Insurance Parity

Parity refers to legislation intended to end insurance and Medicaid discrimination for individuals needing coverage for a mental health (MH) or substance use disorder (SUD). The legislation ensures that coverage for patients with MH/SUD is on par with medical and surgical (M/S) conditions.

• The Mental Health Parity and Addiction Equity Act of 2008 (Parity Act): Requires large employers that offer health insurance that includes MH/SUD benefits to provide coverage that is on par with coverage for M/S conditions. The Parity Act does not mandate that a plan provide MH/SUD benefits. But if a large employer’s commercial (fully insured) or self-insured health plan does provide MH/SUD benefits, then it must follow parity standards.
• The Affordable Care Act (ACA) also referred to as ‘Obamacare’ (2010): Requires all individual and small group health plans sold in the commercial market to provide MH/SUD benefits and to comply with the Parity Act standards.
• Maryland’s Parity Law (1993): In Maryland, all large group commercial plans must provide MH/SUD benefits, and coverage must be in compliance with the Parity Act. All individual and small group plans sold on Maryland Health Connection or in the commercial market must also provide comprehensive MH/SUD benefits. (www.marylandparity.org)

• Annual and Lifetime Dollar Limits are eliminated.
• Financial Requirements –such as copays, deductibles, and other cost-sharing requirements, and Quantitative Treatment Limitations –such as limits on number of days or number of visits, must not be more restrictive than M/S benefits in the same classification.
• Non-Quantitative Treatment Limitations –such as plan design features that limit the scope or duration of treatment, including medical management, medical necessity and authorization standards, provider network standards and reimbursement rates, and “fail-first” policies (requiring a patient to fail in a lower level of care before authorizing a higher level of care), cannot be imposed for MH/SUD benefits if they are not comparable to the standards used for M/S benefits.
• Classifications –Benefits for MH/SUD are compared with M/S services within each of six classifications: 1) Outpatient, in-network; 2) Outpatient, out-of-network; 3) Inpatient, in-network; 4) Inpatient, out-of-network; 5) Emergency care; and 6) Prescription drugs

Plans are required to provide written disclosure regarding MH/ SUD benefits, and to respond to requests for an explanation of adverse decisions in a timely manner, particularly concerning:

• Medical Necessity Criteria:  Criteria for medical necessity determinations with regard to MH/SUD benefits must be made available to any current or potential participant, beneficiary, or contracting provider upon request.
• Denials of Reimbursement or Payment for Services:  The reason for any denial of reimbursement or payment for services with regard to MH/SUD benefits must be made available within a reasonable time to the participant or beneficiary, upon request or as otherwise required.