[Federal Register Volume 74, Number 80 (Tuesday, April 28, 2009)]
[Proposed Rules]
[Pages 19155-19158]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-9629]



[[Page 19155]]

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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 54

RIN 1545-BI70

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 CFR Parts 144 and 146

[CMS-4140-NC]
RIN 0938-AP65


Request for Information Regarding the Paul Wellstone and Pete 
Domenici Mental Health Parity and Addiction Equity Act of 2008

AGENCIES: Internal Revenue Service, Department of the Treasury; 
Employee Benefits Security Administration, Department of Labor; Centers 
for Medicare & Medicaid Services, Department of Health and Human 
Services.

ACTION: Request for Information.

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SUMMARY: This document is a request for comments regarding issues under 
the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction 
Equity Act of 2008 (MHPAEA). The Departments of Labor, Health and Human 
Services (HHS), and the Treasury (collectively, the Departments) invite 
public comments in advance of future rulemaking.

DATES: Comments must be submitted on or before May 28, 2009.

ADDRESSES: Written comments may be submitted to any of the addresses 
specified below. Any comment that is submitted to any Department will 
be shared with the other Departments. Please do not submit duplicates.
    Department of Labor. Comments to the Department of Labor by one of 
the following methods:
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    <bullet> E-mail: <a href="/cdn-cgi/l/email-protection#70355d3f38202333315e3532233130141f1c5e171f06"><span class="__cf_email__" data-cfemail="92d7bfdddac2c1d1d3bcd7d0c1d3d2f6fdfebcf5fde4">[email protected]</span></a>.
    <bullet> Mail or Hand Delivery: Office of Health Plan Standards and 
Compliance Assistance, Employee Benefits Security Administration, Room 
N-5653, U.S. Department of Labor, 200 Constitution Avenue, NW., 
Washington, DC 20210, Attention: MHPAEA Comments.
    Comments received by the Department of Labor will be posted without 
change to http://www.regulations.gov and http://www.dol.gov/ebsa, and 
available for public inspection at the Public Disclosure Room, N-1513, 
Employee Benefits Security Administration, 200 Constitution Avenue, 
NW., Washington, DC 20210, including any personal information provided.
    Department of HHS. Comments to the Department of HHS, identified by 
CMS-4140-NC by one of the following methods:
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    <bullet> Mail: Centers for Medicare & Medicaid Services, Department 
of Health and Human Services, Attention: CMS-4137-NC, P.O. Box 8017, 
Baltimore, MD 21244-8010.
    <bullet> Hand or courier delivery. Comments may be delivered to 
either 7500 Security Boulevard, Baltimore, MD 21244-1850 or Room 445-G, 
Hubert H. Humphrey Building, 200 Independence Avenue, SW., Washington, 
DC 20201. For delivery to Baltimore, please call telephone number (410) 
786-7195 in advance to schedule your arrival with one of our staff 
members. For delivery to Washington, because access to the interior of 
the HHH Building is not readily available to persons without Federal 
Government identification, commenters are encouraged to leave their 
comments in the CMS drop slots located in the main lobby of the 
building. A stamp-in clock is available for persons wishing to retain 
proof of filing by stamping in and retaining an extra copy of the 
comments being filed.
    Inspection of Public Comments. All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. We post all electronic 
comments received before the close of the comment period on the 
following public Web site as soon as possible after they have been 
received: http://www.regulations.gov. Follow the search instructions on 
that Web site to view public comments.
    Comments received timely will be available for public inspection as 
they are received, generally beginning approximately 3 weeks after 
publication of a document, at the headquarters of the Centers for 
Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, 
Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 
p.m. To schedule an appointment to view public comments, call 1-800-
743-3951.
    Internal Revenue Service. Comments to the IRS, identified by REG-
120692-09 by one of the following methods:
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    <bullet> Mail: CC:PA:LPD:PR (REG-120692-09), Room 5205, Internal 
Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 
20044.
    <bullet> Hand or courier delivery: Monday through Friday between 
the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG-120692-09), 
Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue, 
NW., Washington DC 20224.
    All submissions to the IRS will be open to public inspection and 
copying in room 1621, 1111 Constitution Avenue, NW., Washington, DC 
from 9 a.m. to 4 p.m.

FOR FURTHER INFORMATION CONTACT: Mark Connor or Beth Baum, Employee 
Benefits Security Administration, Department of Labor, at (202) 693-
8335; Russ Weinheimer, Internal Revenue Service, Department of the 
Treasury, at (202) 622-6080; Adam Shaw, Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, at (877) 267-2323 
extension 61091.
    Customer Service Information: Individuals interested in obtaining 
information from the Department of Labor concerning employment-based 
health coverage laws, including the nondiscrimination protections, may 
call the EBSA Toll-Free Hotline at 1-866-444-EBSA (3272) or visit the 
Department of Labor's Web site (http://www.dol.gov/ebsa). In addition, 
individuals may request a copy of CMS's publication entitled 
``Protecting Your Health Insurance Coverage'' by calling 1-800-633-
4227.

SUPPLEMENTARY INFORMATION: 

I. Background

    The Paul Wellstone and Pete Domenici Mental Health Parity and 
Addiction Equity Act of 2008 (MHPAEA) was enacted on October 3, 2008 as 
sections 511 and 512 of the Tax Extenders and Alternative Minimum Tax 
Relief Act of 2008 (Division C of Pub. L. 110-343).\1\ MHPAEA amends 
the Employee Retirement Income Security Act of 1974 (ERISA), the Public

[[Page 19156]]

Health Service Act (PHS Act), and the Internal Revenue Code of 1986 
(Code). In 1996, Congress enacted the Mental Health Parity Act of 1996 
(MHPA 1996), which required parity in aggregate lifetime and annual 
dollar limits for mental health benefits and medical and surgical 
benefits. These group market mental health parity provisions were 
codified in section 712 of ERISA, section 2705 of the PHS Act, and 
section 9812 of the Code. The enactment of MHPAEA created new 
requirements and amended several of the existing group market mental 
health parity provisions.
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    \1\ A technical correction to the effective date for 
collectively bargained plans was made by Public Law 110-460.
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    MHPAEA modifies the original definition of mental health benefits 
created by MHPA 1996 and adds a definition of substance use disorder 
benefits. Mental health benefits are defined as benefits with respect 
to services for mental health conditions, defined under the terms of 
the plan and in accordance with applicable Federal and State law. 
Substance use disorder benefits are defined as benefits with respect to 
services for substance use disorders, as defined under the terms of the 
plan and in accordance with applicable Federal and State law.
    While retaining MHPA 1996's requirements for parity in the 
application of aggregate lifetime and annual dollar limits, MHPAEA adds 
new requirements. For group health plans (and health insurance coverage 
offered in connection with group health plans) that provide both 
medical and surgical benefits and mental health or substance use 
disorder benefits, MHPAEA requires plans or coverage to ensure that: 
(1) The financial requirements (including deductibles, copayments, 
coinsurance, and out-of-pocket expenses, but excluding aggregate 
lifetime limits and annual limits (which are subject to MHPA 1996's 
existing 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 and 
surgical benefits covered by the plan; (2) there are no separate cost-
sharing requirements that are applicable only with respect to mental 
health or substance use disorder benefits; (3) the treatment 
limitations (including limits on the frequency of treatment, number of 
visits, days of coverage, or other similar limits on the scope or 
duration of treatment) applicable to such mental health or substance 
use disorder benefits are no more restrictive than the predominant 
treatment limitations applied to substantially all medical and surgical 
benefits covered by the plan; and (4) there are no separate treatment 
limitations that are applicable only with respect to mental health or 
substance use disorder benefits. A financial limit or treatment limit 
is considered to be predominant under MHPAEA if it is the most common 
or frequent of such type of limit or requirement.
    MHPAEA requires the criteria for medical necessity determinations 
made under the plan (or coverage) with respect to mental health or 
substance use disorder benefits be made available by the plan 
administrator (or health insurance issuer) in accordance with 
regulations to any current or potential participant, beneficiary, or 
contracting provider upon request. The reason for any denial under the 
plan (or coverage) of reimbursement or payment for services with 
respect to mental health or substance use disorder benefits in the case 
of any participant or beneficiary must, on request or as otherwise 
required, be made available by the plan administrator (or issuer) to 
the participant or beneficiary in accordance with regulations.
    Under MHPAEA, in the case of a plan or issuer that provides both 
medical and surgical benefits and mental health or substance use 
disorder benefits, if the plan or issuer provides coverage for medical 
or surgical benefits provided by out-of-network providers, the plan or 
issuer must provide coverage for mental health or substance use 
disorder benefits provided by out-of-network providers in a manner that 
is consistent with the requirements of MHPAEA and MHPA 1996.
    MHPAEA amended the two exemptions in subsection (c) of the group 
market mental health parity provisions. MHPAEA exempts group health 
plans (or health insurance coverage offered in connection with such a 
plan) of a small employer from the requirements of the group market 
mental health parity provisions for any plan year. A small employer is 
defined as an employer who employed an average of at least two (or one 
in the case of an employer residing in a State that permits small 
groups to include a single individual) but not more than 50 employees 
on business days during the preceding calendar year.
    MHPAEA also exempts group health plans (or health insurance 
coverage offered in connection with such a plan) from the requirements 
of the group market mental health parity provisions if application of 
the group market mental health parity provisions results in an increase 
for the plan year involved of the actual total costs of coverage with 
respect to medical and surgical benefits and mental health and 
substance use disorder benefits by an amount that exceeds two percent 
for the first plan year in which the law applies and one percent for 
each subsequent plan year. In this case, the requirements of the group 
market mental health parity provisions do not apply to the plan or 
coverage during the following plan year, and such exemption applies for 
one plan year. Of course, an employer may elect to continue to apply 
mental health and substance use disorder parity with respect to the 
group health plan (or coverage) involved regardless of any increase in 
total costs.
    Under this cost exemption, determinations as to increases in actual 
costs under a plan must be made and certified by a qualified and 
licensed actuary who is a member in good standing of the American 
Academy of Actuaries. Exemption determinations must be in a written 
report prepared by the actuary, which must be maintained by the plan or 
issuer for six years following the notification of election to 
implement the exemption. Determinations are to be made after the plan 
has complied with the requirements of the group market mental health 
parity provisions for the first six months of the plan year involved.
    A plan or issuer that qualifies for and elects to implement the 
cost exemption must promptly notify the Secretaries of Labor, Health 
and Human Services, and the Treasury (as appropriate), the appropriate 
state agencies, and participants and beneficiaries in the plan. The 
notifications to the Secretaries, which are confidential, must include 
a description of (1) The number of covered lives under the plan (or 
coverage) involved at the time of the notification (and, as applicable, 
at the time of any prior election of the cost exemption by the plan or 
coverage); (2) a description of the actual total costs of coverage with 
respect to medical and surgical benefits and mental health and 
substance use disorder benefits under the plan (for both the plan year 
upon which a cost exemption is sought and the year prior); and (3) the 
actual total costs of coverage with respect to mental health and 
substance use disorder benefits under the plan (for both the plan year 
upon which a cost exemption is sought and the year prior). The 
Secretaries must make available upon request, but no more frequently 
than annually, an anonymous itemization of these notifications, 
including a breakdown of States by the size and type of employers 
submitting the notification and a summary of the data received. The 
Secretaries and the appropriate state agencies are authorized by MHPAEA 
to audit the

[[Page 19157]]

books and records of a group health plan, or health insurance issuer 
offering coverage in connection with a plan, relating to an exemption.
    As enacted, MHPA 1996 included a sunset provision. This provision 
was amended several times to extend the sunset date, most recently to 
December 31, 2008. MHPAEA eliminates the sunset provision, effective 
January 1, 2009. Thus, the requirements of MHPA 1996 will remain in 
place, except as modified by MHPAEA. Generally, the provisions of 
MHPAEA apply for plan years beginning after October 3, 2009 (for 
calendar year plans, January 1, 2010).
    There is a special effective date rule for group health plans 
maintained pursuant to one or more collective bargaining agreements 
(collectively bargained plans) ratified before October 3, 2008 (the 
date of the enactment of MHPAEA). Under the special rule, MHPAEA's 
requirements will not apply to plan years beginning before the later of 
either the date on which the last of the collective bargaining 
agreements relating to the plan terminates (determined without regard 
to any extension agreed to after October 3, 2008), or January 1, 
2010.\2\ Any plan amendment made pursuant to a collective bargaining 
agreement solely to conform to requirements added by MHPAEA is not 
treated as a termination of the agreement.
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    \2\ This date was changed from January 1, 2009 to January 1, 
2010 by Public Law 110-460, enacted on December 23, 2008.
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II. Solicitation of Comments

A. Comments Regarding Economic Analysis, Paperwork Reduction Act, and 
Regulatory Flexibility Act

    Executive Order 12866 requires an assessment of the anticipated 
costs and benefits of a significant rulemaking action and the 
alternatives considered, using the guidance provided by the Office of 
Management and Budget. These costs and benefits are not limited to the 
Federal government, but pertain to the affected public as a whole. 
Under Executive Order 12866, a determination must be made whether 
implementation of MHPAEA will be economically significant. A rule that 
has an annual effect on the economy of $100 million or more is 
considered economically significant.
    In addition, the Regulatory Flexibility Act may require the 
preparation of an analysis of the economic impact on small entities of 
proposed rules and regulatory alternatives. An analysis under the 
Regulatory Flexibility Act must generally include, among other things, 
an estimate of the number of small entities subject to the regulations 
(for this purpose, plans, employers, and issuers and, in some contexts 
small governmental entities), the expense of the reporting, 
recordkeeping, and other compliance requirements (including the expense 
of using professional expertise), and a description of any significant 
regulatory alternatives considered that would accomplish the stated 
objectives of the statute and minimize the impact on small entities. 
The Departments consider a small entity to be an employee benefit plan 
with fewer than 100 participants.
    The Paperwork Reduction Act requires an estimate of how many 
``respondents'' will be required to comply with any ``collection of 
information'' requirements contained in regulations and how much time 
and cost will be incurred as a result. A collection of information 
includes recordkeeping, reporting to governmental agencies, and third-
party disclosures. The Departments have current approval for 
information collection requirements related to the increased cost 
exemption under MHPA 1996.
    The Departments are requesting comments that may contribute to the 
analyses that will be performed under these requirements, both 
generally and with respect to the following specific areas:
    (i) What policies, procedures, or practices of group health plans 
and health insurance issuers may be impacted by MHPAEA? What direct or 
indirect costs would result? What direct or indirect benefits would 
result? Which stakeholders will be impacted by such benefits and costs?
    (ii) Are there unique costs and benefits for small entities subject 
to MHPAEA (that is, employers with greater than 50 employees that 
maintain plans with fewer than 100 participants)? What special 
consideration, if any, is needed for these employers or plans? What 
costs and benefits have issuers and small employers experienced in 
implementing parity under State insurance laws or otherwise?
    (iii) Are there additional paperwork burdens related to MHPAEA 
compared to those related to MHPA 1996, and, if so, what estimated 
hours and costs are associated with those additional burdens?

B. Comments Regarding Regulatory Guidance

    The Departments are seeking comments to aid in the development of 
regulations regarding MHPAEA. To assist interested parties in 
responding, this request for information describes specific areas in 
which the Departments are particularly interested; however, the 
Departments also request comments and suggestions concerning any area 
or issue pertinent to the development of regulations.
    Specific Areas in Which the Departments Are Interested Include the 
Following:
    1. The statute provides that the term ``financial requirement'' 
includes deductibles, copayments, coinsurance, and out-of-pocket 
expenses, but excludes an aggregate lifetime limit and an annual limit. 
The statute further provides that the term ``treatment limitation'' 
includes limits on the frequency of treatment, number of visits, days 
of coverage, or other similar limits on the scope or duration of 
treatment. Do plans currently impose other types of financial 
requirements or treatment limitations on benefits? How do plans 
currently apply financial requirements or treatment limitations to (1) 
medical and surgical benefits and (2) mental health and substance use 
disorder benefits? Are these requirements or limitations applied 
differently to both classes of benefits? Do plans currently vary 
coverage levels within each class of benefits?
    2. What terms or provisions require additional clarification to 
facilitate compliance? What specific clarifications would be helpful?
    3. What information, if any, regarding the criteria for medical 
necessity determinations made under the plan (or coverage) with respect 
to mental health or substance use disorder benefits is currently made 
available by the plan? To whom is this information currently made 
available and how is it made available? Are there industry standards or 
best practices with respect to this information and communication of 
this information?
    4. What information, if any, regarding the reasons for any denial 
under the plan (or coverage) of reimbursement or payment for services 
with respect to mental health or substance use disorder benefits is 
currently made available by the plan? To whom is this information 
currently made available and how is it made available? Are there 
industry standards or best practices with respect to this information 
and communication of this information?
    5. To gather more information on the scope of out-of-network 
coverage, the Departments are interested in finding out whether plans 
currently provide out-of-network coverage for mental health and 
substance use disorder benefits. If so, how is such coverage the same 
as or different than out-of-network

[[Page 19158]]

coverage provided for medical and surgical benefits?
    6. Which aspects of the increased cost exemption, if any, require 
additional guidance? Would model notices be helpful to facilitate 
disclosure to Federal agencies, State agencies, and participants and 
beneficiaries regarding a plan's or issuer's election to implement the 
cost exemption?

    Signed at Washington, DC, this 24th day of December 2008.
Nancy J. Marks,
Division Counsel/Associate Chief Counsel, Tax Exempt and Government 
Entities, Internal Revenue Service, Department of the Treasury.
    Signed at Washington, DC, this 12th day of January 2009.
W. Thomas Reeder,
Benefits Tax Counsel, Department of the Treasury.
    Signed at Washington, DC, this 21st day of April 2009.
Alan D. Lebowitz,
Deputy Assistant Secretary for Program Operations, Employee Benefits 
Security Administration, U.S. Department of Labor.
    Dated: March 9, 2009.
Charlene Frizzera,
Acting Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. E9-9629 Filed 4-27-09; 8:45 am]
BILLING CODE 4830-01-P; 4510-29-P; 4120-01-P


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