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Answers to important questions about the new federal parity law

 "Checking up on a new patientís coverage the other day, I was told that her mental health benefits for 2010 were a max of 10 sessions with a 50% co-pay. For med/surg, there is no session limit, and just a 20% co-pay. This patient works for a big company--with a lot more than 50 employees. Arenít they breaking the new parity law which took effect on January 1?

 No, they arenít. But there seems to be a lot of confusion about this--and not just among therapists. First, the new federal parity law--while technically in effect since January 1--doesnít impact any health plan yet. The new regs kick in with new plan years beginning July 1. After that, this provider would be correct: Co-pays would have to be equal, and unequal session limits would have to be eliminated. Thatís the intent of the law.

Of course, until we see how employers and managed care companies implement parity, we canít be sure how everything will shake out. But after years of wrangling over the rules for implementing the Mental Health Parity and Addiction Act of 2008, the framework is now in place.

Below, we explore some of the other important questions clinicians are asking about parity:

l What will be covered? All mental health and substance abuse conditions that are included in an insurance plan are covered. That means they are regulated by the same co-pays, annual and lifetime limits, and other rules that apply to med/surg. However, the law does not have requirements about which specific behavioral health conditions are covered. So theoretically at least, a plan could reduce the number of conditions covered, or eliminate mental health and substance abuse treatment altogether.

l Is that July 1 date hard and fast, or could there be other delays? That date looks firm. The three federal departments involved with setting the regulations for the law (HHS, Labor, and Treasury) have asked for comments on the new regs. But itís not expected that any major changes will be made before the end of the comment period on May 3.

l What kinds of health plans are covered? Plans from employers with 51 or more workers are included. This applies to both regular insurance plans and "self-insured" plans used by most large companies. (Most self-insured plans have been exempt from state parity laws.)

l Is there any way to opt out of parity rules? Other than dumping mental health and substance abuse altogether--which big companies wonít want to do--thereís only one loophole. After running a plan with parity for at least six months, they can try to prove that parity is creating excessive costs. "Excessive" is defined as a 2% increase in overall insurance costs the first year, and at least 1% in annual increases in subsequent years. Experience with state parity laws indicates that this will be a tough case to make.

(Actually, increases of that size are virtually impossible. Remember that behavioral health now accounts for 2% or less of overall health insurance costs. So to cross the threshold, mental health costs would literally have to double.)                                                    

l Will the law affect out-of-network benefits? Yes. It eliminates higher co-pays, treatment limits, and other restrictions that have hampered patients who want to go out-of-network for mental health treatment.

l What about plans that use EAPs as mental health gatekeepers? If they donít force med/surg patients to enter the system through an EAP, they canít use the process for mental health and substance abuse either. The same reg would seem to rule out plans that require members to use all possible EAP services before being able to access other providers.

l Does the health reform law passed by Congress in March affect parity? Nothing weíve seen so far indicates that it does. But thereís no way to predict what new health insurance plans will be like when they are set up four years from now, when much of the reform law actually takes effect.

One major effect of the new law does seem clear, though: People canít be rejected for health insurance on the basis of a prior mental health condition. And that provision will probably be in effect within a few months.

Look for further parity updates as the year unfolds.


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