-insured MEWAs 

where the insurance policy is issued to an association-sponsored trust and the 

participating employers – often, small employers – do not file a Form 5500 or have a 

separate group health plan document or contract. In those cases, we request 

clarification the Act should be effective as of the renewal date for the policy issued to the 

association-sponsored trust. 

D. BCBSA requests clarification of the effective date for a plan covering both 

union and non-union employees. 

The Act includes a special rule for collectively bargained plans. In the case of a group 

health plan maintained pursuant to one or more collective bargaining agreements 

between employee representatives and one or more employers ratified before the date 

of enactment – October 3, 2008 – the Act shall not apply to plan years beginning before 

the later of: 1) the date on which the last collective bargaining agreements relating to the 

plan terminates; or 2) January 1, 2010. 

Where a plan covers both collectively bargained and non-collectively bargained 

employees, we request guidance clarifying whether the extended effective date for 

collectively bargained plans should be determined based on all facts and circumstances. 

For example, where a majority of plan participants are union employees, the extended 

effective date should apply. On the other hand, where only a few plan participants are 

subject to a collective bargaining agreement, the general effective date should apply to 

the plan as a whole. 

II. Exemptions from the Act 

A. Small Employer Exemption: BCBSA requests guidance that permits the use of 

a full-time equivalency rule and provides deference to state law rules for purposes 

of determining the number of employees. 

 

The Act provides an exemption from the parity requirements for small employers. Under 

the Act, the term small employer is defined as, with respect to a calendar year and a 

plan year, an employer who employed an average of at least two (or one in certain 

states) but not more than 50 employees on business days during the preceding calendar 

year, subject to the controlled group rules under Section 414 of the Code and using rules 

under Section 4980D of the Code with regard to employers not in existence during the 

preceding year and predecessor employers. 

In 1999, HCFA issued Insurance Standards Bulletin No. 99-03 providing the term 

“employee” has the meaning given such term under section 3(6) of ERISA – any 

individual employed by an employer. The Bulletin goes on to state that once it is 

determined there is an employer-employee relationship, the question of whether an 
May 28, 2009 

Page 5 of 13 

employee is full or part-time is irrelevant under the PHSA. In other words, the Bulletin 

requires, for purposes of the PHSA, that full and part-time employees be counted for 

purposes of determining whether an employer meets the small employer exemption from 

the parity requirements. The Bulletin also points out that for purposes of guaranteed 

availability, a state might have a definition of employee that does not include part-time 

employees, but that would be preempted for purposes of the parity requirements. 

We believe a better approach, in general, is found in the language that was proposed as 

part of the parity regulations – that language provided a full-time equivalence (FTE) rule. 

See Prop. DOL Reg. § 2590.732(e). The final regulations, however, did not adopt 

section (e), reserving the calculation of employees for future guidance. Under the FTE 

method, the total number of employees may be determined by totaling all employment 

hours, not to exceed 40, for each full and part-time employee who was not employed 

full-time during the previous year and dividing the total number by a figure that 

represents the annual full-time hours under the employer’s general employment 

practices (not to exceed 40 hours) and adding the result to the average number of FTEs 

employed on business days during the proceeding calendar year. This is an approach 

similar to that used under COBRA. See Treas. Reg. §54.4980B-2 Q&A-5(e). 

We request guidance confirming that one permissible approach for counting employees 

for purposes of the small employer exemption is a full-time equivalency approach similar 

to that found in the proposed parity regulations. It would be far too onerous to require 

small employers to perform one calculation of employees for purposes of determining 

whether COBRA applies, and a second, different calculation of employees for purposes 

of determining whether the parity requirements apply. 

We are also concerned there are states where different approaches are used for 

counting employees (e.g., only eligible employees are counted for community rating laws 

that only apply to small employers). Accordingly, we request guidance that allows plans 

to use the full-time equivalency rule discussed above or applicable state law defining 

small groups. It would be inequitable to require an employer that may have 60 

employees, but is considered a small group under state law because only 45 employees 

are eligible, to be subject to small group community rating and then force the same plan 

to comply with the parity requirements, which are likely to be quite costly. 

B. Cost Exemption: BCBSA requests guidance permitting projected actuarial 

determinations of total costs for plan years after a plan has first met the cost 

exemption. 

If the application of the Act with regard to a particular group health plan results, after six 

months, in an increase for the plan year of the actual total cost of coverage – including 

medical/surgical benefits and mental health/substance use disorder benefits – of two 

percent in the first plan year and one percent in subsequent plan years, then the Plan is 

exempt from the parity requirements under the Act for one year (the second plan year). 

One possible interpretation of the Act would be to require Plans with an increase in total 

cost in excess of two percent in the first plan year to again comply with parity 

requirements under the Act in the third year, exempting the Plan from the parity 

requirements for only the second plan year. If the increase in total cost of coverage 

attributable to the application of the parity requirements is more than one percent in the 

first six months of the plan year, then the Plan would again be exempt from the parity 
May 28, 2009 

Page 6 of 13 

requirements of the Act during the fourth plan year, but would have to comply with the 

parity requirements once again in the fifth plan year, and so on. 

It would be extraordinarily difficult for employers to administer this exemption and for 

participants to understand a group health plan that shifts in and out of compliance each 

plan year with the Act’s parity requirements. A more likely scenario for an employer in 

this situation would be to comply with the Act’s parity requirements in the first plan year, 

make the determination that the increase in total cost is in excess of two percent, and 

take advantage of the cost exemption from parity in the second plan year. Then, the 

employer would amend the group health plan to eliminate all mental health and 

substance use disorder benefits in the third plan year, as permitted under the Act, rather 

than repeat the process to meet the cost exemption every other year. 

We request guidance that provides that, once the cost exemption is met by a particular 

plan, an actuary can make a projected determination of total cost of coverage for 

subsequent plan years. To read the cost exemption otherwise would make the 

exemption virtually unavailable to employers because it would be too difficult to 

administer (and make it more likely the employer would terminate all mental health and 

substance use disorder benefits) and would likely confuse participants as to whether or 

how the parity requirements would apply for a particular plan year. In addition, we 

request guidance clarifying that "cost" includes not only claims experience (including 

prescription drug claims), but also administrative costs associated with complying with 

the parity requirements. 

III. Definitions of a Mental Health or Substance Use Disorder Benefit; Disclosures 

Regarding Medical Necessity Determinations

A. BCBSA requests guidance confirming a group health plan has the flexibility to 

define conditions as medical, mental health, or substance use disorders, so long 

as the classification is based upon the standard practice of medicine or evidencebased treatment guidelines. 

We are requesting the regulations confirm that the definition of a mental health or 

substance use disorder be left to the Plan, except to the extent that a state or federal law 

requires otherwise. Early versions of the Act would have required Plans to use the 

DSM-IV to define mental health and substance use disorders. Congress, however, did 

not include such a requirement in the version of the Act that was passed into law. The 

Act passed into law provides that mental health and substance use disorder benefits are 

defined as benefits with respect to services for mental health or substance use disorder 

conditions (as applicable) as defined under the terms of the plan and in accordance with 

applicable federal and state law. See ERISA §712(e)(4) & (5). 

Accordingly, the regulations should reflect that Plans are not forced to adopt a uniform 

definition of disorders and have the flexibility to classify disorders as either medical or 

mental health conditions or substance use disorders in their own plan document, so long 

as there is scientific or medical support for the classification and the classifications are 

not designed to circumvent the parity requirements (e.g., by classifying a condition that 

is clearly a mental health condition, such as depression, as a medical condition). For 

example, many Plans treat jet lag syndrome or caffeine addiction as medical conditions, 

subject to plan rules regarding medical benefits, even though these conditions may 

appear in the DSM-IV. Whether such conditions are medical or mental health should be 
May 28, 2009 

Page 7 of 13 

left to employer plan sponsors or Plans to determine based on standard practice of 

medicine or evidence-based treatment guidelines. 

B. BCBSA requests guidance confirming that a group health plan has the ability 

to exclude certain conditions and certain treatments, treatment settings, or 

providers from the definition of mental health or substance use disorder benefits 

under the plan. 

Mental health and substance use disorder benefits are defined as benefits with respect 

to services for treatment of mental health or substance use disorder conditions (as 

applicable) as defined under the terms of the plan and in accordance with applicable 

federal and state law. See ERISA § 712(e)(4) & (5). Based on this language, we are 

requesting guidance confirming that Plans are permitted to not only exclude coverage for 

a particular mental health condition or substance use disorder, but also exclude 

coverage for a particular inpatient or outpatient treatment, treatment setting, or provider 

for a mental health condition or substance use disorder that is otherwise covered 

because the treatment, setting, or provider is investigational, experimental, or is not in 

keeping with acceptable medical practice. An example of a commonly excluded 

treatment would be vagal nerve stimulation, which is an unproven treatment for 

depression – and is not even covered by Medicare. 

Based on the language of the statute and as explained above, we believe it is clear that 

exclusions of particular mental health conditions or substance use disorders should be 

permitted. For example, it is permissible to exclude treatment for learning disorders 

altogether unless otherwise required by state law. It should also be permissible for 

group health plans to exclude certain treatments (e.g., certain educational programs) 

and treatment facilities (e.g., "halfway houses") because the Act gives insurers and 

employer plan sponsors the flexibility to define what mental health/substance use 

disorder services are covered under the ERISA plan/group policy. As long as there are 

meaningful evidence-based treatments available for a particular mental health condition 

or substance use disorder, Plans should be permitted to exclude certain treatments or 

settings with respect to mental health conditions or substance use disorders. This would 

be consistent with typical provisions for medical/surgical coverage where a 

medical/surgical condition is generally covered, but certain treatments, settings, or 

providers are excluded. Additionally, Plans should be permitted to have blanket 

exclusions for treatments, settings, or providers that are investigational, experimental, or 

generally not accepted medical practice or settings. 

C. BCBSA requests guidance providing that the rules set forth in the claims 

procedure regulations should be relied upon as the rules for providing 

information upon the denial of mental health benefits. 

Under the Act, group health plans and insurers must provide certain information upon 

the denial of mental health benefits, in accordance with regulations. The Act states: 

 The reason for any denial under the plan (or coverage) or reimbursement or 

payment for services with respect to mental health or substance use disorder 

benefits in the case of any participant or beneficiary shall, on request or as 

otherwise required, be made available by the plan administrator (or the health 

insurance issuer offering such coverage) to the participant or beneficiary in 
May 28, 2009 

Page 8 of 13 

accordance with regulations. 26 U.S.C. §9812(a)(4), 29 U.S.C. §1185a(a)(4) 

and 42 U.S.C. §300gg-51(a)(4). 

Group health plans are already subject to extensive claims procedure regulations that 

set forth rules regarding adverse benefit determinations -- including decisions based on 

medical necessity – requiring that any internal protocol or guideline relied upon in 

making the decision be disclosed. 29 C.F.R. §2560.503-1. It would be unnecessarily 

duplicative to create a new set of rules for providing information with regard to the denial 

of mental health benefits – instead, we are requesting that the regulations defer to the 

existing claims procedure regulations for purposes of denials of mental health benefits. 

IV. Guidance Requested on How Parity is Determined 

The Act prohibits group health plans that provide medical and surgical benefits and 

mental health or substance use disorder benefits from applying financial requirements or 

treatment limits that are more restrictive than the predominant financial requirement or 

treatment limit that applies to substantially all medical and surgical benefits. ERISA § 

712(a)(3)(A). Under this rule, for a limit to be applied to mental health or substance use 

disorder benefits, it must first apply to substantially all medical and surgical benefits, and 

then it must be the predominant limit that applies. 

The Act defines financial requirements to include deductibles, co-payments, 

coinsurance, and out-of-pocket expenses. The Act defines treatment limitations to 

include limits on the frequency of visits, number of visits, days of coverage, or other 

similar limits on the scope or duration of treatment. The Act defines the term 

predominant as the most common or frequent of such type of limit or requirement. 

ERISA § 712(a)(3)(B). The Act does not include a definition of when a financial 

requirement or treatment limit applies to substantially all medical and surgical benefits. 

A. BCBSA requests clarification of when financial requirements and treatment 

limitations would apply to substantially all medical and surgical benefits for 

purposes of determining parity with the mental health/substance use disorder 

benefits under a plan. 

The Act does not define the term “substantially all.” Notably, the 1996 Mental Health 

Parity Act used this term with respect to annual and lifetime limits, which was interpreted 

in subsequent regulations. Those regulations provide useful guidelines, but make more 

sense in the context of requiring parity in annual or lifetime limits. We request the 

guidance retain those guidelines for annual or lifetime limits, but clarify the meaning of 

“substantially all” for purposes of financial requirements and treatment limits. We believe 

a similar method (i.e., one that focuses on the dollar amount or costs based on actual 

claims experience or reasonable actuarial estimates) should be used to determine if a 

treatment limit or financial requirement applies to substantially all medical and surgical 

benefits. 

B. BCBSA requests guidance clarifying that treatment limits and financial 

requirements for mental health/substance use disorder benefits should be in 

parity with medical/surgical benefits based on a side-by-side comparison. 

The Act requires the treatment limits and financial requirements that apply to mental 

health and substance use disorder benefits be no more restrictive than the predominant 
May 28, 2009 

Page 9 of 13 

limitation applied to substantially all medical and surgical benefits covered under the 

plan. A reasonable interpretation of this language is to analyze limits based on same 

categories of services that are generally available for treatment of medical/surgical 

conditions as well as mental health and substance use disorder conditions. In other 

words, for parity purposes, a Plan should be permitted to compare: 1) inpatient days for 

medical and surgical benefits with inpatient days for mental health and substance use 

disorders; 2) outpatient visit limits for medical and surgical benefits with outpatient visit 

limits for mental health visits and substance use disorder benefits; 3) physical therapy 

coverage for medical and surgical benefits with physical therapy coverage for mental 

health or substance use disorder benefits; and so on. Additionally, we request the 

guidance provide flexibility to plan sponsors and Plans to determine the categories of 

services for parity purposes. 

Adopting this interpretive approach ensures parity between treatment categories. To 

read the Act to permit the application of only those limits that apply to substantially all of 

a plan's medical and surgical benefits without regard for similar categories of services 

(e.g., inpatient hospital) would essentially prohibit the application of most limits to mental 

health or substance use disorder benefits – thereby resulting in the disparate treatment 

of medical and surgical and mental health benefits. The Act was intended to provide 

parity for mental health and substance use disorder benefits, not preferential treatment. 

C. BCBSA requests guidance confirming the Act permits differences in medical 

management tools for mental health/substance use disorder benefits. 

The Act explicitly requires parity for treatment limits and financial requirements as well 

as for out-of-network coverage. There is no express provision requiring parity for 

medical management techniques. In our view, had Congress wanted to mandate parity 

in medical management, it would have imposed a similar explicit parity requirement. 

Nevertheless, we request guidance confirming the Act permits differences in medical 

management tools for mental health/substance use disorder benefits. 

We believe our conclusion, based on the statute's construction stated above, is 

supported by the fact the Act includes a rule of construction that states “nothing shall be 

construed as affecting the terms and conditions of the plan or coverage to the extent that 

the plan terms and conditions do not conflict with the new parity requirements.” We 

believe the rule of construction continues to protect medical management tools, 

including medical necessity provisions, so long as those provisions are not in conflict 

with the parity requirements. Finally, we note the Act requires Plans to disclose, upon 

request or as otherwise required by law, criteria used to make medical necessity 

determinations and the reasons for any denial of reimbursement for services. This 

provision indicates that Congress was aware of medical management provisions, and 

rather than imposing a parity mandate, imposed a disclosure requirement for such 

provisions. ERISA § 712 (a)(4). 

In addition, we request guidance that Plans are permitted to utilize the normal and 

customary consequences for failing to meet medical management techniques. For 

example, a typical consequence of failing to obtain preauthorization is that a particular 

treatment is not covered (unless there was a bona fide emergency where prior 

authorization was not reasonable) or the participant may be charged an additional 

amount for the procedure that was not preauthorized. These penalties should not be 

considered to be financial requirements or treatment limits subject to the parity 
May 28, 2009 

Page 10 of 13 

requirements, but are instead an integral part of the medical management tools 

permitted by the Act. 

D. BCBSA requests guidance confirming that separate but equal deductibles are 

permitted under the Act. 

This issue involves the application of the financial requirements parity provision, which 

provides the following: 

 

The financial requirements applicable to such mental health or substance 

use disorder benefits are no more restrictive than the predominant 

financial requirements applied to substantially all medical surgical benefits 

covered by the plan (or coverage), and there are no separate cost sharing 

requirements that are applicable only with respect to mental health or 

substance use disorder benefits. ERISA § 712(a)(1)(A)(i) (emphasis 

added). 

The underscored language above has created some uncertainty regarding the 

ability of Plans to impose separate but otherwise equal deductibles for medical 

and mental health benefits (e.g., each is subject to a $1,000 annual deductible). 

We believe Plans should be able to impose separate but equal deductibles for 

medical/surgical and mental health/substance use disorder benefits for a number 

of reasons. Importantly, the Act specifically defines the term “financial 

requirements” to include deductibles and out of pocket expenses. ERISA § 

712(a)(3)(B)(i). In other words, the Act mandates parity between the deductibles 

that apply to medical benefits and the deductibles that apply to mental health 

benefits – if separate deductibles were not permitted, the requirement in the 

statute explicitly mandating parity in deductibles would have no meaning. 

Accordingly, we believe the parity requirement contemplates that a Plan can 

apply separate deductibles to mental health or substance use disorder benefits 

from the deductibles applied to medical/surgical benefits, provided the 

deductibles are no more restrictive than the deductibles applied to substantially 

all medical surgical benefits covered by the plan. 

Also, focusing on the word “only” in the final clause leads us to believe this language is 

intended either to prohibit a Plan from imposing: 1) a deductible for mental health or 

substance use disorder benefits if the Plan does not impose a deductible for medical and 

surgical benefits; or 2) an additional deductible requirement only for mental health or 

substance use disorder benefits. 

From a practical perspective, this interpretation is necessary because there are many 

group health plans that offer mental health benefits through a separate service provider, 

but still under the same group policy. Nevertheless, the recordkeeping systems are not 

coordinated and it is therefore impossible to track the mental health deductible as part of 

the overall medical deductible. 

Accordingly, we request guidance clarifying that group health plans are able to impose 

separate but equal deductibles for medical/surgical and mental health/substance use 
May 28, 2009 

Page 11 of 13 

disorder benefits, but not different or additional deductibles for mental health/substance 

use disorder benefits. 

E. BCBSA requests guidance that age-based limits are not considered treatment 

limits under the Act. 

The Act prohibits group health plans that provide medical and surgical benefits and 

mental health and substance use disorder benefits from applying treatment limits that 

are more restrictive than the predominant financial requirement or treatment limit that 

applies to substantially all medical and surgical benefits. ERISA § 712(a)(3)(A). The Act 

defines treatment limitations to include limits on the frequency of visits, number of visits, 

days of coverage, or other similar limits on the scope or duration of treatment. 

Some Plans limit coverage for certain developmental disorders that are classified as 

mental health conditions based on age. For example, treatment for a particular disorder 

may not be covered under the plan after a certain age (e.g., age 21). Typically, such 

age-based limits are based on scientific or medical evidence that treatment after a 

particular age would not be effective. When coverage is offered before the age limit is 

met, the number of days and visits could be unlimited (and/or in parity) until the age limit 

is met. Certain medical/surgical benefits may also be subject to limits that are similar 

and effectively age-based (e.g., pediatric care is offered only until a child reaches age 

18), which also reflects generally accepted medical practice and science. 

We are requesting guidance that eliminating coverage at a certain age is not considered 

a limit on the scope or duration of treatment for purposes of applying the parity 

requirements to the treatment limits under a plan. 

F. BCBSA requests guidance that it is permissible for a Plan to charge a 

specialist copay for all mental health service providers, where a primary care 

physician (subject to a general copay) is available under the Plan to refer patients 

to the mental health specialists based on an initial evaluation and diagnosis and 

treatment of a mental health condition or substance use disorder. 

A common plan design involves establishing lower copayments for patients who seek 

care from a primary care provider (e.g., internal medicine, family practitioner, 

pediatrician) and higher copayments for patients that seek care from specialists. As a 

general matter, primary care physicians are often the primary providers of mental health 

services to patients, evaluating, diagnosing, and treating many common mental health 

conditions including depression and attention deficit disorder. When the primary care 

provider has insufficient expertise to effectively diagnose and/or treat the medical or 

mental health condition, they refer the patient to a specialist. Under these 

circumstances, we believe group health plans should be permitted to classify all mental 

health providers as specialists and apply the plan's specialist co-pay to all such 

providers, so long as any specialist co-pay assigned to mental health providers is no 

more restrictive than the co-pays applied to substantially all medical/surgical surgical 

specialists under the plan. 
May 28, 2009 

Page 12 of 13 

IV. Application of State Law Mandates 

BCBSA requests guidance confirming the Act does not preempt any dollar, day, 

or visit limitations – or any other annual or lifetime limit, financial requirement, or 

treatment limitations – on state mandates requiring mental health and substance 

use disorder benefits. 

Both the 1996 and 2008 Acts are subject to the preemption provision of section 731 of 

ERISA and section 2723 of the PHSA, both of which preempt state insurance laws only 

to the extent they would prevent the application of the federal parity standards. Under 

this rule, states are generally free to implement more stringent insurance laws, including 

mental health benefit mandates or more extensive parity requirements. Pursuant to this 

flexibility, states have implemented a wide variety of mental health benefit and 

substance use disorder mandates, but often have limited the cost of those mandates by 

imposing dollar limits or day or visit limitations. Notably, the conference report 

accompanying HIPAA indicates that HIPAA's preemption is intended to be the narrowest 

preemption of state laws. 

We are requesting guidance confirming the Act does not preempt any dollar, day, or visit 

limitations, or any annual or lifetime limits, on state mandates requiring mental health 

and substance use disorder benefits. Those limitations were specifically imposed as 

part of the state political process and were intended to limit the burden on insurers, 

employers, and individuals who would have to pay increased premiums for open-ended 

coverage. If those limits are preempted, the federal government will have effectively 

forced employers to comply with unlimited state mandates which was never the intent of 

the states. Moreover, employers are not required under the Act to offer mental health or 

substance use disorder benefits at all. To require the application of a state law that was 

never intended to require mental health and substance use benefits beyond a certain 

period of time or dollar limit would encourage employers to eliminate mental health and 

substance use benefits altogether. 

We believe the Departments can and should adopt our suggested recommendation. 

First, the Departments could conclude that respecting such state law limits merely allows 

the state to impose a limited mandate, rather than a benefit with impermissible annual 

limits or treatment limits. States should not be forced to rewrite their laws to adopt an 

alternative mandate structure with other types of limits (e.g., on specific treatments, 

covered conditions, etc.). Second, the Departments could conclude that if the Act did 

preempt any limits permitted under state law, preempting that one piece of the law would 

so upset the policy balance intended by the state legislature such that the entire 

mandate would be preempted. See generally Norman Singer, Statutes and Statutory 

Construction v.2, 44:1-44:19 (West Group 7th ed.) (2001) (discussing severability and 

preemption). 

* * * 

Thank you for the opportunity to comment on the MHPAEA and for considering our 

suggested recommendations. We look forward to continuing to work with the 

Departments on implementation issues related to the Act. 
May 28, 2009 

Page 13 of 13 

If you have any questions, please contact Kris Haltmeyer at (202) 626-4814 or at 

kris.haltmeyer@bcbsa.com. 

Sincerely, 

Justine Handelman 

Executive Director 

Blue Cross Blue Shield Association