Internal Revenue Code:Sec. 9812. Parity in the application of certain limits to mental health benefits

From TaxAlmanac

Location in Internal Revenue Code

     TITLE 26 - INTERNAL REVENUE CODE
      Subtitle K - Group Health Plan Requirements
       CHAPTER 100 - GROUP HEALTH PLAN REQUIREMENTS
        Subchapter B - Other Requirements
      

Statute

    Sec. 9812. Parity in the application of certain limits to mental
        health benefits
 
    (a) In general
      (1) Aggregate lifetime limits
        In the case of a group health plan that provides both medical
      and surgical benefits and mental health benefits -
        (A) No lifetime limit
          If the plan does not include an aggregate lifetime limit on
        substantially all medical and surgical benefits, the plan may
        not impose any aggregate lifetime limit on mental health
        benefits.
        (B) Lifetime limit
          If the plan includes an aggregate lifetime limit on
        substantially all medical and surgical benefits (in this
        paragraph referred to as the ''applicable lifetime limit''),
        the plan shall either -
            (i) apply the applicable lifetime limit both to the medical
          and surgical benefits to which it otherwise would apply and
          to mental health benefits and not distinguish in the
          application of such limit between such medical and surgical
          benefits and mental health benefits; or
            (ii) not include any aggregate lifetime limit on mental
          health benefits that is less than the applicable lifetime
          limit.
        (C) Rule in case of different limits
          In the case of a plan that is not described in subparagraph
        (A) or (B) and that includes no or different aggregate lifetime
        limits on different categories of medical and surgical
        benefits, the Secretary shall establish rules under which
        subparagraph (B) is applied to such plan with respect to mental
        health benefits by substituting for the applicable lifetime
        limit an average aggregate lifetime limit that is computed
        taking into account the weighted average of the aggregate
        lifetime limits applicable to such categories.
      (2) Annual limits
        In the case of a group health plan that provides both medical
      and surgical benefits and mental health benefits -
        (A) No annual limit
          If the plan does not include an annual limit on substantially
        all medical and surgical benefits, the plan may not impose any
        annual limit on mental health benefits.
        (B) Annual limit
          If the plan includes an annual limit on substantially all
        medical and surgical benefits (in this paragraph referred to as
        the ''applicable annual limit''), the plan shall either -
            (i) apply the applicable annual limit both to medical and
          surgical benefits to which it otherwise would apply and to
          mental health benefits and not distinguish in the application
          of such limit between such medical and surgical benefits and
          mental health benefits; or
            (ii) not include any annual limit on mental health benefits
          that is less than the applicable annual limit.
        (C) Rule in case of different limits
          In the case of a plan that is not described in subparagraph
        (A) or (B) and that includes no or different annual limits on
        different categories of medical and surgical benefits, the
        Secretary shall establish rules under which subparagraph (B) is
        applied to such plan with respect to mental health benefits by
        substituting for the applicable annual limit an average annual
        limit that is computed taking into account the weighted average
        of the annual limits applicable to such categories.
    (b) Construction
      Nothing in this section shall be construed -
        (1) as requiring a group health plan to provide any mental
      health benefits; or
        (2) in the case of a group health plan that provides mental
      health benefits, as affecting the terms and conditions (including
      cost sharing, limits on numbers of visits or days of coverage,
      and requirements relating to medical necessity) relating to the
      amount, duration, or scope of mental health benefits under the
      plan, except as specifically provided in subsection (a) (in
      regard to parity in the imposition of aggregate lifetime limits
      and annual limits for mental health benefits).
    (c) Exemptions
      (1) Small employer exemption
        This section shall not apply to any group health plan for any
      plan year of a small employer (as defined in section
      4980D(d)(2)).
      (2) Increased cost exemption
        This section shall not apply with respect to a group health
      plan if the application of this section to such plan results in
      an increase in the cost under the plan of at least 1 percent.
    (d) Separate application to each option offered
      In the case of a group health plan that offers a participant or
    beneficiary two or more benefit package options under the plan, the
    requirements of this section shall be applied separately with
    respect to each such option.
    (e) Definitions
      For purposes of this section:
      (1) Aggregate lifetime limit
        The term ''aggregate lifetime limit'' means, with respect to
      benefits under a group health plan, a dollar limitation on the
      total amount that may be paid with respect to such benefits under
      the plan with respect to an individual or other coverage unit.
      (2) Annual limit
        The term ''annual limit'' means, with respect to benefits under
      a group health plan, a dollar limitation on the total amount of
      benefits that may be paid with respect to such benefits in a
      12-month period under the plan with respect to an individual or
      other coverage unit.
      (3) Medical or surgical benefits
        The term ''medical or surgical benefits'' means benefits with
      respect to medical or surgical services, as defined under the
      terms of the plan, but does not include mental health benefits.
      (4) Mental health benefits
        The term ''mental health benefits'' means benefits with respect
      to mental health services, as defined under the terms of the
      plan, but does not include benefits with respect to treatment of
      substance abuse or chemical dependency.
    (f) Application of Section.--This section shall not apply to 
      benefits for services furnished--
       (1) on or after September 30, 2001, and before January 10, 
        2002, 
       (2) on or after January 1, 2004, and before the date of 
        the enactment of the Working Families Tax Relief Act of 2004, 
        and
       (3) after December 31, 2007.
. 

Sources

    (Added Pub. L. 105-34, title XV, Sec. 1531(a)(4), Aug. 5, 1997, 111
    Stat. 1083; amended Pub. L. 107-116, title VII, Sec. 701(c), Jan.
    10, 2002, 115 Stat. 2228.)
 

Miscellaneous

                                 AMENDMENTS
      2004 - Subsec.302(a),Pub.L.108-311, amended Sec.9812(f)
    by subtituting a new (f)(2)and adding (f)(3).  Effective Dates.-- 
    The amendments made by this section shall take effect on the 
    date of the enactment of this Act.
      2002 - Subsec. 610(a), Pub. L. 107-147, as amended by the DOL, 
    Health and Human Services, and Education, and Related Agencies
    Appropriations Act of 2002, amended Sec. 9812(f) as follows:
    ``(f) Application of Section.--This section shall not apply to 
       benefits for services furnished--
     ``(1) on or after September 30, 2001, and before January 10, 
        2002, and
        ``(2) after December 31, 2003.''.
    This Amendment shall apply to plan years beginning after
    December 31, 2000.
        
      2002 - Subsec. (f). Pub. L. 107-116 substituted ''December 31,
    2002'' for ''September 30, 2001''.