Today, tens of millions Americans suffer from some form of mental disorder, including but not limited to depression, anxiety, substance abuse issues, asocial or antisocial tendencies, and others. Mental health issues have become so widespread that many psychiatric professionals have likened it to an epidemic.
The Mental Health Parity Act, and its successor, the Mental Health Parity and Addiction Equity Act (MHPAEA) are the result of decades of shifting opinion in how we view the seriousness of psychological disorders and mental health. The MHPAEA requires – for certain qualified insurance plans – mental health/substance abuse coverage be at parity with medical/surgical coverage. In other words, a qualified insurance plan cannot make mental health and substance abuse coverage more difficult and more expensive to obtain than standard medical or surgical coverage. The law recognizes that mental health treatment was often limited in the past due to practices that made mental health coverage more restrictive.
What elements of coverage have to be at parity?
Qualified insurance plans have to guarantee that coverage is at parity for: co-pays, coinsurance, and out-of-pocket maximums, limits on the number of and length of covered inpatient/outpatient visits, out-of-network coverage, and medical necessity criteria (which is used to determine whether treatment will be paid for by insurance). At parity means that these insurance plans elements – for mental health and for medical treatment/surgery – are comparable. For example, a plan would not meet parity requirements if the length of inpatient visits covered by insurance were shorter for mental health treatment than for medical treatment.
Which plans are exempt from the MHPAEA parity requirements?
The following health insurance plans are presently exempt from MHPAEA parity requirements:
There are also two voluntary opt-out options: 1) purely self-insured employees may opt-out of a parity coverage plan, and 2) if an employer can demonstrate that implementation of the parity requirements has increased costs by over two percent in a year, or by at least one percent in the following years, then the employer can opt-out of the parity requirements.
Effects of the Affordable Care Act
The Affordable Care Act (ACA) has affected a number of aspects of MHPAEA, primarily by extending the parity requirements to apply to more plans. Before the ACA was implemented, small employer plans (businesses with less than 50 employees) were exempt from parity requirements. This exemption affected many millions of Americans working for small businesses. Furthermore, the parity requirements did not apply to plans that didn’t cover mental health or substance abuse. Thus, prior to the ACA, businesses could avoid expensive parity requirements by simply offering barebones insurance plans that didn’t include mental health or substance abuse coverage at all.
The ACA has made it so that small employer-funded plans are no longer exempt, with an exception for small employer plans created before March 23, 2010. It’s also no longer possible for insurance plans to leave out mental health coverage altogether. Under the ACA, mental health is now one of the ‘essential health benefits,’ so any non-exempt insurance plan must come with mental health and substance abuse coverage, and this coverage must meet parity requirements.
State Parity Laws
The MHPAEA parity requirements are federal requirements. State parity laws can be stricter about enforcing parity, and some are. For example, New York has one of the stricter parity laws among the states. Not only does the parity law demand a minimum of 30 days inpatient and 20 days outpatient treatment for mental health, the law also explicitly defines those illnesses that must be fully covered by insurance, including schizophrenia, major depression, bipolar, delusion, panic disorders, obsessive compulsive disorders, bulimia, anorexia, and binge eating, among others.
Defining the illnesses that must be covered is a way of getting around the medical necessity criteria that insurance companies frequently use to escape having to pay for treatment. For example, because major depression now falls under medical necessity in New York, an insurance plan (with mental health coverage) cannot avoid paying for major depression treatment by arguing that it’s not a medical necessity.
If you believe that your insurance plan is not offering comparable mental health and substance abuse benefits, and that this may be in violation of either the MHPAEA or State law, please contact a qualified local healthcare attorney for help.