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May 28, 2009 

Office of Health Plan Standards and 

Compliance Assistance 

Employee Benefits Security Administration 

Room N-5653 

U.S. Department of Labor 

200 Constitution Avenue, N.W. 

Washington, DC 20210 

Attention: MHPAEA Comments 

Re: Comments on the Mental Health Parity Act – Request for Information

Dear Sir / Madam: 

The American Benefits Council (the "Council") and the U.S. Chamber (the “Chamber”) 

appreciate the opportunity to respond to the Request for Information (“RFI”) regarding 

the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act 

of 2008 (the "Act"). 74 Fed. Reg. 19155 (April 28, 2009). We understand from the RFI, 

that a response submitted to one agency will be shared with the other agencies of 

jurisdiction (“Agencies”). 

We are filing these detailed comments with the Agencies at this early stage of the 

rulemaking to ensure that the collective voice of our member companies is heard in the 

event the Agencies issue Interim Final Regulations, rather than a Notice of Proposed 

Rulemaking, by or before October 3, 2009, the Act's effective date. 

The Council is a public policy organization representing principally Fortune 500 

companies and other organizations that assist employers of all sizes in providing 

benefits to employees. Collectively, the Council's members either sponsor directly, or 

provide services to, retirement and health plans that cover more than 100 million 

Americans. 

The Chamber is the world’s largest business federation, representing more than three 

million businesses of every size, sector and region. More than 96 percent of the 
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Chamber’s members are small businesses with 100 or fewer employees, 71 percent of 

which have 10 or fewer employees, yet virtually all of the nation’s largest companies are 

also active members. 

Our members strongly believe in the value of such coverage for employees and 

employers and their health benefits plans typically include mental health and substance 

abuse coverage. As key stakeholders directly impacted by the mental health parity 

rulemaking, we are committed to assisting the Agencies in developing reasonable and 

administrable guidance for the provision of mental health and substance use disorder 

benefits provided to group health plans. Our specific comments are set forth below. 

Adopt a Non-enforcement Policy or Good Faith Compliance Period

We recommend that the Agencies 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 that the Agencies may issue interim final regulations by that date, but 

not in time to provide guidance to plan sponsors who are currently making decisions 

regarding plan design and contractual arrangements in order to be ready for fall open 

enrollment season. As a result, employers will not have sufficient time to modify their 

group health plans in compliance with agency guidance issued this year. In the 

absence of guidance, our members have had to make judgments on a range of 

ambiguous implementation issues. This uncertainty weighs strongly in favor of a 

non-enforcement policy or good faith compliance period for at least one year following 

the Act's effective date. 

It is well-established that the Agencies have the discretion to modulate their 

enforcement approach in the initial years of the Act and to formally promulgate such a 

policy. Importantly, the Agencies adopted a similar approach after the first Mental 

Health Parity Act was passed, and agencies frequently adopt such policies.1

 A nonenforcement policy or good faith compliance period would allow group health plan 

sponsors the necessary time to appropriately and adequately implement the Act's new 

requirements without fear of unfair litigation and enforcement actions. 

 

Clarify the Effective Date for Plans with Union and Non-Union Employees

We recommend that the Agencies clarify the effective date for a plan covering both 

union and non-union employees. The Act includes a special rule for collectively 

 

1

 See, e.g., Mental Health Parity; Interim Rules HIPAA Mental Health Parity Act; Proposed Rule, 62 Fed. 

Reg. 66931, 66956 (Dec. 22, 1997); Health Insurance Reform: Modifications to the Electronic Data 

Transaction Standards and Code Sets, 68 Fed. Reg. 8381, 8384 (Feb. 20, 2003); Technical Release No. 92-01, 

DOL Enforcement Policy for Welfare Plans with Participant Contributions (May 28, 1992). 
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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 clarification that whether the extended effective date for 

collectively bargained plans is applicable may be determined based on all the facts and 

circumstances. For example, where a majority of plan participants are union 

employees, the extended effective date may apply. On the other hand, where only a 

few plan participants are subject to a collective bargaining agreement, then the general 

effective date may apply to the plan as a whole. 

Expand the Cost Exemption to Permit Actuarial Projections 

Under 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 

benefits) of 2% in the first plan year and 1% 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 reading of the Act would be to require plans with an increase in total cost 

in excess of 2% 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 1% in the first six months of the plan year, then 

the plan would again be exempt from the parity 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 

extraordinarily difficult for participants to understand a group health plan that shifts in 

and out of compliance each plan year with the Act's parity requirements. As such, 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. Otherwise, as a practical matter the cost exemption will be unavailable to 

employers and employers will be more likely to drop mental health and substance use 

coverage altogether, rather than provide a more limited benefit pursuant to the 

exemption. 
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Confirm that Classification of a Mental Health Condition is Determined by the Sponsor 

of a Group Health Plan as a Matter of Plan Design.

The regulations should confirm that the classification of a mental health or substance 

use disorder is a matter of plan design as determined by the plan sponsor. Early 

versions of the Act would have required that group health plans use the DSM-IV to 

define mental health and substance use disorders. Congress, however, ultimately 

rejected that approach and provided 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). This 

reflects Congress' clear intent that plan sponsors (and insurers) have the flexibility to 

classify disorders as either medical or mental health conditions in their plan documents, 

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). 

Confirm that Plans May Exclude Certain Conditions, Treatments, Providers and 

Treatment Settings as a Matter of Plan Design

As noted above, the Act 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). Based on 

this language, the regulations should make clear that: 

• group health plans are permitted to exclude coverage for a particular mental 

health or substance use condition, 

• group health plans are permitted to exclude coverage for a particular inpatient or 

outpatient treatment or treatment setting with respect to a mental health or 

substance use condition that is otherwise covered so long as there are meaningful 

other treatments available for that mental health or substance use condition (this 

would be consistent with typical provisions for medical and surgical coverage 

where a medical and surgical condition is generally covered, but certain 

treatments, settings or providers are excluded); and 

• group health plans are permitted to exclude coverage for treatment settings or 

providers where licensure requirements are not satisfied. 

Clarify that Parity Can Be Determined Based on Categories of Services.

 

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 limitations that are more restrictive than the predominant financial 

requirements or treatment limitations that apply to substantially all medical and 
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surgical benefits. ERISA § 712(a)(3)(A). The Act does not define the term “substantially 

all.” 

Notably, the 1996 Mental Health Parity Act used the term “substantially all” with 

respect to annual and lifetime limits. The term was interpreted in subsequent 

regulations which provided useful guidelines in the context of parity in annual or 

lifetime limits. See 29 C.F.R. § 2590.712(b). We recommend that future guidance retain 

the current 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 limitation or financial requirement applies to substantially all medical and 

surgical benefits. 

We further recommend clarification that parity of treatment limitations and financial 

requirements for mental health or substance use disorder benefits with those for 

medical and surgical benefits be based on a comparison of similar benefits. In 

particular, we believe that it is appropriate to analyze treatment limits based on the 

same categories of services that are generally available for treatment of medical and 

surgical conditions as well as mental health and substance use disorder conditions. 

As such, a plan should be permitted to compare inpatient days for medical and surgical 

benefits with inpatient days for mental health and substance use disorder benefits; 

outpatient visit limits for medical and surgical benefits with outpatient visit limits for 

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

that the guidance provide flexibility in allowing plan sponsors to determine the 

categories of services for parity purposes. Adopting this interpretive approach ensures 

parity between treatment categories, which is consistent with the overall objectives of 

the Act. 

Confirm that the Parity Requirements Continue to be Applied Separately to Different 

Benefit Package Options

Section 712(d) of ERISA provides that, where a group health plan offers two or more 

benefit package options under the plan, the parity requirements are applied separately 

to each benefit package option. This provision was unchanged under the Act and 

existing regulations confirm that the parity requirements apply separately to each 

benefit package. Existing regulations provide examples of a group health plan that 

offers two or more benefit packages, including a group health plan that offers 

employees a choice between indemnity coverage or HMO coverage and a group health 

plan that provides one benefit package for retirees and a different benefit package for 

current employees. 29 C.F.R. § 2590.712(c). Since Section 712(d) was not amended by 

the Act, we are requesting confirmation that the parity requirements continue to be 

applied separately to different benefit package options. 
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Clarify the Application of the Parity Requirements to Employee Assistance Programs 

("EAPs")

Employers offer a variety of EAPs to their employees. Some EAPs offer more 

substantive medical, mental health and substance use services, while other programs 

offer more non-personalized, typically referral-only services. The Department of Labor 

has issued guidance that indicates that non-personalized, referral-only EAPs are not 

benefit plans subject to ERISA, but programs that deliver more personalized treatment 

are subject to ERISA. See , e.g., DOL Adv. Op. 91-26A (July 19, 1991); DOL Adv. Op. 

88-04A (Mar. 11, 1988). 

 

EAP programs are delivered differently than typical medical benefits. EAPs are 

generally offered as a separate benefit that is not part of the employer's medical plan, 

typically under a separate agreement with a separate service provider and with a 

separate set of eligibility rules and contribution requirements. The EAP may be offered 

as part of a comprehensive ERISA health and welfare plan, or as a stand alone nonERISA benefit to all employees. 

Compliance with the Act will be virtually impossible if the provision of limited mental 

health or substance use benefits under an EAP must be compared with the medical 

benefits provided under the employer's medical benefit option. It would discourage 

EAP programs from being offered and discourage the provision of these limited mental 

health and substance use programs. 

We seek the following clarifications regarding the treatment of the various types of 

EAPs for purposes of application of the parity requirements: 

• If an EAP is not a welfare benefit plan subject to ERISA, we request confirmation 

that such an EAP is exempt from the requirements of the Act. 

 

• In the event the EAP is an ERISA benefit, to the extent it is offered separate from 

the employer's major medical benefit and pursuant to a separate contractual 

arrangement, we request that the EAP be considered a limited, excepted benefit 

under ERISA §732(c)(1), as defined in ERISA §733(c)(2)(C), that is not subject to 

the Act. In such circumstances, the EAP would be a limited benefit and it would 

not be an integral part of the plan and, as such, should qualify as an excepted 

benefit. Similar to health flexible spending accounts, which are group health 

plans that are considered excepted benefits (if certain requirements are met)2

, 

many EAPs do not offer significant medical benefits and are not integral to the 

employer's medical plan. 

 

2

 62 Fed. Reg. 67687 (Dec. 29, 1997). 
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• Where an EAP is an ERISA benefit, and it does not qualify as an excepted benefit, 

we request confirmation that the EAP is not compared with the plan's medical 

benefits for parity purposes, so long as the EAP is separate benefit from the 

medical benefit offered by the employer (e.g., with distinct eligibility rules -- 

such as automatic enrollment, no employee contributions -- or offered through a 

separate vendor). In other words, the EAP and the medical benefit would be 

treated as different benefit package options to be analyzed separately under the 

parity requirements. Treatment limits and financial requirements applicable to 

mental health benefits offered under the EAP would be compared against the 

medical benefits offered under the EAP, if any, not against the medical benefits 

offered under the medical plan. If there are no medical benefits offered under 

the EAP, the imposition of treatment limits or other limits on the mental health 

or substance use disorder benefits offered under the EAP would not violate 

parity. 

Confirm that Parity is Not Required for Medical Management Tools

We request guidance confirming that the Act does not preclude group health plans 

from employing medical necessity provisions, precertification requirements or other 

medical management tools for mental health or substance use disorder benefits and that 

such tools need not be the same as those used for medical and surgical benefits covered 

under the plan. 

The Act explicitly imposes parity requirements with respect to treatment limitations 

and financial requirements, as well as out-of-network coverage. The Act does not, 

however, expressly extend parity requirements to medical management techniques. In 

fact, the Act includes a rule of construction that states that 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 Act's parity requirements. ERISA 

§ 712(b). 

Since there is no explicit parity requirement for medical management in the Act, none 

should be implied in regulatory guidance by the Agencies. We further note that 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 tools, and rather than impose parity mandate, imposed a 

disclosure requirement on such practices. 

Additionally, we request guidance that plans are permitted to impose the customary 

consequences for failing to satisfy medical management requirements. For example, a 

typical consequence of failing to obtain a preauthorization is that a particular treatment 

is not covered or the participant is required to pay an additional cost for the treatment. 

These consequences are an integral part of the medical management tool permitted by 
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the Act and should not be considered to be financial requirements or treatment limits 

subject to the parity requirements. 

Confirm that Separate Deductibles are Permitted

We request guidance confirming that separate but equal deductibles are permitted 

under the Act. This issue involves the interpretation of the financial requirements 

parity provision, ERISA § 712(a)(1)(A)(i), which includes language that creates 

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 the provision permits plans to impose separate but equal deductibles for 

medical and surgical and mental health or substance use disorder benefits for several 

reasons. Importantly, the Act specifically defines the term financial requirements to 

include deductibles (and out of pocket expenses). ERISA § 712(a)(3)(B)(i). As such, the 

Act mandates parity between the deductibles that apply to medical and surgical 

benefits and the deductibles that apply to mental health or substance use disorder 

benefits. If separate deductibles were not permitted, then the requirement in the statute 

explicitly mandating parity in deductibles would have no meaning. Accordingly, we 

believe the Act permits separate deductibles for mental health (or substance use 

disorders) provided that the deductibles are no more restrictive than the deductibles 

applied to substantially all medical and surgical benefits covered by the plan. 

This is a vitally important issue for many group health plans that offer mental health 

benefits through “carve-out” arrangements with behavioral health service providers 

that is different from the service provider used to administer the medical benefits, while 

still under the same group policy. In such circumstances, the recordkeeping between 

service providers are not typically coordinated and requiring the administration of a 

single deductible would result in a substantial and costly administrative burden to the 

plan. 

Confirm that a Plan May Charge Specialist Copays for Mental Health Providers

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

care from a primary care provider (e.g., internal medicine or a pediatrician) and higher 

copayments for patients that seek care from specialty providers. As a general matter, 

primary care physicians are the primary care providers for diagnosing and treating 

many common medical and mental health conditions. Where the primary care provider 

has insufficient expertise for the medical or mental health condition, they refer the 

patient to specialists. As such, group health plans should be permitted to classify all 

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

providers, so long as any specialist co-pay assigned to mental health providers is no 
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more restrictive than the co-pays applied to substantially all of the plan's 

medical/surgical surgical specialists. 

* * * 

We appreciate the opportunity to provide comments with respect to guidance 

implementing the Paul Wellstone and Pete Domenici Mental Health Parity and 

Addiction Equity Act of 2008. Please do not hesitate to contact Kathryn Wilber at 202-

289-6700 or kwilber@abcstaff.org with any questions or if we can be of further 

assistance. 

Sincerely, 

Kathryn Wilber 

Senior Counsel, Health Policy 

American Benefits Council 

Randel K. Johnson 

Vice President, Labor, Immigration & Employee Benefits 

U. S. Chamber of Commerce