Parity Law 101
The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008 was passed with the goal of ending discriminatory health care practices against those with behavioral health conditions and increasing coverage of behavioral health services for the growing number of Americans with mental health and substance use disorders. MHPAEA, which applies to employment–based group health plans and health insurance carriers that insure such plans, does not require health plans to provide behavioral health care coverage— it only requires that those carriers and plans that choose to provide mental health and substance use disorder benefits must cover it in parity with medical and surgical benefits. The Affordable Care Act (ACA) extended parity to non-grandfathered individual insurance plans and small group health plans.
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Parity applies to quantitative treatment limitations (QTLs), for example restrictions on the number of days, episodes, or treatments that are covered and financial requirements, such as copays and coinsurance. Plans must ensure that the limits imposed on behavioral health benefits must be comparable to what is imposed on medical and surgical benefits. In addition, non-quantitative treatment limitations (NQTLs), such as the use of utilization review by a carrier or prior authorization requirements, cannot be more restrictive for behavioral health benefits coverage than for medical and surgical coverage.
Since the enactment of MHPAEA, regulators and the health insurance industry have failed to achieve the full aim of the law. MHPAEA’s rules and regulations were not issued for private insurers until 2013 and for Medicaid and the Child Health Insurance Program (CHIP) until 2016. Insurers haven’t had incentive to comply with the law because it is not being monitored and enforced, so unless told otherwise they cut costs to turn a profit for their shareholders.
Enacted in 2016, The 21st Century Cures Act made several reforms to the nation’s behavioral health systems. Significantly, the Act requires federal agencies to take steps to promote understanding and compliance with MHPAEA. These steps include providing additional guidance regarding disclosure requirements and NQTLs, providing an opportunity for stakeholders to provide input, soliciting feedback on how disclosure processes can be improved, and providing increased transparency with a public annual report to Congress. The law also clarified that benefits for eating disorders are subject to the requirements of MHPAEA.