Know Your Rights
Fair Insurance Coverage: It’s the Law
The federal Parity Law requires equitable coverage of substance use disorder and mental health benefits in both the public and private health insurance markets.
Plans covered by the federal Parity Law cannot apply more restrictive financial requirements or treatment limitations to behavioral health benefits compared to other medical or surgical benefits covered by the plan.
- Financial requirements include co-pays, deductibles, co-insurance, and other out-of-pocket costs.
- Treatment limitations include both quantitative (number or frequency of visits) and non-quantitative (medical management tools) limitations.
Representing a major step forward, the Mental Health Parity and Addiction Equity Act (the federal parity law) was passed in 2008 and requires most health insurance plans to cover mental health and addiction disorder benefits and physical health benefits equally.
- The federal Parity Law applies to most insurers, including:
- Large group health plans
- Plans in the individual and small group markets
- Medicaid managed care plans that offer coverage for MH and/or SUD benefits
- Coverage provided through the Children’s Health Insurance Program
- Medicaid Alternative Benefit Plans, including those provided to the Medicaid expansion population
If you have concerns about your health plan’s compliance with parity law:
- TN Department of Commerce & Insurance: (800) 342-4029 Online Complaint Form
- Need help filing an appeal or making a complaint? Learn how here.
“Parity: Fairness in Health Coverage in Tennessee” trifold
While the concept of parity is simple, the federal parity law is complex and in the ten years since its passage there have been serious challenges to its full implementation and enforcement.
The struggle has now shifted from the legislative to the regulatory sphere and from the federal level to the states, where primary enforcement authority resides. Tennessee recently passed model parity legislation designed to strengthen enforcement efforts by encouraging greater transparency and accountability from insurers and state regulators.
Full implementation of the Parity Law would end discriminatory insurance coverage for those with mental health and substance use disorders. But that will only happen with increased vigorous enforcement of the law.
Your Parity Rights
Federal and state laws prohibit your health insurance plan from discrimination. You have the right to appeal your plan’s decision about your care or coverage. You have the right to appeal the claim with your plan and with an independent review organization. Submitting a complaint about your health plan experience will help improve the system for other families.
Common Parity Violations
Insurer violations of mental health parity laws can take many forms, including placing limits on how long and how often patients can receive care, providing insufficient networks of mental health providers, and more.Most people are unaware that a parity violation has ever occurred. If you know what to watch out for, you will be better equipped to assert your rights.
What does a parity violation look like?
Common parity violations include:
- Fewer visits or days covered for mental health or addiction care.
- Residential or partial hospital care not covered for mental health or addiction.
- Example: Addiction residential care is not covered, but a skilled nursing facility is covered for stroke
- Higher out-of-pocket costs for mental health or addiction care.
- Example: the copay for a mental health therapy visit is higher than copay for an endocrinologist for diabetes.
- Separate deductible for mental health or addiction care on top of the overall deductible. A deductible is the amount you are responsible for before the health plan begins to pay.
- More frequent denial for mental health or addiction care than for other medical care because the health plan determines that the care is not medically necessary.
- Prior approval required more often for mental health or addiction care than for medical care.
- Step therapy: The least expensive mental health or addiction treatment is required before the prescribed care can be considered.
- In-network mental health or substance use providers not available and the health plan does not pay for the out of network providers in your local area.