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What is the “Mental Health Parity and Addiction Equity Act” and how does it affect me?


What is parity?
 
Parity is equal or fair treatment. The FAQs below outline how the idea of parity is applied to mental health coverage by the Mental Health Parity and Addiction Equity Act. After reading the information provided here, if you still have questions about parity and how it applies to you, please visit our Consumer Services Bureau or call their hotline at 1-877-881-6388.
 
What is the Mental Health Parity and Addiction Equity Act?
The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) is a federal law that requires the same health insurance coverage for mental health and/or substance use disorder (MH/SUD) conditions as patients would receive for coverage of medical/surgical (M/S) services. This law was adopted into Pennsylvania law in 2010. Historically, health care coverage for MH/SUD treatment was not the same as coverage for M/S conditions. For example, if coverage for mental health services was provided, often there were limits on the number of visits and higher out-of-pocket costs than the same coverage for medical and surgical services. The MHPAEA changed this requirement. Parity (which means equal or fair treatment) requires insurance companies to administer MH/SUD benefits in the same way as they administer M/S benefits: both the quantitative limits, such as the visit limits or deductibles, as well as the qualitative limits, such as prior authorization requirements and network criteria, must be parallel. 
 
Are insurance plans required to offer mental health and substance abuse treatment?
It depends. Pennsylvania has a law, referred to as Act 106, which requires minimum coverage for alcohol and substance abuse treatment. See the FAQ on Act 106 below for more information. Beyond Act 106, MHPAEA itself does not mandate insurance plans to offer mental health or substance abuse treatment benefits. However, under the Affordable Care Act, individual and small group plans must offer MH/SUD benefits. Large group plans or self-funded plans are not required to offer MH/SUD benefits, but if one of these plans does offer this coverage, the MH/SUD benefits must parallel the M/S coverage.
 
Does the MHPAEA Apply to Me?
MHPAEA applies to persons enrolled in:
  • Individual and small group health plans sold in the commercial market beginning after January 1, 2014, as required by the Affordable Care Act (ACA).
  • Insurance plans issued by your employer, if your employer has more than 50 employees, including self-insured as well as fully insured arrangements, if the plan covers MH/SUD.
  • CHIP and certain Medicaid plans (proposed rules regarding how MHPAEA applies to these plans are pending).
What do these plans cover?
The MHPAEA prohibits health plans from providing MH/SUD benefits that are more restrictive than the M/S benefits they offer, with respect to the following coverage features:
  • What you pay: Copays, coinsurance, deductibles, and out-of-pocket maximums;
  • How much treatment you can get: Limitations on services utilization, such as limits on the number of inpatient or outpatient visits that are covered;
  • The use of management tools, such as pre-authorization requirements;
  • Which doctors you can see: coverage for out-of-network providers;
  • The criteria the insurance company uses to determine what is considered medically necessary treatment.
How does MHPAEA interact with Pennsylvania Requirements under Act 106?
Pennsylvania’s alcohol and substance use treatment mandate law, known as Act 106, mandates certain minimum benefits. The Act 106 mandate is triggered if fewer days or treatment sessions are covered by your plan or as required by the parity law, whether you have a large or small group health insurance plan. (Act 106 does not apply to individual plans or to self-funded coverage.)
However, Act 106 only requires a minimum level of benefits. If your plan offers M/S benefits that are more generous than the MH/SUD benefits mandated by Act 106, you will be entitled to more generous MH/SUD benefits because the parity law says they must still be parallel to those M/S benefits. For example, Act 106 mandates coverage of 30 outpatient sessions for MH/SUD services. If your plan covers 60 days of outpatient sessions for M/S services, the parity law would require that plan to also cover 60 outpatient sessions for MH/SUD services.
 
What is typically covered under Act 106?
  • Up to seven days of detoxification per admission; four admissions per lifetime (hospital or non-hospital inpatient detoxification);
  • A minimum of 30 days of residential treatment services per year; 90 days per lifetime (non-hospital residential);
  • Minimum of 30 sessions of outpatient/partial hospitalization services per year; 120 sessions per lifetime (outpatient/partial hospitalization)
  • Family counseling and intervention services;
  • 30 additional outpatient/partial hospitalization sessions, which may be exchanged on a two-to-one basis to provide 15 additional non-hospital, residential treatment days, are also available.
These numbers of days or sessions would have to be covered in Pennsylvania, even if the parity law provides fewer days or sessions of coverage. As an example, consider someone needing outpatient alcohol treatment. If the person’s group plan limited outpatient treatment for medical/surgical reasons to 20 sessions per year, then under the parity law that plan could have an equivalent 20 session limit on substance use disorder outpatient treatment. However, because of , Act 106, that person would be covered for 30 sessions of outpatient treatment per year.
 
Where can I learn more?
Remember, parity in coverage for mental health and substance use disorder benefits with medical and surgical benefits is the law! If you have questions about this, visit our Consumer Services Bureau or call their hotline at 1-877-881-6388.
 
To learn more, these additional websites also provide information about Mental Health Parity: