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This Web site is a component of the SAMHSA Health Information Network. |
Organization & FinancingEffects of the Mental Health Parity Act of 1996This report provides information on the effects of the federal Mental Health Parity Act of 1996 (MHPA), which became effective on January 1, 1998. Under the Act, group health plans providing both medical/surgical benefits and mental health benefits may not impose a lifetime or annual dollar limit on mental health benefits that is less than that applied to its medical/surgical benefits. MHPA includes a sunset provision which becomes effective on September 30, 2001. Group health plans, and health insurance coverage offered in connection with group health plans, are not required by MHPA to provide mental health benefits. In addition, the law does not affect other terms and conditions (e.g., cost sharing and limits on visits or days) relating to the amount, duration, or scope of mental health benefits. Finally, MHPA protections do not extend to benefits for substance abuse or chemical dependency. Employers with 50 or fewer employees are exempt from the Act. Also, a plan may be exempted from the Act if implementation results in an increase in plan costs of at least 1 percent. Method The survey instrument was mailed to a stratified random sample of all U.S. employers including state and local governments who sponsor insurance with ten or more employees and who sponsor insurance. For private firms in the survey, a random sample was drawn from the Dun and Bradstreet database, stratified in eight size categories. All state governments were included; a random sample of county and local governments was drawn from the Census of Governments. The 1998 database included 3725 respondents, representing a 55 percent response rate. Each respondent was requested to be the person "who knows the most about the health care benefits program." For the analysis of questions related to MHPA, respondents not subject to the Act (e.g., those with no MH coverage or with fewer than 50 employees) were eliminated. This left a total of 1946 respondents. Responses from these were weighted to reflect the actual national distribution of employers by firm size. Results Most employer-sponsored health plans treat mental health and substance abuse services similarly. However, MHPA only required plans to equalize spending limits for mental health services. The survey therefore asked employers that had taken some action to comply with MHPA whether they also took the same action for their substance abuse benefits. More than two-thirds (68 percent) said that they did. This response was more common among smaller employers. Finally, there has been concern that MHPA and similar parity mandates may result in employers dropping MH coverage altogether, or increasing other limits in compensation. Table 2 provides information on such actions, for employers that made MHPA-related changes to their benefit. Of these, the large majority (86 percent) indicated that they made no compensatory changes to their benefit, usually because expected cost increases were judged to be minimal or nonexistent. The remainder did make some type of compensatory changes in benefits or administration, most commonly by increasing limits on inpatient days and/or outpatient visits. These types of actions were more common among larger employers. Summary For further information, contact: Table 1
Table 2
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