Interim Final Amendment for Mental Health Parity
[Federal Register: September 27, 2002 (Volume 67, Number 188)]
[Rules and Regulations]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
DEPARTMENT OF LABOR
Pension and Welfare Benefits Administration
29 CFR Part 2590
Interim Final Amendment for Mental Health Parity
AGENCY: Pension and Welfare Benefits Administration, Department of
ACTION: Interim final amendment to regulation.
SUMMARY: This document contains an interim final amendment to modify
the sunset date of interim final regulations under the Mental Health
(MHPA) to be consistent with legislation passed during the 107th
DATES: Effective date. The interim final amendment is effective
September 30, 2001.
Applicability dates. The requirements of the interim final
amendment apply to group health plans and health insurance issuers
offering health insurance coverage in connection with a group health
plan beginning September 30, 2001.
The MHPA interim final amendment extends the original sunset date
from September 30, 2001 to December 31, 2002. Pursuant to the extended
sunset date, MHPA requirements do not apply to benefits for services
furnished on or after December 31, 2002.
FOR FURTHER INFORMATION CONTACT: Mark Connor, Pension and Welfare
Benefits Administration, Department of Labor, at (202) 693-8335.
Customer Service Information: Individuals interested in obtaining
additional information on the Mental Health Parity Act and other health
care laws may request copies of Department of Labor publications
concerning changes in health care law by calling the PWBA Toll-Free
Hotline at 1-866-275-7922. Information on the Mental Health Parity Act
and other health care laws is also available on the Department of
Labor's Web site (http://www.dol.gov/pwba).
The Mental Health Parity Act of 1996 (MHPA) was enacted on
September 26, 1996 (Pub. L. 104-204, 110 Stat. 2944). MHPA amended the
Employee Retirement Income Security Act of 1974 (ERISA) and the Public
Health Service Act (PHS Act) to provide for parity in the application
of annual and lifetime dollar limits on mental health benefits with
dollar limits on medical/surgical benefits. Provisions implementing
MHPA were later added to the Internal Revenue Code of 1986 (Code) under
the Taxpayer Relief Act of 1997 (Pub. L. 105-34, 111 Stat. 1080).
The provisions of MHPA are set forth in Part 7 of Subtitle B of
Title I of ERISA, Chapter 100 of Subtitle K of the Code, and Title
XXVII of the PHS Act.\1\ The Secretaries of Labor, the Treasury, and
Health and Human Services share jurisdiction over the MHPA provisions.
These provisions are substantially similar, except as follows:
\1\ Part 7 of Subtitle B of Title I of ERISA, Chapter 100 of
Subtitle K of the Code, and Title XXVII of the PHS Act were added by
the Health Insurance Portability and Accountability Act of 1996
(HIPAA), Pub. L. 104-191.
- The MHPA provisions in ERISA generally apply to all group
health plans other than governmental plans, church plans, and certain
other plans. These provisions also apply to health insurance issuers
that offer health insurance coverage in connection with such group
health plans. Generally, the Secretary of Labor enforces the MHPA
provisions in ERISA, except that no enforcement action may be taken by
the Secretary against issuers. However, individuals may generally
pursue actions against issuers under ERISA and, in some circumstances,
under State law.
- The MHPA provisions in the Code generally apply to all
group health plans other than governmental plans, but they do not apply
to health insurance issuers. A taxpayer that fails to comply with these
provisions may be subject to an excise tax under section 4980D of the
- The MHPA provisions in the PHS Act generally apply to
health insurance issuers that offer health insurance coverage in
connection with group health plans and to certain State and local
governmental plans. States, in the first instance, enforce the PHS Act
with respect to issuers. Only if a State does not substantially enforce
any provisions under its insurance laws will the Department of Health
and Human Services enforce the provisions, through the imposition of
civil money penalties. Moreover, no enforcement action may be taken by
the Secretary of Health and Human Services against any group health
plan except certain State and local governmental plans.
B. Overview of MHPA
The MHPA provisions are set forth in section 712 of ERISA, section
9812 of the Code, and section 2705 of the PHS Act. MHPA applies to a
group health plan (or health insurance coverage offered by issuers in
connection with a group health plan) that provides both medical/
surgical benefits and mental health benefits. MHPA's original text
included a sunset provision specifying that MHPA's provisions would not
apply to benefits for services furnished on or after September 30,
2001. On December 22, 1997 the Departments of Labor, the Treasury, and
Health and Human Services issued interim final regulations under MHPA
in the Federal Register (62 FR 66931). The interim final regulations
included this statutory sunset date.
On January 10, 2002, President Bush signed H.R. 3061 (Pub. L. 107-
116, 115 Stat. 2177), the 2002 Appropriations Act for the Departments
of Labor, Health and Human Services, and Education.\2\ This legislation
extends MHPA's original sunset date under ERISA, the Code, and the PHS
Act, so that MHPA's provisions will not apply to benefits for services
furnished on or after December 31, 2002. Like MHPA, the amendment to
MHPA applies to a group health plan (or health insurance coverage
offered by issuers in connection with a group health plan) that
provides both medical/surgical benefits and mental health benefits.\3\
As a result of the statutory amendment, and to assist employers, plan
sponsors, health insurance issuers, and workers, the Department of
Labor has developed this amendment of the interim final regulations, in
consultation with the Departments of the Treasury and Health and Human
Services, conforming the regulatory sunset date to the new statutory
\2\ During the 107th Congress, legislation was passed by the
Senate to substantively amend and expand the provisions of MHPA
already in place. This legislation was offered as an amendment to
the provisions of H.R. 3061. The Conference Report accompanying the
underlying provisions of H.R. 3061 states that instead of the
amendment proposed by the Senate, the amendment to MHPA contained in
H.R. 3061 extends the original sunset date of MHPA, so that MHPA's
provisions will not apply to benefits for services furnished on or
after December 31, 2002. H.R. Rep. 107-342, at 170 (2001).
\3\ The parity requirements under MHPA, the interim regulations,
and the amendment to the interim regulations do not apply to any
group health plan (or health insurance coverage offered in
connection with a group health plan) for any plan year of a small
employer. The term ``small employer'' is defined as an employer who
employed an average of at least 2 but not more than 50 employees on
business days during the preceding calendar year and who employs at
least 2 employees on the first day of the plan year.
On March 9, 2002, President Bush signed H.R. 3090, the Job Creation
and Worker Assistance Act of 2002 (Pub. L. 107-147, 116 Stat. 21), that
included an amendment to section 9812 of the Code (the mental health
parity provisions). This legislation further extends MHPA's original
sunset date under the Code to December 31, 2003. The Joint Committee on
Taxation's technical explanation of H.R. 3090 (JCT Report) states that
the January 10th amendment to MHPA restored the excise tax
retroactively to September 30, 2001. Under H.R. 3090, the excise tax
provision of MHPA is amended to apply to benefits for such services
furnished on or after January 10, 2002 and before January 1, 2004.
MHPA's parallel provisions contained in ERISA and the PHS Act were not
amended regarding either the period between September 30, 2001 and
January 10, 2002 or the extension of the sunset date beyond December
31, 2002. As indicated by the JCT Report, H.R. 3061 restored the
MHPA provisions retroactively to September 30, 2001. Therefore, the
Department is making the effective date of this interim final amendment
to the regulations effective September 30, 2001. The Department is also
making conforming changes extending the duration of the increased cost
exemption to be consistent with the new sunset date. Since the statute
is retroactive, making the regulation retroactive limits confusion and
disruption to employers, plan sponsors, and workers.
Since the extension of this sunset date is not discretionary, this
amendment to the MHPA regulations is promulgated on an interim final
basis pursuant to Section 734 of ERISA. This interim final amendment is
also promulgated pursuant to Section 553(d)(3) of the Administrative
Procedure Act, allowing for regulations to become effective immediately
for good cause.
C. Executive Order 12866
Under Executive Order 12866, the Department must determine whether
a regulatory action is ``significant'' and therefore subject to the
requirements of the Executive Order and subject to review by the Office
of Management and Budget (OMB). Under section 3(f), the order defines a
``significant regulatory action'' as an action that is likely to result
in a rule: (1) Having an annual effect on the economy of $100 million
or more, or adversely and materially affecting a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or State, local or tribal governments or communities (also
referred to as ``economically significant''); (2) creating serious
inconsistency or otherwise interfering with an action taken or planned
by another agency; (3) materially altering the budgetary impacts of
entitlement grants, user fees, or loan programs or the rights and
obligations of recipients thereof; or (4) raising novel legal or policy
issues arising out of legal mandates, the President's priorities, or
the principles set forth in the Executive Order.
Pursuant to the terms of the Executive Order, it has been
determined that this action is not a ``significant regulatory action''
within the meaning of the Executive Order. This action is an amendment
to the 1997 interim final regulations and merely extends the regulatory
sunset date to conform to the new statutory sunset date added by H.R.
D. Paperwork Reduction Act
The information collection provisions of MHPA incorporated in the
Department's interim final rules are currently approved under OMB
control numbers 1210-0105 (Notice to Participants and Beneficiaries and
Federal Government of Electing One Percent Increased Cost Exemption),
and 1210-0106 (Calculation and Disclosure of Documentation of
Eligibility for Exemption). These information collection requests are
approved through November 30, 2004 and October 31, 2004, respectively.
Because no substantive or material change is made to the approved
information collection provisions in connection with this interim final
amendment, no submission for continuing OMB approval is required or
made at this time.
E. Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) imposes
certain requirements with respect to federal rules that are subject to
the notice and comment requirements of section 553(b) of the
Administrative Procedure Act (5 U.S.C. 551 et seq.). Because this
amendment to the 1997 interim final regulations is being published on
an interim final basis, without prior notice and a period for comment,
the Regulatory Flexibility Act does not apply.
F. Unfunded Mandates Reform Act
For purposes of the Unfunded Mandates Reform Act of 1995 (Pub. L.
104-4) (UMRA), as well as Executive Order 12875, this interim final
amendment does not include any Federal mandate that may result in
expenditures by State, local, or tribal governments, and does not
include mandates that may impose an annual expenditure of $100 million
or more on the private sector.
G. Congressional Review Act
This interim final amendment is subject to the Congressional Review
Act provisions of the Small Business Regulatory Enforcement Fairness
Act of 1996 (5 U.S.C. 801 et seq.) (SBREFA), and has been transmitted
to Congress and the Comptroller General for review. This amendment to
the 1997 interim final regulations is not a major rule, as that term is
defined by 5 U.S.C. 804.
H. Federalism Statement
Executive Order 13132 (August 4, 1999) outlines fundamental
principles of federalism and requires the adherence to specific
criteria by federal agencies in the process of their formulation and
implementation of policies that have substantial direct effects on the
States, the relationship between the States, the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government. This
interim final amendment does not have federalism implications as it
only conforms the regulatory sunset date to the new statutory sunset
date added by H.R. 3061.
List of Subjects in 29 CFR part 2590
Employee benefit plans, Employee Retirement Income Security Act,
Health care, Health insurance, Medical child support, Reporting and
Pension and Welfare Benefits Administration
29 CFR part 2590 is amended as follows:
PART 2590--RULES AND REGULATIONS FOR HEALTH INSURANCE PORTABILITY
AND RENEWABILITY FOR GROUP HEALTH PLANS
1. The authority citation for Part 2590 is revised to read as
Authority: Secs. 107, 209, 505, 609, 701-703, 711-713, and 731-
734 of ERISA (29 U.S.C. 1027, 1059, 1135, 1169, 1181-1183, 1185,
1185a, 1185b, 1191, 1191a, 1191b, and 1191c), as amended by HIPAA
(Pub. L. 104-191, 110 Stat. 1936), MHPA (Pub. L. 104-204, 110 Stat.
2944, as amended by Pub. L. 107-116, 115 Stat. 2177), NMHPA (Pub. L.
104-204, 110 Stat. 2935), and WHCRA (Pub. L. 105-277, 112 Stat.
2681-436), section 101(g) of HIPAA, and Secretary of Labor's Order
No. 1-87, 52 FR 13139, April 21, 1987; section 401(b) of CPSIA (Pub.
L. 105-200, 112 Stat. 645).
2590.712 [Amended] (g)(2), and (i)
2. Amend Sec. 2590.712 (f)(1), (g)(2), and (i) to remove the date
``September 30, 2001'' and add in its place the date ``December 31,
Signed at Washington, DC this 17th day of September, 2002.
Ann L. Combs,
Assistant Secretary, Pension and Welfare Benefits Administration,
Department of Labor
[FR Doc. 02-24590 Filed 9-26-02; 8:45 am]
BILLING CODE 4510-29-P
Source document: 67 Fed. Reg. 60859-60861
(September 27, 2002)