[Federal Register Volume 67, Number 188 (Friday, September 27, 2002)]
[Rules and Regulations]
[Pages 60859-60861]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-24590]


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DEPARTMENT OF LABOR

Pension and Welfare Benefits Administration

29 CFR Part 2590

RIN 1210-AA62


Interim Final Amendment for Mental Health Parity

AGENCY: Pension and Welfare Benefits Administration, Department of 
Labor.

ACTION: Interim final amendment to regulation.

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SUMMARY: This document contains an interim final amendment to modify 
the sunset date of interim final regulations under the Mental Health 
Parity Act

[[Page 60860]]

(MHPA) to be consistent with legislation passed during the 107th 
Congress.

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).

SUPPLEMENTARY INFORMATION:

A. Background

    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:
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    \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.
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    [sbull] 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.
    [sbull] 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 
Code.
    [sbull] 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 
sunset date.
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    \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.
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    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

[[Page 60861]]

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. 
3061.

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 
recordkeeping requirements.

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 
follows:

    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, 
2002''.

    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