1800 Duke Street Alexandria, VA 22314-3499 +1-703-548-3440 +1-703-535-6490 Fax +1-703-548-6999 TTY/TDD www.shrm.org 

May 28, 2009 

VIA ELECTRONIC MAIL: http://www.regulations.gov

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: Request for Information Regarding the Paul Wellstone and Pete Domenici Mental 

Health Parity and Addiction Equity Act of 2008. 74 Fed. Reg. 19155 (April 28, 

2009). RIN 1210 – AB30.

The Society for Human Resource Management (SHRM) is pleased to submit the following 

comments in response to the Request for Information (RFI) issued by the U.S. Departments of the 

Treasury, Labor and Health and Human Services (Departments or agencies) published April 28, 

2009, for comments regarding issues under the Paul Wellstone and Pete Domenici Mental Health 

Parity and Addiction Equity Act of 2008 (MHPAEA). As one of the key employer groups that 

helped secure passage of the MHPAEA, SHRM looks forward to working with the Departments to 

craft workable implementing regulations. 

SHRM is the world’s largest association devoted to human resource management. 

Representing more than 250,000 members in over 140 countries, the Society serves the needs of 

HR professionals and advances the interests of the HR profession. Founded in 1948, SHRM has 

more than 575 affiliated chapters within the United States and subsidiary offices in China and 

India. 

SHRM respectfully submits these comments in an effort to increase the Departments’ 

understanding of the practical circumstances faced by SHRM members who administer both 

insured and self-insured health care plans. These comments are intended to assist the Departments 

in crafting guidance which promotes the MHPAEA goal of achieving parity in mental health and 

substance use disorder (MHSA) benefits while taking into account the real world difficulties and 

expense of applying MHPAEA to a variety of plan designs within the rapidly approaching effective 
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date for regulatory guidance. Our comments follow the Departments’ request, and then provide 

some additional comments to aid the Departments. 

1. Financial requirements and treatment limits 

The RFI asks for specific information on how treatment limitations and financial 

requirements are currently applied to both medical and surgical benefits as well as mental 

health and substance use disorder benefits. As a threshold matter, most plans apply 

different financial requirements or treatment limits based on treatment setting (e.g., 

outpatient or inpatient services), provider type (e.g., primary care, specialist, or ancillary 

provider), and type of service (e.g., medical, surgical, ancillary, or mental health). 

A. Treatment settings - One common variable in financial requirements or treatment limits 

is the treatment setting, for example, whether the individual receives outpatient or 

inpatient treatment. This distinction is further complicated in the MHSA context by 

frequent use of intermediate treatment settings, such as intensive outpatient, as further 

discussed below. Medical/surgical benefits apply different financial requirements and 

treatment limits to outpatient and inpatient services; they rarely apply outpatient 

financial requirements or limitations on visits to inpatient services. SHRM believes a 

similar approach should be permitted in the MHSA context. Just as it is appropriate to 

apply different requirements and limits to outpatient and inpatient medical and surgical 

benefits due to differences in providers and best medical practice, it is appropriate to 

apply different requirements and limits to outpatient and inpatient MHSA benefits. The 

regulations should reflect that this is an acceptable approach. 

Another challenge in this area is that intermediate levels of care, such as intensive 

outpatient, may be used to deliver MHSA services. Such intermediate levels are not 

typical in medical and surgical benefits. SHRM recommends that the regulations deal 

with intermediate levels of care by allowing employers to compare them to the most 

similar care provided for medical and surgical benefits such as outpatient surgery or 

chemotherapy, as determined by the employer, and apply the parity rules to the financial 

requirements and treatment limitations. 

B. Provider or service type - Within the medical plan context, different financial 

requirements and treatment limits apply based on the type of provider, or the type of 

services. For example, plans often apply different co-pays to benefits provided by 

primary care physicians, physician specialists and non-physician specialists. The 

different co-pays are applied in order to impact consumer behavior; encouraging 

individuals to seek less “costly” care sooner. Similarly, deductibles are commonly used 

to encourage consumer engagement in health care spending, and many employers offer 

several health plan options with different deductibles. Because primary care physicians, 

psychiatrists, psychologists and masters-degree prepared clinicians deliver various 

mental health services, the application of different co-pays can shape appropriate 

consumer use of these professionals. 
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Plans also apply different treatment limits to different types of services. Such limits may 

be based on clinical guidelines, medical necessity criteria, or simply cost management 

approaches. For example, preventive care may be limited to two visits per year, 

chiropractic visits may be limited to ten visits per year, and no limits may be applied to 

primary acute care or specialty acute care services. 

The sound reasoning behind the different financial requirements and treatment limits 

applied to medical/surgical and mental health/substance abuse addresses the nature of 

MHSA benefits and treatments, which often differ tremendously from medical and 

surgical benefits and treatments. 

 SHRM believes the best approach would permit flexibility to encourage consumer 

engagement and acknowledge the differences in providers and services by allowing 

employers to apply a “similar services” test to the financial requirements and treatment 

limit parity rules. For example, outpatient psychotherapy should be subject to no more 

restrictive financial requirements or treatment limitations than are imposed on 

outpatient non-physician specialist services for medical, such as services provided by 

nurse practitioners and physician assistants. Ancillary services, like applied behavior 

analysis, that are delivered by certified individuals who are not primary care or mental 

health specialists, would be treated similar to services ancillary to medical care, such as 

speech therapy. 

2. What terms or provisions require additional clarification to facilitate compliance?

The RFI seeks input on any terms or provisions within the statute that require additional 

explanation in order to facilitate compliance. 

A. “Predominant” and “Substantially all” - Two of the most important terms in the 

statute--“predominant” and “substantially all”--are not clearly defined and could lead to 

significant problems in trying to apply the statutory provisions. For example, financial 

requirements applicable to MHSA benefits are to be no more restrictive than the 

predominant financial requirements applied to substantially all medical and surgical 

benefits covered by the plan. 

“Predominant” - “A financial requirement... is considered to be predominant if it is the 

most common or frequent of such type of limit or requirement.” (See ERISA 

712(a)(3)(B)(ii)). Many group health plans include both deductibles and co-pays or coinsurance for both medical/surgical benefits and for MHSA benefits. Consequently, it 

is difficult or impossible to say which cost-sharing approach is most common or 

frequent with respect to an entire plan. Even if it were possible to determine, the 

underlying reasons for having different types of financial requirements would be 

thwarted if a very literal reading were given to this provision. 
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“Substantially all medical and surgical benefits” – This phrase is not defined in 

MHPAEA. Group health plans may apply different co-pays to primary care, specialist, 

and ancillary service provider visits. For example, a plan may have a $250 per person 

deductible, and in addition apply $10 co-pays to primary care visits, $30 co-pays to 

specialist visits and $50 co-pays to ancillary service provider visits, like chiropractic 

visits. All participants would be subject to the deductible, and all visits would be 

subject to co-pays (until any out-of-pocket maximum is reached). Arguably, the 

predominant financial requirement is deductibles, because all services– whether 

rendered by a provider subject to the co-payment rules, or a hospital, outpatient facility 

or other treatment venue– are subject to the deductible. But since the “predominant 

financial requirement” is what is applied to “substantially all medical and surgical 

benefits” it could also include the co-payments applied to these services. One 

interpretation would be for plans to determine where the majority of participant visits 

are – to primary care, specialists or ancillary service providers and use that statistical 

information to establish the predominant financial requirement. 

By adopting a “similar services” approach or permitting distinctions between different 

categories of treatment, some of the challenges posed by these terms would be 

addressed. 

B. “Separate” or” shared” deductibles - Another concept in MHPAEA that requires 

additional clarification is “there are no separate cost sharing requirements that are 

applicable only with respect to mental health or substance use disorder benefits” and the 

corollary “there are no separate treatment limitations that are applicable only with 

respect to mental health or substance use disorder benefits” (ERISA section 712 

(a)(3)(i) and (ii)). The question is whether “separate” means that there can be no cost 

sharing or treatment limitations that apply only with respect to MHSA benefits, or 

whether it means that any cost sharing or treatment limitations for MHSA benefits must 

be shared with such provisions for medical or surgical benefits. The latter approach 

(which we call a “shared” deductible) would apply any expenses for any type of service 

or from any provider to a single deductible amount. 

A shared deductible would create significant administrative and practical issues, and 

could well detract from the goals of promoting employee health, including mental 

health. The many employers that have carved-out mental health benefits for specialty 

management to a different vendor than their medical benefits may be administratively 

unable to apply mental health services to the deductible maintained by the medical plan 

vendor on a “real-time” basis, resulting in claims payment delays and errors. The lack 

of connectivity among different claims paying systems underlies the Administration’s 

significant investment efforts around health information technology and underscores the 

challenges of imposing a shared deductible. Developing the connectivity frequently 

requires cooperation between competing vendors requires at least daily information 

exchange of personal health information and is expensive to automate. Because of 

concern over whether a shared deductible might be required, some employers have 

moved to eliminate carve-out arrangements, which often have better expertise and focus 
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on MHSA treatment when compared to medical vendors. So, by requiring an actual 

shared deductible, participants needing MHSA treatment may actually receive less 

appropriate care and overall costs may increase as these benefits are managed by nonspecialty vendors. For these reasons, SHRM believes the regulations should permit 

separate deductibles that are equal for medical and MHSA benefits. 

3. Disclosure of medical necessity criteria and reasons for denial

The RFI requests input on what information is currently made available regarding the 

criteria for determinations of medical necessity of mental health or substance use disorder 

benefits under the plan. The MHPAEA includes provisions requiring disclosure of medical 

necessity criteria and reasons for denial of reimbursement or payment for services. SHRM 

believes, however, that with respect to group health plans subject to ERISA, the current 

ERISA disclosure rules (e.g., 29 CFR 2620.104(b)-1 and 2) and claims and appeal rules (29 

CFR 2560.503-1) more than adequately address these requirements. As a result, SHRM 

recommends that the current ERISA disclosure rules be applied to MHPAEA. 

4. Increased cost exemption

The RFI asks for information on which aspects of the increased cost exemption require 

additional guidance. The cost exemption included in the MHPAEA is more complicated 

and onerous than the increased cost exemption contained in the Mental Health Parity Act of 

1996 (MHPA 1996). At the outset, clarification is needed regarding the timing of when the 

plan’s two- percent cost increase must occur. One way to interpret this provision would 

require the two-percent increase in the first plan year when the MHPAEA requirements 

apply (generally, plan years beginning on or after October 3, 2009). A second 

interpretation would require the two-percent increase in the first plan year involved in an 

initial exemption request. In order to ensure availability of the cost exemption to employers 

whose circumstances, plan design, or demographics may change in the future, SHRM 

believes that the proper interpretation is to require the two-percent cost increase in the first 

plan year involved in an initial exemption request.

 A second aspect of the increased cost exemption that the Departments should clarify relates 

to how long the exemption lasts. One way to interpret MHPAEA's provision would exempt 

a plan from the parity requirements only for the next plan year. To qualify for another 

exemption, a plan would, under this interpretation, need to comply with the parity 

requirements again. In other words, the exemption is only available in alternate years. This 

scenario could require constant plan design changes to come into compliance with the 

parity requirements, and because the cost exemption is only valid for one year, many 

employers may elect to forego the cost exemption. The risk of this interpretation is that 

employers who are unwilling to undergo seemingly constant plan design changes, and the 

expense (including retaining an actuary) of the cost exemption, may simply decide to 

eliminate or restrict mental health and substance abuse coverage. Consequently, SHRM 

urges the Departments to pursue flexibility in the regulations to support the goal of 

continuing MHSA coverage by relaxing the alternate year standard and instead allowing an 
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employer to substitute normative claims data (as if the plan had complied with the parity 

requirements) rather than actual claims data. 

5. Additional Comments

A. Effective date - No guidance is required to be issued prior to October 3, 2009. For 

SHRM members and others who are responsible for implementing the regulations for an 

effective date of plan years beginning on or after October 3, 2009, it will be vitally 

important to provide for a delayed effective date. Employers and their vendors spend 

many months in advance of a new plan year discussing plan design and administration 

changes, and typically provide employees with information about plan design well in 

advance of the start of a new plan year. With final details for 2010 plan years now fixed 

or nearing that point, employers and their vendors will soon have virtually no ability to 

change plan design or administration for their 2010 plan years. Employers, vendors, 

and employees should be provided a full annual cycle to implement any required 

changes. 

In order to accommodate the time necessary to implement plan design changes, SHRM 

urges the Departments to adopt a delayed effective date of no earlier than the first plan 

year beginning at least 12 months after final regulations are issued. Prior to such 

effective date, the Departments should require employers to comply with a reasonable, 

good faith interpretation of the law. Reliance on proposed or interim guidance would be 

one alternative, but not the sole method, of demonstrating such good faith compliance. 

B. Employee Assistance Programs - Employee Assistance Programs (EAPs) are a diverse 

umbrella of programs which emphasize services that enhance employee work 

performance. While many EAPs are considered group health plans, most do not provide 

medical or surgical benefits in the traditional sense but instead provide free or low-cost 

short-term counseling and, if appropriate, referrals to an outside provider. As such, 

EAPs should not require changes under the MHPAEA parity rules. The Departments 

should explicitly acknowledge that some EAPs are considered group health plans, but 

that if considered a separate group health plan, with no medical benefits, parity would 

require no changes to EAPs. Furthermore, the agencies should not require that the EAP 

must be considered together with the group health plan and subject to parity 

requirements, as this would have the likely effect of curtailing EAPs which are designed 

to provide a distinct, short-term benefit to prevent the development of a more serious 

mental health condition. We would encourage the agencies to develop regulations that 

acknowledge the special role EAPs play in employer benefit packages, spanning not just 

mental health and substance abuse, but other employee issues.

Many employers use the EAP as a gatekeeper to other MHSA benefits. The EAP 

gatekeeper role is similar to a medical management technique; for example, the EAP 

may complete a telephonic assessment and direct employees to the benefit type (EAP or 

MHSA benefit, or financial, family or other employee assistance resource) and provider 

type best suited to their needs. EAPs are well positioned to assist employees with 
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personal problems and stress resulting from relationships, work and finances. The 

MHSA benefit is focused on treatment of mental health or substance abuse conditions. 

The determination that an employee is best served by the EAP would not be based on 

medical necessity, but whether the problem presented could be effectively addressed in 

the EAP’s short term counseling benefit. Even though the determination is not a 

“medical” one, EAPs should be able to continue to provide this important gatekeeper 

function which improves employee productivity, treatment outcomes, and reduce costs. 

C. ERISA plan vs. benefit option - From a design perspective, it is very difficult to try to 

apply parity to a single ERISA plan. For example, one benefit option may have co-pays 

where another has co-insurance, and it would be difficult if not impossible to apply 

parity overall to such a design. Another example is a PPO, which offers out-of-network 

benefits, and an EPO, which does not. Again, applying parity overall would not make 

sense, because the EPO, by definition, does not offer out-of-network benefits. Another 

example is an employer with a single ERISA plan providing high and low deductible 

options, with different plan features. Each such option should be regarded distinctly for 

purposes of the parity rules. Applying parity on a benefit option basis would better 

parallel common plan designs and is consistent with both past guidance on MHPA and 

the legislative purpose of ensuring that employees accessing mental health benefits are 

treated the same as those accessing medical/surgical benefits. 

Alternatively, but less effective in practical and conceptual terms, employers should be 

able to apply the most generous medical/surgical design to all MHSA benefits – 

regardless of which medical/surgical design option the employee is enrolled in – to 

better accommodate certain forms of MHSA administration and management. For 

example, an employer with three medical/surgical options with deductibles of 

$500/$750/$1000 could apply the $500 deductible to MHSA benefits for an employee 

enrolled in any of the medical options. However, administration may be challenging 

depending on the position taken by the agencies with respect to shared, rather than 

separate, deductibles. 

D. Medical management - While SHRM believes that MHSA benefits must involve

medical management techniques, we do not believe that medical necessity should be the 

sole standard applied in the mental health context. Because the evidence-base for 

treatment of MHSA conditions is more recent and less well-developed than much 

medical research and focused on the more common MHSA conditions, it is often 

difficult to provide clinically-based evidence for certain protocols. Rather, the protocols 

and plan design may also be influenced by employment-related legal concerns, like 

complying with Department of Transportation or OSHA rules. We urge the 

Departments to adopt a flexible and broad interpretation of “medical management” that 

would permit this type of consideration to enter into techniques such as preauthorization, case management, directing members to preferred providers or centers of 

excellence. 
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We also would recommend that financial consequences or penalties associated with 

medical management be considered as part of the permitted medical management 

activities, even if not applied to services in similar levels of care for the medical benefit. 

E. The law permits the plan to define “benefits with respect to services for mental health 

conditions” - We encourage the Departments to adopt a broad interpretation of this 

provision, allowing plans to define both the benefits provided for particular services and 

the conditions covered. For example, a plan should be permitted to exclude services, 

such as applied behavior therapy, just as medical plans may exclude certain services, 

such as chiropractic therapy. We also encourage the Departments to clarify that this 

provision would permit a plan to exclude benefits for services performed in certain 

settings, such as excluding services provided in a non-medical setting. 

F. Diagnostic codes - We would recommend that even if a DSM diagnostic code is 

applicable to an individual’s condition, some services and treatments may be treated as 

medical benefits, such as medical treatments for autism or eating disorders. 

Conclusion

SHRM and its members support the goals of MHPAEA. Yet we encourage the 

Departments to recognize the practical implications of implementation, and not to create 

requirements that could result in diminished coverage for behavioral health conditions. 

Accordingly, SHRM respectfully urges the Departments to adopt a good faith compliance standard 

for MHPAEA for at least the first plan year it is effective for group health plans. 

We welcome the opportunity to assist the Departments as they continue to develop 

guidance on MHPAEA. 

 

Respectfully submitted, 

Michael P. Aitken 

Director, Government Affairs 

Society for Human Resource Management