Mental Health (non) Parity LawIn 1996 the Mental Health Parity Act was passed to strengthen mental health coverage under employee benefit plans. Yet, anyone who has received mental health benefits through a health insurance plan knows that those benefits are not on par with other types of health coverage. Separate deductibles, co-payments, limitations on the number of visits and caps on the overall amount of mental health benefits are the norm. Parity may not accurately describe the coverage you receive for mental health care today. In an attempt to strengthen the 1996 law, Congress passed the Mental Health Parity and Addiction Equity Act of 2008. The 2008 legislation was intended to end the inequity between mental health and substance use disorder benefits and medical and surgical benefits for group health plans. Although some health plans may already be operating under the new rules, the new law does not go into effect until January 1, 2010. The new law expands the equitable coverage requirements to apply to deductibles, co-payments, coinsurance, out-of-pocket costs and to all treatment limitations including frequency of treatment, number of visits and days of coverage. Despite the new legislation, it is unclear whether or not mental health coverage will noticeably improve for many Americans. Unfortunately, the law has a few shortcomings that will hinder expansion of mental health benefits to many Americans. At this time, no health plan is required to offer mental health coverage. The mental health parity law only applies to health plans that voluntarily elect to include mental health coverage. Plans Exempt from the New Legislation: The following health plans are exempt from the new legislation. Collectively, listed plans also make up the only area of growth within the health insurance industry.
· Small employer health plans (50 or fewer employees)
· Supplemental health insurance
· Short term insurance
· International insurance
· Limited benefit health insurance
· Mini-med health insuranceAdditional Drawbacks of the Mental Health Parity and Addiction Equity Act of 2008 The new legislation may also fall short because treatment must be determined medically necessary under the health plan's criteria, rather than under the standards of care within the mental health profession. The federal mental health parity law does not apply in states that have a similar state law, which may be a drawback for those who need additional coverage because state laws tend to be weaker than the new federal law. Large employer-paid health plans are increasingly moving toward high deductible catastrophic insurance. This insurance is often combined with employee-funded Health Savings Accounts (HSA). For these plans, no insurance coverage is provided for ordinary health care expenses that total under $5,000 per year. Since the combined total of all mental health care expenses plus all other medical costs does not typically meet the high annual deductible for most, the new mental health parity law would have no realized effect. If group health plan claims increase by more than 1% as a result of the mental health parity requirement, the plan is exempt from the law in the following plan year. This provision was inserted into the bill to gain enough political support to get the law passed in last year's Congress. For all of these reasons, we believe that most people are unlikely to notice any improvement in outpatient mental health coverage in 2010. Tags : health insurance