Buck Bond Group

Backgrounder: Mental Health Parity Act

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 Mental Health awareness is recognized in May in numerous countries, e.g. the US, UK, Canada and Australia all have different mental health communications efforts during the month. This post provides some background on mental health coverage issues in the US, both historic and current.

Historically in the US, insurers and group health plans either didn’t cover mental health treatment at all or imposed lifetime or annual dollar limits on mental health benefits, limits that didn’t apply to available medical/surgical treatment coverage.

But that changed for the better in 1998, when the Mental Health Parity Act of 1996 became effective The Act prohibited, generally, insurers and group health plans from imposing annual or lifetime dollar limits on mental health coverage.

Unfortunately, many insurers and plans subsequently replaced dollar limits with limits on the number of inpatient care days or out-patient visits allowed. These restrictions were problematic for those with mental health conditions, and it was not the standard of care for other medical conditions.

Twelve years later, the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) was enacted, requiring both health insurers and group health plans that cover mental health and substance abuse treatment services to provide the same level of benefits for mental and/or substance use as the treatment and services offered for medical/surgical care. This Act required parity in quantitative limits– such as co-pay amounts, number of visits covered, etc. It also required qualitative parity, such as similar standards for determining medical necessity and coverage of a variety of treatment facilities.

As a result, individuals with mental health needs covered by these plans types experienced increased benefits, but the requirement did not apply to small group health plans and individual market plans until after the Affordable Care Act extended MHPAEA parity standard, affecting plans created after March 23, 2010.

Currently, Qualified Health Plans offered through the public marketplace in every state must include coverage for mental and/or substance use disorders that complies with MHPAEA requirements.

For more information about Mental Health Awareness efforts this week and throughout the month of May, we direct you to: http://www.mentalhealthamerica.net/may and http://mentalhealth.org.uk/our-work/mentalhealthawarenessweek.