Mental Health Parity Act [MHPA] Law and Legal Definition

The Mental Health Parity Act (MHPA) of 1996 prohibits the insurance companies, group health plans, and health maintenance organizations from establishing lifetime limits or annual limits on mental health. The Act applies to all the companies who employ more than 51 employees. The Act requires employers to provide coverage for diagnosis and medically necessary treatment of mental illness.

The applicability of the Act is exempted in case:

1. of substance abuse;

2. of chemical dependency;

3. of small employer; and

4. of increased cost.

The law ceases to be in force from 2001.