The Mental Health Parity and Addiction Equity Act

The earlier federal parity law, the Mental Health Parity Act of 1996, was narrow. Group plans with 50 or more employees that offered mental health benefits had to apply the same annual and lifetime dollar limits as for medical and surgical care. Day and visit limits and higher cost sharing were untouched, and treatment for substance use disorders was not covered at all.

The federal workforce came next. In 1999 President Clinton directed the Office of Personnel Management to bring full mental health and substance abuse parity into the Federal Employees Health Benefits Program from 2001. Later analysis found that parity there had little effect on spending in managed care plans and lowered out-of-pocket costs.

In the House, Patrick Kennedy and Jim Ramstad sponsored the broader bill; both had spoken publicly about their own problems with drugs or alcohol. In the Senate, Pete Domenici and Paul Wellstone had led the effort until Wellstone's death in a plane crash in 2002. The House passed its version 268 to 148 in March 2008. The measure became law as a provision of the Emergency Economic Stabilization Act, the financial rescue package that President George W. Bush signed on 3 October 2008.

For group plans that offer both kinds of benefit, deductibles, copayments, coinsurance and limits on the number of visits or days for mental health and substance use care could be no more restrictive than the predominant terms for substantially all medical and surgical benefits. Separate cost sharing or limits for behavioural care alone were barred. Plans had to disclose their medical necessity criteria on request and give reasons for denials. The law covered employers with more than 50 employees, allowed a one-year exemption to plans whose costs rose by 1% because of parity (2% in the first year), and did not require any plan to offer mental health benefits.

Regulations followed in February 2010 and November 2013; the 2013 rule also applied to individual market coverage. The Affordable Care Act made mental health and substance use disorder services one of ten essential health benefit categories for new individual and small group plans. The Consolidated Appropriations Act, 2021, required plans to document comparative analyses of their nonquantitative treatment limits, and further final rules came on 9 September 2024.