Volume 7 Number 1 January 1, 2010

Sean M. ShawWhat is mental health parity and when does it begin?

By Sean M. Shaw, Esq., Florida Insurance Consumer Advocate

For several years, professionals and advocates in the mental health and substance abuse community have championed changes in the way insurance companies administer these benefits. Their efforts were rewarded in 2008 when the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity ActOffice of the Insurance Consumer Advocate passed Congress and was signed into law by President Bush on October 3, 2008. Congress delayed the effective date of this new law until January of 2010 in order to give health plans time to implement the changes. This new law expands on the limited Mental Health Parity Act of 1996.

The Mental Health Parity and Addiction Equity Act amends the Employee Retirement Income Security Act (ERISA) and the Public Health Service Act to prohibit employers’ health plans from imposing any caps or limitations on mental health treatment or substance abuse benefits that aren’t currently applied to medical and surgical benefits. This law requires that insurers treat mental health and substance abuse benefits the same as medical-surgical benefits.

Unfortunately, this act does not require health insurance plans to offer mental health and substance abuse coverage. However, those plans that do offer these benefits are required to do so in an equitable fashion. Additionally, the new law applies primarily to large group plans, those with 51 employees or more. For large group health plans that include mental health and substance abuse disorder benefits, the Act does require parity with medical - surgical benefits. The new law will allow plans that provide mental health and substance abuse benefits to be exempt from the federal law if it can demonstrate actuarially that implementing parity has increased costs by more than two percent in the first year or one percent in subsequent years. Continued

Under the provisions of this act, plans are prevented from placing limits on the number of visits along with a fixed dollar limit per visit unless such limits are similarly placed on medical – surgical coverage in the same manner. The application of benefits must be no more restrictive than the financial requirements or treatment limitations that apply to substantially all medical - surgical benefits. The act also establishes an oversight mechanism to determine if insurers are discriminating against certain conditions or failing to cover certain treatments. Another important change is that if a plan offers out of network benefits for medical-surgical care, they must also offer out of network benefits for mental health and addiction treatment.

Since current statutes do not apply to small group plans, those groups of 50 or less, individual states must pass their own mental health substance abuse legislation for such groups. To remedy this situation, legislation is under consideration for the 2010 Legislative Session of the Florida Legislature. The proposed bill would increase the current minimum of 30 days for inpatient benefits with $1,000 outpatient benefits per year, to 45 days inpatient and 60 visits outpatient per year and strengthen small group mental health and substance abuse law.

Health plans of all sizes often subcontract with firms to monitor and review mental health and substance abuse benefits and companies may require consumers to contact the subcontracted firm for approval prior to beginning any treatment. Most health plans reserve the right in their contracts to determine medical necessity as it relates to being a covered service - not your treating physician. The health plan, not your doctor, determines whether or not the prescribed treatment will be paid for by your plan. Thus, consumers should be prepared to pay for unapproved or unauthorized services.

For more information on mental health parity you may contact the Department of Financial Services, Division of Consumer Services at 1-877-693-5236. Also, be sure to read your Certificate of Coverage from your insurance plan so that you understand the coverage that you have.

The Insurance Consumer Advocate is appointed by Florida Chief Financial Officer Alex Sink and is committed to finding solutions to insurance issues facing Floridians, calling attention to questionable insurance practices, promoting a viable insurance market responsive to the needs of Florida’s diverse population and assuring that rates are fair and justified.