Mental Health care insurance

The federal parity law requires insurance companies to treat mental and behavioral health and substance use disorder coverage equal to (or better than) medical/surgical coverage. That means that insurers must treat financial requirements equally. For example, an insurance company can't charge a $40 copay for office visits to a mental health professional such as a psychologist if it only charges a $20 copay for most medical/surgical office visits. The parity law also covers non-financial treatment limits. For instance, limits on the number of mental health visits allowed in a year were once common. The law has essentially eliminated such annual limits. However, it does not prohibit the insurance company from implementing limits related to “medical necessity.”

What health plans does the law affect?

The federal parity law generally applies to the following types of health insurance:

• Employer-sponsored health coverage, for companies with 50 or more employees.
• Coverage purchased through health insurance exchanges that were created under the health care reform law also known as the Affordable Care Act or “Obamacare.”
• Children's Health Insurance Program (CHIP).
• Most Medicaid programs. (Requirements may vary from program to program. Contact your state Medicaid director if you are not sure whether the federal parity law applies to your Medicaid program.)

Some other government plans and programs remain exempt from the parity law. Medicare, unlike Medicaid, for instance, is not subject to the federal parity law. And some state government employee plans (including ones that cover teachers and employees of state universities, for instance) may opt out of the parity requirements.

How do I know if my health insurance plan provides mental health coverage?

Check your description of plan benefits — it should include information on behavioral health services or coverage for mental health and substance-use disorders. If you still aren't sure, ask your human resources representative or contact your insurance company directly.

My insurance plan doesn't have mental health benefits. Is that a violation of the parity law?

The parity law does not require insurers to provide mental health benefits — rather, the law states that if mental health benefits are offered, they can't have more restrictive requirements than those that apply to physical health benefits. Fortunately, the vast majority of large group plans already provided mental health benefits before the parity law took effect. In addition, the Affordable Care Act requires that plans offered through the health insurance exchanges cover services for mental health and substance-use disorders.

Are all mental health diagnoses covered by the parity law?

Unlike some state parity laws, the federal parity law applies to all mental health and substance-use disorder diagnoses covered by a health plan. However, a health plan is allowed to specifically exclude certain diagnoses — whether those diagnoses are considered to be in the physical/medical realm or behavioral/mental health. Any exclusions should be made clear to you in your plan's description of mental health benefits. If you are uncertain ask your insurance company.

My insurance company won't reimburse me for a therapy visit because I haven't met my deductible. Is that a violation of the parity law?

A deductible is the overall amount that you must pay out of your own pocket per year before your health insurance makes any payments. Depending on your plan's deductible, for instance, you may have to pay $500, or even $5, 000, out of pocket before your insurance company will pay any claims. Prior to the parity law, many insurance plans required patients to meet different and often higher deductibles for mental health services than for medical services. As a result of the law, a single deductible now applies to both mental health treatment and medical services. In some cases, your plan may pay for mental health treatment after you have paid part of your deductible but not cover physical health treatment until you have reached the full deductible.

My copay is $20 when I see my psychologist, but only $10 when I visit my primary care physician. Isn't that against the law?

Not necessarily. The parity law requires copays for mental health services to be equal to or less than the copay for most — not all — medical/surgical services. In this case, for example, it's acceptable to pay a $20 copay for a mental health visit and a $10 copay for a primary care visit, as long as your copay is $20 or more for most of the medical/surgical services covered by your plan.

My insurance company has only approved a certain number of therapy sessions to treat my disorder. Is this a violation of the parity law?

The parity law prevents insurers from putting a firm annual limit on the number of mental health sessions that are covered. However, insurance companies can still manage your care. Your plan may say, for example, that after 10 or 20 appointments with a psychologist, they will evaluate your case to determine whether additional treatment is “medically necessary” according to their criteria. This kind of management is generally permissible under the parity law if the company uses the same standards for determining mental health coverage as they use to decide what medical services to cover. But if the company terminates or reduces care much sooner than your psychologist thinks is appropriate, that could indicate a possible violation of the parity law.