The Mental Health Parity Act provides for greater equality in health insurance. If you are employed by an organization with 50 or more employees, this information should be very important to you.
Final regulations for the Mental Health Parity Act went into effect on April 5, 2010 and apply to health plan years that began on or after July 1, 2010.
To recap the new law, the Mental Health Parity Act does not require health plans to cover treatment for substance abuse or mental illness, but does require that plans which do include such benefits treat these conditions on par with other illnesses.
The rules explicitly state that parity applies across the board. This means that group health plans may not impose higher deductibles or caps on hospital room stays for mental health or substance abuse treatment. Nor can they impose more stringent preauthorization requirements for such treatment.
The rules specify that if a group health plan provides coverage for substance abuse and/or mental health services in any one or more of the following six categories, it must be on par with the medical and surgical benefits offered in that category.
- Inpatient in-network
- Inpatient out-of-network
- Outpatient in-network
- Outpatient out-of-network
- Emergency care
- Prescription drugs
The Mental Health Parity Act applies to both public and private group plans with 50 or more employees. It also applies to Medicaid managed-care plans, but does not cover Medicaid.
The Bottom Line
Your employer should review their plan documents to ensure that they comply with the new interim final rules. To the extent that plans decide now to drop their mental health or substance use disorder coverage, Summaries of Material Reduction must be provided, and revisions will need to be made to the Summary Plan Descriptions, benefit booklets, and other benefit communications.