(a) In general
(1) Aggregate lifetime limits In the case of a group health plan (or health insurance coverage offered in connection with such a plan) that provides both medical and surgical benefits and mental health benefits—
(A) No lifetime limit If the plan or coverage does not include an aggregate lifetime limit on substantially all medical and surgical benefits, the plan or coverage may not impose any aggregate lifetime limit on mental health benefits.
(B) Lifetime limit If the plan or coverage includes an aggregate lifetime limit on substantially all medical and surgical benefits (in this paragraph referred to as the “applicable lifetime limit”), the plan or coverage 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 or coverage 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 or coverage 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 (or health insurance coverage offered in connection with such a plan) that provides both medical and surgical benefits and mental health benefits—
(A) No annual limit If the plan or coverage does not include an annual limit on substantially all medical and surgical benefits, the plan or coverage may not impose any annual limit on mental health benefits.
(B) Annual limit If the plan or coverage includes an annual limit on substantially all medical and surgical benefits (in this paragraph referred to as the “applicable annual limit”), the plan or coverage 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 or coverage 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 or coverage 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 (or health insurance coverage offered in connection with such a plan) to provide any mental health benefits; or
(2) in the case of a group health plan (or health insurance coverage offered in connection with such a 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 or coverage, except as specifically provided in subsection (a) of this section (in regard to parity in the imposition of aggregate lifetime limits and annual limits for mental health benefits).
(c) Exemptions
(1) Small employer exemption
(A) In general This section shall not apply to any group health plan (and group health insurance coverage offered in connection with a group health plan) for any plan year of a small employer.
(B) Small employer For purposes of subparagraph (A), the term “small employer” means, in connection with a group health plan with respect to a calendar year and a plan year, 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.
(C) Application of certain rules in determination of employer size For purposes of this paragraph—
(i) Application of aggregation rule for employers Rules similar to the rules under subsections (b), (c), (m), and (
o) of
section 414 of title 26 shall apply for purposes of treating persons as a single employer.
(ii) Employers not in existence in preceding year In the case of an employer which was not in existence throughout the preceding calendar year, the determination of whether such employer is a small employer shall be based on the average number of employees that it is reasonably expected such employer will employ on business days in the current calendar year.
(iii) Predecessors Any reference in this paragraph to an employer shall include a reference to any predecessor of such employer.
(2) Increased cost exemption This section shall not apply with respect to a group health plan (or health insurance coverage offered in connection with a group health plan) if the application of this section to such plan (or to such coverage) results in an increase in the cost under the plan (or for such coverage) 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 or health insurance coverage, a dollar limitation on the total amount that may be paid with respect to such benefits under the plan or health insurance coverage 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 or health insurance coverage, 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 or health insurance coverage 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 or coverage (as the case may be), 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 or coverage (as the case may be), but does not include benefits with respect to treatment of substance abuse or chemical dependency.
(f) Sunset This section shall not apply to benefits for services furnished on or after September 30, 2001.
Source credit, amendments & notes
(Pub. L. 93–406, title I, §712, as added Pub. L. 104–204, title VII, §702(a), Sept. 26, 1996, 110 Stat. 2944.)
Effective Date
Section 702(c) of Pub. L. 104–204 provided that: “The amendments made by this section [enacting this section] shall apply with respect to group health plans for plan years beginning on or after January 1, 1998.”
ERISA § 712 (29 U.S.C. § 1185a) — Parity in mental health and substance use disorder benefits · USC 1996 ed., current through 1997-01-06 · https://pensionresource.website/EAMain?content=EAMain.Law&id=usc29-1185a&asof=1997-01-06 · printed Oct 16, 2026