The Patient Protection and Affordable Care Act (ACA, P.L. 111-148 , as modified by P.L. 111-152 , the Health Care and Education Reconciliation Act of 2010) contains a number of provisions that generally combine to expand the reach of federal mental health parity requirements as established by the Mental Health Parity Act of 1996 (MHPA) and the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). Background

Prior to 1996, health insurance coverage for mental illness had historically been less generous than that for other physical illnesses. Mental health parity is a response to this disparity in insurance coverage, and generally refers to the concept that health insurance coverage for mental health services should be offered on par with covered medical and surgical benefits. The ACA contains a number of provisions which, when considered together, achieve two key goals with respect to mental health parity: (1) they expand the reach of the applicability of the federal mental health parity requirements; and (2) they create a mandated benefit for the coverage of certain mental health and substance abuse disorder services (to be determined through rulemaking) in a number of specific financing arrangements. Federal Mental Health Parity Law Prior to the ACA

Two major mental health parity laws passed at the federal level prior to enactment of the ACA, and together establish the federal mental health parity requirements. These two laws are MHPA, which requires parity in annual and aggregate lifetime limits, and MHPAEA, which expands the federal parity requirements to include parity in treatment limitations, financial requirements, and in- and out-of-network covered benefits. Neither of these laws mandates the coverage of any specific mental health condition; rather, where an insurer chooses to cover both mental health and medical and surgical benefits, they are required to do so in compliance with these parity requirements. Specifically, the ACA expands the reach of federal mental health parity law to three main types of plans: qualified health plans (QHPs), as established by the ACA; Medicaid non-managed care benchmark and benchmark-equivalent plans; and plans offered through the individual market. The ACA did not alter the applicability of parity requirements with respect to the Children's Health Insurance Program (CHIP), but the application of federal mental health parity requirements to CHIP plans, as required in law prior to the ACA, is explained here in detail.
The Patient Protection and Affordable Care Act (ACA, P.L. 111-148, as modified by P.L. 111-152, the Health Care and Education Reconciliation Act of 2010) contains a number of provisions that generally combine to extend the reach of existing federal mental health parity requirements. Prior to 1996, health insurance coverage for mental illness had historically been less generous than that for other physical illnesses. Mental health parity is a response to this disparity in insurance coverage, and generally refers to the concept that health insurance coverage for mental health services should be offered on par with covered medical and surgical benefits.
Prior to enactment of the ACA, two major mental health parity laws had been passed at the federal level, and together created the federal mental health parity requirements. These two laws are the Mental Health Parity Act of 1996 (MHPA, P.L. 104-204), which requires parity in annual and aggregate lifetime limits, and the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA, P.L. 110-343), which expands parity requirements to treatment limitations, financial requirements (e.g., co-payments), and in- and out-of-network covered benefits. Neither of these laws mandates the coverage of any specific mental health condition; rather, where an insurer chooses to cover both mental health and medical and surgical benefits, they are required to do so in compliance with these parity requirements.
The ACA contains a number of provisions which, when considered together, achieve two key goals with respect to mental health parity: (1) they expand the reach of the applicability of the federal mental health parity requirements; and (2) they create a mandated benefit for the coverage of certain mental health and substance abuse disorder services (to be determined through rulemaking) in a number of specific financing arrangements. PPACA expands the reach of federal mental health parity requirements to three main types of health plans: qualified health plans as established by the ACA; Medicaid non-managed care benchmark and benchmark-equivalent plans; and plans offered through the individual market. The ACA did not alter the federal mental health parity requirements with respect to CHIP plans, but the application of the requirements to CHIP plans, as required in law prior to the ACA, is explained here in detail. This report also analyzes the impact of the ACA on the existing small employer exemption under federal mental health parity law.