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May 3, 2010 

Department of Labor, Employee Benefits Security Administration 

29 CFR Part 2590 

RIN 1210-AB30 

Department of Health and Human Services, Centers for Medicare & Medicaid Services 

45 CRF Parts 146 

RIN 0938-AP65 

Department of the Treasury, Internal Revenue Service 

26 CFR Part 54 

[TD 9479] 

RIN 1545-BJ05 

Families USA, a nonprofit, nonpartisan consumer advocacy organization dedicated to the 

achievement of high-quality, affordable health care for all Americans, appreciates the 

opportunity to comment on the interim final rules for the Paul Wellstone and Pete Domenici 

Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). 

Families USA strongly supports the interim final rules published by the Department of Labor, 

Department of Health and Human Services, and Department of Treasury. Effective 

implementation of the rules will prevent unequal, restrictive access to mental health and 

substance use disorder services that makes it harder for consumers in large group health plans to 

obtain necessary and appropriate care. This is especially critical for consumers with moderate to 

severe conditions who require regular contact with mental health or substance use disorder 

professionals and medication management. MHPAEA and the interim final rules will make it 

easier for such individuals to obtain timely, appropriate care so that they can be healthy and 

productive members of society. Improved access to care will also prevent conditions from 

escalating into more severe problems, avoiding the development of costly acute conditions. As 

evidenced by experience in the Federal Employees Health Benefits Program (FEHBP) and 

certain states, all of this can be achieved at a negligible cost. 

MHPAEA and the interim final rules build upon the Mental Health Parity Act of 1996 (MHPA 

1996) and the existing patchwork of state mental health parity laws, which vary greatly in the 

protection they provide. MHPAEA and the interim final rules will set a strong foundation to 

protect consumers in large group plans in every state from unequal, discriminatory limits on 

mental health and substance use disorder services, while allowing states to provide additional 

protections to consumers as they see fit. 

Families USA strongly supports the application of MHPAEA’s parity requirements as outlined 

in the interim final rules. The separate application of the parity requirements to each coverage 

unit will provide equity to every covered individual in a large group plan. The separate 

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application of the parity requirements to each type of financial requirement or treatment 

limitation is essential to achieving true equity in access to services. This is also true of the 

application of the parity requirements to each benefit package option or combination of 

medical/surgical and mental health/substance use disorder benefits offered by an employer. 

Families USA believes the interim final rules’ explicit prohibition of administering mental health 

and substance use disorder benefits through a separate plan, without medical/surgical benefits, in 

order to evade the parity requirements will also provide important protection to consumers in 

large group plans. 

Defining Benefit Classifications

Families USA strongly supports the requirement that health plans that offer mental 

health/substance use disorder benefits must provide them for all covered conditions in each of 

the listed classifications for which medical/surgical benefits are provided. This requirement will 

help to ensure that evidence-based, medically appropriate mental health and substance use 

disorder care is accessible to patients who need it. The interim final rules apply this requirement 

to out-of-network care as well as to in-network care, which is critical since many consumers 

receive mental health and substance use disorder services out-of-network. Families USA 

recommends that the Departments specify in the rules that the application of this requirement to 

out-of-network services includes parity for any protections against high out-of-network costs that 

plans may provide for enrollees, such as an exception from higher costs for out-of-network 

emergency care. 

Determining Applicable Financial Requirements and Quantitative Treatment Limitations

Families USA supports the interim final rules’ prohibition of the application of financial 

requirements or quantitative treatment limitations to mental health/substance use disorder 

services unless they apply to at least two-thirds of medical/surgical benefits in a given 

classification. This definition of when requirements or limits apply to “substantially all” 

medical/surgical benefits in a classification will ensure that such restrictions are fairly applied to 

mental health/substance use disorder services. Families USA also supports the interim final 

rules’ requirement that plans apply the “predominant” level of financial requirements or 

treatment limitations placed on medical/surgical services to mental health/substance use disorder 

benefits. This is essential for true parity in access to mental health/substance use disorder 

services. 

However, when no single level of a financial requirement or treatment limitation applies to more 

than one-half of medical/surgical benefits subject to that restriction, the process of determining 

the predominant level is cumbersome and may not result in the most consumer friendly outcome. 

Families USA would prefer that the alternative, simpler option that plans may use, in which they 

treat the least restrictive level of a financial requirement or quantitative treatment limit as the 

predominant level, always be required in these situations. Or, could the Departments consider 

requiring that plans combine the levels of a requirement in the order that they are most prevalent, 

instead of allowing plans to start with the most restrictive level? In this case, a plan’s calculation 

would start with the most common level of a requirement and work from there until the 

combination exceeds one-half of the benefits subject to a restriction. The predominant level 

would then be the least restrictive level in the combination. This process might better achieve the 

intent of MHPAEA to eliminate barriers to mental health/substance use disorder services. 
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In addition, commentary to the interim final rules states that plans may not distinguish between 

specialists and generalists when determining the predominant level of a financial requirement in 

order to comply with MHPAEA. Families USA supports this position and urges the Departments 

to restate this prohibition in the contents of the regulations in addition to its inclusion in the 

commentary. 

Application of Cumulative Financial Requirements and Quantitative Treatment Limitations

Families USA strongly supports the interpretation of MHPAEA in the interim final rules that 

plans may only apply one combined deductible (or other cumulative financial requirement or 

quantitative treatment limitation) for mental health/substance use disorder and medical/surgical 

services. Allowing two “separate but equal” deductibles would not be consistent with the intent 

of MHPAEA to “eliminate barriers that impede access to and utilization of mental health and 

substance use disorder benefits.” If deductibles were not combined for mental health/substance 

use disorder and medical/surgical services, individuals who required care for mental health or 

substance use disorders would be subject to two deductibles, while plan enrollees who did not 

require such services would only have to satisfy one deductible. In this case, even if plans 

applied a lesser deductible to mental health/substance use disorder services than to 

medical/surgical services, parity still would not be achieved. Separate deductibles would result 

in inequitable restrictions on mental health/substance use disorder benefits that would pose a 

large and unequal burden on consumers who need them, impeding their ability to obtain timely, 

appropriate care. 

We are aware that some health plans are concerned about the costs of converting their systems to 

accommodate a combined deductible for mental health/substance use disorder and 

medical/surgical benefits. While some plans may face a one-time cost for implementing this 

change, which the Departments found to be as low as $35,000 (with a small maintenance cost in 

years thereafter), without a combined deductible, consumers who need mental health/substance 

use disorder services would incur a disparate cost burden not just once, but year after year. The 

disparate cost burden of two separate deductibles for mental health/substance use disorder and 

medical/surgical services each year could make necessary care unaffordable for consumers. This 

could lead them to delay or forgo the services they need, leaving their conditions untreated, only 

to worsen and eventually become more expensive to treat. Such a result runs contrary to the 

intent of MHPAEA to eliminate barriers to necessary mental health and substance use disorder 

services. Therefore, we strongly support the Departments’ interpretation that separate cumulative 

financial restrictions and quantitative treatment limitations for mental health/substance use 

disorder and medical/surgical services violate MHPAEA. 

If, when implementing a combined deductible for mental health/substance use disorder and 

medical/surgical benefits, the exchange of information between administrators for each type of 

benefit does not occur in real-time, safeguards will be necessary to ensure that health plan 

enrollees are not overcharged for services. For example, if plan enrollees receive both mental 

health and medical services on the same day, they may end up paying more out-of-pocket than is 

required by their deductible because cost information from the mental health and medical 

benefits administrators may not have been combined yet. Therefore, a process to retroactively 

refund overpayments by enrollees must be in place if the exchange of information between 

benefits administrators does not occur in real-time. To ensure that this process is effective and 

that consumers are not overcharged, the Departments should require that patients receive notice 

of their right to a single, combined deductible and contact information of whom in their health 
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plan and in the enforcing departments to contact if they believe they have been overcharged 

through a cumulative financial requirement in violation of MHPAEA. 

Application of Aggregate Lifetime and Annual Dollar Limits

Families USA supports the interim final rules’ requirements regarding annual and lifetime limits, 

which mirror those for MHPA 1996. Due to the passage of the Patient Protection and Affordable 

Care Act (PPACA), lifetime limits on mental health/substance use disorder benefits will soon be 

prohibited and annual limits will be restricted, providing important new protections to 

consumers. The Departments will need to modify the MHPAEA regulations to reflect these 

changes. In addition, it will be necessary to ensure that after the restriction on annual limits takes 

effect, plans maintain parity as they modify the annual limits that apply to medical/surgical 

benefits, until PPACA outright prohibits annual limits in 2014. 

Application of Nonquantitative Treatment Limitations

The interim final rules outline MHPAEA’s parity requirements for nonquantitative treatment 

limitations. Families USA supports that included among these are standards for provider 

admission into a network and reimbursement rates, including methods for determining usual, 

customary, and reasonable charges. The application of parity to these factors is critical, as access 

to providers can be a large barrier to care for consumers needing mental health and substance use 

disorder services, even when they have insurance. MHPAEA and the interim final rules will 

ameliorate this problem, making it easier for consumers to obtain mental health and substance 

use disorder care from appropriate providers. 

The interim final rules state that plan enrollees cannot be required to exhaust employee 

assistance program (EAP) benefits before they are eligible for covered mental health or 

substance use disorder benefits if they do not face the same EAP requirements for medical or 

surgical benefits. This will make appropriate care more accessible to consumers by eliminating a 

barrier to obtaining necessary services from mental health and substance use disorder providers. 

In addition, the interim final rules specify that the processes, strategies, evidentiary standards, or 

other factors used in applying nonquantitative treatment limitations must be comparable for 

medical/surgical and mental health/substance use disorder benefits, both in the plans’ policies as 

written and in the way they are applied in operation. Families USA supports this requirement and 

believes it is critical to ensuring that the application of nonquantitative limitations does not 

become a loophole to the parity requirements. 

As the interim final rules recognize, the settings where evidence-based, medically appropriate 

mental health and substance use disorder services are delivered and the types of services that are 

necessary may differ from those for medical or surgical conditions. Therefore, the delivery 

settings and types of treatment included in the benefit classifications (such as outpatient, 

inpatient, and emergency) for mental health and substance use disorders to which the parity 

requirements apply should be somewhat different and/or broader than the settings and treatments 

included in the classifications for medical/surgical benefits. Families USA believes that limiting 

mental health and substance use disorder parity requirements only to settings and treatments that 

apply to medical and surgical benefits would not match MHPAEA’s intent of eliminating 

barriers to mental health and substance use disorder services. Therefore, we recommend that the 

Departments clarify that MHPAEA requires that a full scope of mental health/substance use 

disorder benefits be included in each covered benefit classification. This will ensure that 
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consumers can access necessary and appropriate services such as counseling and non-hospital 

residential treatment. 

Exemptions from Parity Requirements

MHPAEA exempts small employers from complying with parity requirements. The interim final 

rules refer to small employers as those with no more than 50 workers. Families USA has some 

concerns regarding the interaction of PPACA with the small employer exemption in MHPAEA. 

PPACA modifies the Public Health Services Act (PHSA), and thereby the Employee Retirement 

Income Security Act (ERISA) and the IRS Code of 1986, to define small employers as those 

with no more than 100 workers. In general, this change is beneficial to consumers. However, in 

the case of the parity requirements, it may result in the negative consequence of exempting more 

employers from the requirements if MHPAEA is interpreted as incorporating the definition of a 

small employer from ERISA, PHSA, or the IRS Code of 1986. Families USA believes that this 

impact on the parity requirements is an unintended effect of PPACA and may even be a drafting 

error. Therefore, we recommend that the MHPAEA final rules clarify that the change in the 

definition of small businesses made by PPACA does not affect the parity requirements of 

MHPAEA, and that businesses remain subject to the requirements unless they have 50 or fewer 

employees. 

Businesses can also receive a cost exemption from the parity requirements. MHPAEA allows 

plans to receive such exemptions for no more than one year at a time. This will limit 

longstanding negative effects on consumers’ access to mental health and substance use disorder 

services. However, it may be slightly confusing for plan enrollees whose mental health and 

substance use disorder benefits could change from year to year. Therefore, Families USA 

recommends that plans be required to provide a one-page notice each year of any changes in 

coverage due to this exemption. In addition, to ensure transparency, the certification a plan 

receives for a cost exemption, as well as the documents a plan files in order receive the 

exemption, should be available to plan enrollees. 

Disclosures and Notices to Consumers

MHPAEA includes disclosure requirements that will help consumers understand their health 

plans’ benefits and policies. These requirements will help ensure that consumers’ rights are 

upheld by providing them information about medical necessity criteria and denials of claims, 

facilitating their ability to file appeals when they see fit. 

In addition to the medical necessity and claim denial disclosure requirements included in the 

MHPAEA statute, Families USA recommends that plans also be required to provide notice to 

consumers of their general rights to parity under MHPAEA. Plans should be required to include 

this notice both in general plan materials and in any notice of a denied claim for mental 

health/substance use disorder services (along with the other notices that are required in cases of 

claims denials). The notice should state that, by law, health plans may not subject mental health 

and substance use disorder services to more restrictive financial requirements or treatment 

limitations than those that apply to medical and surgical services. In order to ensure that this 

right is upheld, plans should be required to provide notice of who enrollees can contact in the 

responsible departments if they suspect violations of the parity requirements. The notice should 

describe specific potential violations including: 

 Failure to reasonably define mental health/substance use disorder and 
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medical/surgical benefits, 

 Failure to comply with parity requirements when applying financial requirements 

or quantitative treatment limitations, 

 Failure to comply with parity requirements when classifying prescription drugs 

into tiers, 

 Failure to comply with parity requirements when applying cumulative financial 

requirements and treatment limitations, including failure to apply only one 

combined deductible or other cumulative requirement to both mental 

health/substance use disorder and medical/surgical benefits, 

 Failure to comply with parity requirements when applying aggregate lifetime and 

annual dollar limits, and 

 Failure to comply with parity requirements when applying nonquantitative 

limitations. 

Interaction with State Laws

Families USA strongly supports the interim final rules’ interpretation of MHPAEA that the 

federal parity requirements do not preempt any state laws mandating a minimum level of mental 

health or substance use disorder coverage in insurance plans, as long as MHPAEA can be 

applied as required by federal law. The interim final rules recognize that state laws may require 

some fully insured plays to provide mental health and/or substance use disorder services, even 

though MHPAEA does not require them to do so. In addition, Families USA recommends that 

the rules clarify that states can continue to enact laws regarding coverage of mental health and 

substance use disorder services that require greater consumer protection in insurance plans than 

MHPAEA as long as the laws allow for the application of MHPAEA. 

MHPAEA Enforcement

Proper enforcement of MHPAEA and the interim final rules will be essential to ensuring that the 

implementation of MHPAEA matches the intent of Congress that consumers have parity in their 

mental health/substance use disorder and medical/surgical benefits. Families USA is concerned 

that the interim final rules include no specific process through which the responsible federal 

departments will ensure compliance with the law. We believe that a formal mechanism must be 

in place so that the federal departments are aware of plans that fail to comply with the parity 

requirements. 

Therefore, we suggest that the Departments require health plans and issuers to submit reports 

with data on how they comply with the parity requirements. Plans and issuers should be required 

to submit annual reports to the agencies tasked with enforcing MHPAEA that include: 

 The standards the plan used to define mental health/substance use disorder and 

medical/surgical services, 

 The calculations the plan used to determine whether financial requirements or 

treatment limitations apply to "substantially all" medical/surgical benefits and the 

calculations the plan used to determine the predominant levels of the restrictions, 

 The factors the plan used to classify drugs into specific tiers, 

 The calculations the plan used to determine the share of medical/surgical benefits to 

which lifetime or annual limits apply and calculations the plan used to determine the 

applicable limits, including calculations of "weighted averages" where applicable, 
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and 

 The clinical criteria the plan used when applying nonquantitative limits that result in 

different restrictions placed on mental health/substance use disorder services and 

medical/surgical services. 

In addition, Families USA recommends that the Departments conduct periodic audits and other 

reviews, both randomly and in response to consumer complaints, to ensure that plans comply 

with the parity requirements. Some of the potential violations that audits should examine are 

listed in the above section, "Disclosures and Notices to Consumers." 

All departments with MHPAEA oversight and enforcement responsibilities should prominently 

display individuals’ rights under MHPAEA and contact information for the department 

responsible for responding if a consumer believes his or her MHPAEA rights are being violated 

on their websites. The departments should also conduct outreach, such as through the media, in 

order to publicize individuals’ rights under MHPAEA. 

Thank you for considering our comments on the interim final rules for MHPAEA, which will 

have a profound effect on consumers’ access to critical mental health and substance use disorder 

services. 

If you have any questions, please contact Claire McAndrew at cmcandrew@familiesusa.org or 

by telephone at 202-628-3030. 

Sincerely, 

Claire McAndrew, MPH 

Health Policy Analyst 

Families USA