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
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
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:
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.
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
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.)
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.
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.)
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
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
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