SECTION 21.2407. Parity Requirements with Respect to Aggregate Lifetime and Annual Dollar Limits

This section details application of the parity requirements under this subchapter with respect to aggregate lifetime and annual dollar limits that may be permitted by state or federal law.

(1) General parity requirement. A health benefit plan that provides both medical/surgical benefits and MH/SUD benefits must comply with paragraph (2), (3), or (5) of this section, as applicable.

(2) Plan with no limit or limits on less than one-third of all medical/surgical benefits. If a health benefit plan does not include an aggregate lifetime or annual dollar limit on any medical/surgical benefits or includes an aggregate lifetime or dollar limit that applies to less than one-third of all medical/surgical benefits, it may not impose an aggregate lifetime or annual dollar limit, respectively, on mental health or substance use disorder benefits.

(3) Plan with a limit on at least two-thirds of all medical/surgical benefits. If a health benefit plan includes an aggregate lifetime or annual dollar limit on at least two-thirds of all medical/surgical benefits, it must either:

(A) apply the aggregate lifetime or annual dollar limit both to the medical/surgical benefits to which the limit would otherwise apply and to MH/SUD benefits in a manner that does not distinguish between the medical/surgical benefits and MH/SUD benefits; or

(B) not include an aggregate lifetime or annual dollar limit on mental health or substance use disorder benefits that is less than the aggregate lifetime or annual dollar limit, respectively, on medical/surgical benefits. (Some cumulative financial requirements and cumulative quantitative treatment limitations other than aggregate lifetime or annual dollar limits are prohibited in §21.2408 of this title (relating to Parity Requirements with Respect to Financial Requirements and Treatment Limitations).)

(4) Determining one-third and two-thirds of all medical/surgical benefits. For purposes of this section, the determination of whether the portion of medical/surgical benefits subject to an aggregate lifetime or annual dollar limit represents one-third or two-thirds of all medical/surgical benefits is based on the dollar amount of all plan payments for medical/surgical benefits expected to be paid under the plan for the plan year (or for the portion of the plan year after a change in plan benefits that affects the applicability of the aggregate lifetime or annual dollar limits). Any reasonable method may be used to determine whether the dollar amount expected to be paid under the plan will constitute one-third or two-thirds of the dollar amount of all plan payments for medical/surgical benefits.

(5) Plan not described in paragraph (2) or (3) of this section.

(A) In general. A health benefit plan that is not described in paragraph (2) or (3) of this section with respect to aggregate lifetime or annual dollar limits on medical/surgical benefits, must either:

(i) impose no aggregate lifetime or annual dollar limit, as appropriate, on mental health or substance use disorder benefits; or

(ii) impose an aggregate lifetime or annual dollar limit on mental health or substance use disorder benefits that is no less than an average limit calculated for medical/surgical benefits in the following manner. The average limit is calculated by taking into account the weighted average of the aggregate lifetime or annual dollar limits, as appropriate, that are applicable to the categories of medical/surgical benefits. Limits based on delivery systems, such as inpatient/outpatient treatment or normal treatment of common, low-cost conditions (such as treatment of normal births), do not constitute categories for purposes of this clause. In addition, for purposes of determining weighted averages, any benefits that are not within a category that is subject to a separately designated dollar limit under the plan are taken into account as a single separate category by using an estimate of the upper limit on the dollar amount that a plan may reasonably be expected to incur with respect to such benefits, taking into account any other applicable restrictions under the plan.

(B) Weighting. For purposes of this paragraph, the weighting applicable to any category of medical/surgical benefits is determined in the manner set forth in paragraph (4) of this section for determining one-third or two-thirds of all medical/surgical benefits.

Source Note: The provisions of this §21.2407 adopted to be effective September 7, 2021, 46 TexReg 5571