Congress Passes Mental Health Parity Protection, HRA Help  

Congress has passed legislation to increase enforcement of mental health and substance abuse parity rules and require health plans to apply parity standards to eating disorder benefits as part of a sweeping bill intended to spur development of new drugs and medical devices. The 21st Century Cures Act also includes provisions to let small employers use health reimbursement accounts (HRAs) to cover employees' costs for individual-market health insurance on a tax-free basis. The measure is expected to be signed into law by President Obama.

One part of the bill's mental health reforms focuses on the Mental Health Parity and Addiction Equity Act (MHPAEA). It directs regulators to come up with an "action plan" within six months of the bill’s enactment for improved federal and state coordination of enforcement of mental health parity and addiction equity requirements. The bill also seeks better compliance through clearer, more helpful guidance for employers and insurers. 

Increasing public awareness of eating disorders is a key focus of the mental health reforms, and the bill mandates that parity standards apply to any eating disorder benefits, including residential treatment, covered by a group health plan.

The bill also would require HHS to clarify when it is appropriate for caregivers to share with others protected information about a patient's mental health or substance use disorder.

HRAs funded by small employers could cover employees' costs for individual-market health insurance on a tax-free basis under provisions in the bill. The provisions would apply to companies exempt from the Affordable Care Act (ACA)'s shared-responsibility provisions -- that is, employers with fewer than 50 full-time and full-time equivalent employees.

Under the Cures Act, only small employers not offering other group health plan coverage could reimburse health insurance costs through stand-alone HRAs. An employer's HRA contributions would reduce the relevant premium cost used to determine if an employee qualifies for any federal subsidies to buy coverage through a public exchange. Like other HRAs, small-employer HRAs could also reimburse qualified out-of-pocket medical expenses incurred by employees or their family members. Annually adjusted limits -- initially $4,950 for individuals and $10,000 for families -- would apply to small-employer HRA payments excluded from income.