New regulations require mental health parity in insurance coverage

Government regs defining compliance with the new Mental Health Parity Act have finally come out, and there are a couple of important new points you need to know about.

Some things were already clear just from the Mental Health Parity law. Any employer of 50+ people that offers a plan with mental health/substance abuse benefits must:

  • provide them at the same level as medical/surgical benefits, and
  • drop any previous plan limits on mental health coverage.

Quantitative rules
The rules apply quantitative parity – how much treatment is allowed, what deductible is due – across six mental health benefit categories:

  1. inpatient in-network
  2. inpatient out-of-network
  3. outpatient in-network
  4. outpatient out-of-network
  5. emergency care
  6. prescription drugs.

In any of these classes, a health plan can’t apply a financial requirement or treatment limit to mental health/substance abuse benefits that’s tighter than the most common limit for “substantially all” medical/surgical benefits in that class. (“Substantially all” means at least two-thirds.)

Non-quantitative rules
The regs also require parity in non-quantitative treatment limits. These include medical management, standards to admit a provider to a network, and formulary design.

Example: An employee assistance program (EAP) can’t be a gatekeeper, restricting or directing mental health care, unless similar management is also used for medical/surgical benefits.

Also, employers can’t require employees to exhaust EAP benefits before they can access mental health care if a similar requirement does not exist for accessing other medical care.

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