Understanding Mental Health Parity
What does the Parity Act guarantee?
The Mental Health Parity and Addiction Equity Act (MHPAEA )requires insurance groups that offer coverage for mental health or substance use disorders to provide the same level of benefits that they do for general medical treatment.
What does the final Parity rule include?
The final rule includes specific additional protections, such as:
- Ensuring that parity applies to intermediate levels of care received in residential treatment or intensive outpatient settings
- Clarifying the scope of the transparency required by health plans, including the disclosure rights of plan participants, to ensure compliance with the law
- Clarifying that parity applies to all plan standards, including geographic limits, facility-type limits and network adequacy
- Eliminating an exception to the existing parity rule that was determined to be confusing, unnecessary and open to abuse
The Mental Health Parity and Addiction Equity Act (MHPAEA) makes it easier for those Americans to get the care they need by prohibiting certain discriminatory practices that limit insurance coverage for behavioral health treatment and services.
Under Federal Parity Laws, who must provide equal coverage?
Federal parity laws apply to:
- Employer-funded plans with more than 50 insured employees
- Non-grandfathered employer-funded plans with 50 or fewer employees
- Individual market plans
- Medicaid managed-care programs
- CHIP (Children’s Health Insurance Program)
- Medicaid Alternative Benefit Plans and benchmark equivalent plans
ACA Extension of Parity Requirements
The Affordable Care Act (ACA) significantly extends the reach of MHPAEA's requirements. Starting in 2014, the ACA will require all small group and individual market plans created after March 23, 2010 to comply with federal parity requirements. Qualified Health Plans offered through the Health Insurance Marketplaces in every state must include coverage for mental health and substance use disorders as one of the ten categories of Essential Health Benefits, and that coverage must comply with the federal parity requirements set forth in MHPAEA.