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MHPA Basics

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What happened to the MHPA and can employees still take advantage of it?

The MHPA is an acronym that stands for the Mental Health Parity Act. This Act is a federal act that became effective on January 1, 1998 and ended on September 30, 2001. It applies to all states across the country. However, some people got a temporary extension of the MHPA to December 31, 2007. Basically, the MHPA requires that there be equal group health plans and equal annual payment limits for mental and physical illnesses as long as a group health plan provided any mental health benefits.

The MHPA applies to group health plans that were sold only to businesses that had 51 or more employees. The plan also applied to large businesses that were self-insured under the Employee Retirement Income Security Act, which is covered by the MHPA.

Before the MHPA came online, private health and mental health insurers generally placed lifetime limits on physical illnesses, such as cancer, diabetes and heart disease. Generally, the lifetime limit for physical illnesses was $1 million while the lifetime limit on mental illnesses was $50,000 or less. Plus, many of these health plans also imposed an annual coverage cap of $10,000 or less for the treatment of mental illnesses. When such a cap was imposed on physical illnesses, the same cap was not (or was rarely) imposed on other medical illness treatments.

The MHPA was in place to prohibit health plan discrimination in the coverage of mental illness treatment. The MHPA does not, however, cover mental health coverage. It does, though, require that is mental health coverage is available, both the annual and the lifetime limits should be equal to those limits that are imposed for all medical benefits.

Group health plans may or may not cover mental health benefits in their packages though. Therefore, the MHPA only applies to group health plans that do offer mental health benefits.