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Mental Health Parity

Q&A – Federal Mental Health Parity

Q:  What is the Mental Health Parity Act (Mental Health Parity and Addiction Equity Act of 2008)?

A:  The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008  eliminates discrimination by plans that voluntarily cover mental health conditions, including autism spectrum disorders (ASDs). (See below “Q: Is autism a mental health condition?”) The Mental Health Parity Act does not mandate coverage:

“The law requires that any group health plan that covers more than 50 employees and offers mental health and/or substance use disorders coverage must provide that coverage with no greater financial requirements (i.e., co-pays, deductibles, annual or life-time dollar limits) or treatment limitations (i.e., number of visits) than the predominant requirements the plan applies to substantially all medical / surgical benefits.  Note, however, that the law does not require employers to cover mental health or substance use treatments if they are not already offered.”

(See Mental Health Parity Watch – Understanding the Law.)

Many families receiving new benefits for their children with ASDs may incorrectly attribute the change to a state autism benefits mandate when, in fact, the benefits were required by the Mental Health Parity Act. (See below “Q: Why was the Mental Health Parity Act necessary?”)

Q:  Why was the Mental Health Parity Act necessary?

A:  Some families believe they are fortunate to work for employers who elected to offer mental health benefits for children with ASDs or to live in a state that adopted legislation that mandated such benefits. (See “Q&A: Autism Benefits Mandates – Basic Information.”) Over the years, the hopes of many of these families have been dashed when they learned that, while their plan documents or insurance policies purported to offer such benefits for their children, those benefits are managed in a discriminatory manner so that they receive benefits so limited in scope and duration that the benefits are essentially meaningless.

Other families have similar experiences when they learn that their state mandate only apply to a small minority of families in their state. All such state mandates are similarly limited in scope because of federally mandated ERISA preemption. As a result, state health benefit mandates only affect an employer sponsored health benefit plan if the employer purchases insurance. Self-insured plans are exempt.  These mandates also include other extensive exemptions.  For example, small employer and individual plans are exempt. (See “Florida’s Autism Insurance Benefits Mandate: Who Will Benefit, Who Will Not, and Why?” “Q&A: Autism Benefits Mandates – Basic Information,” “Q&A: ERISA Preemption– Basic Information,” and “Q&A: Identifying Exempt Self-Insured Plans – Basic Information.”)

Currently, the only way to mandate coverage for self-insured plans is through federal legislation.  The most prominent federal legislation to mandate health benefits by overriding ERISA preemption are the Mental Health Parity Act and the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act (Affordable Care Act).  (See “Q&A: ERISA Preemption– Basic Information.”)

Q:  Is autism a mental health condition?

A:  Yes, autism spectrum disorders are a mental health condition.  The American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders DSM-IV-TR (fourth edition, text revision) (DSM-IV-TR) is the main diagnostic reference used by mental health professionals and insurance companies in the US.  Many health care plans refer to DSM-IV -TR to define mental health conditions.  According to the DSM-IV, there are 5 Pervasive Developmental Disorders (PDDs).  Within the five PDDs, there are three Autism Spectrum Disorders (ASDs):

  • Autistic Disorder (classic autism)(1/3 of all ASDs)
  • Asperger’s Syndrome (less than 1/6 of all ASDs)
  • Pervasive Developmental Disorder – Not Otherwise Specified (PDD-NOS)(approximately 1/2 of all ASDs).

See Self-Funded Health Plans: Establishing an Autism Benefit, by Lorri Unumb, Esq., Vice President, State Government Affairs, Autism Speaks.

Q:  What else needs to be done?

A:  While the legislation does not offer universal mental health coverage for children as well as mental health parity, the Mental Health Parity Act is a piece of the puzzle that can begin to make a difference for children with ASDs and their families.  The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act (Affordable Care Act) sets the table for more dramatic change.  Depending on how Affordable Care Act is implemented, health plans with mandatory coverage for children with ASDs could be made available for all families.  “Q&A: ERISA Preemption– Basic Information Q: Are there any exceptions to ERISA preemption?

For every year that passes, the window of opportunity closes for far too many children.  The opportunity costs associated with that lost opportunity can be staggering.  According to Autism Votes, without effective early intervention, the average lifetime cost of an individual who has autism is $3,200,000, while this cost can be reduced by two-thirds through intensive behavioral therapy.  Despite the requirements of the Mental Health Parity Act, which passed in 2008, and despite plan documents or insurance policies that purport to offer mental health benefits for children with ASDs, for many families such benefits continue to be managed in a discriminatory manner. These families receive benefits so limited in scope and duration that the benefits are essentially meaningless.

In 2010, “interim final rules” were issued by the Department of Health and Human Services, the Department of Labor and the Department of the Treasury (Interim Final Rules) to clarify how health plans must comply with the Mental Health Parity Act. The Interim Final Rules represent an opportunity to help America’s children with ASDs who are the beneficiaries of a group health plan or health insurance policy that purports to offer meaningful benefits. It is essential that the Interim Final Rules be carefully crafted to close any loopholes that could make the Mental Health Parity Act ineffective. Meaningful comprehensive final regulations also need to be adopted as soon as possible. To that end, the founders of Behavioral Lifeboat filed a comment letter on the Interim Final Rules that outlines a number of issues that we consider essential for further consideration. See (Comments on MHPAEA Interim Final Regulations.) The comments included:

  • The need to combat medical management strategies that are implemented to save money. The predominant strategy adopted by health insurance issuers and third party administrators (TPAs) of group health plans typically appears to be “just say no.” The time and effort (and in some cases legal costs) that it takes to overcome this strategy adds an additional burden to an overburdened family that significantly enhances the effectiveness of this strategy. As a result, the children with ASDs that are beneficiaries of such plans or policies are essentially uninsured – despite the premiums that their families pay. The regulations implementing the Mental Health Parity Act should include provisions that would both diminish the need for one-at-a-time disputes with group health plans and their TPAs as well as level the playing field when such disputed do occur.  The regulations should require group health plans and their TPAs to maintain sufficient data to both (1) permit audits supporting compliance with the Mental Health Parity Act, and (2) allow participants, beneficiaries, potential participants, and service providers to meaningfully compare available health plans, evaluate claims processing, and enforce rights under the plan.
  • The need to address the scope of services or continuum of care provided by a group health plan or health insurance policy so that group health plans and their TPAs are not free to impose limitations on available services in order to avoid complying with the parity requirements. Failure to address these issues would allow employers to select freely among general plan design features that limit the scope and duration of treatment recommended by a treating health care provider, exclude clinically appropriate services (such as ABA therapy), and qualified service providers (such as certified BABAs and BCaBAs).
  • The need to be clear and concise regarding what information is to be disclosed, and when, to plan participants, beneficiaries, potential participants, and service providers.
  • The need for group health plans and their TPAs to provide specific details and supporting materials when they comply with the requirement that they provide the reason for any denial of benefits to a participant of beneficiary.
  • The need for additional guidance on how the Mental Health Parity Act interacts with state mandates and with the Affordable Care Act.
  • The need for clarity regarding how to interpret the statute and regulations regarding a violation of the Mental Health Parity Act that took place before the effective date of the Interim Final Rules.

These general answers may or may not apply to your specific circumstances.  You should consult a lawyer or other specialist if you think you are entitled to benefits that you do not receive.  Behavioral Lifeboat can help you do that.

If you have questions, please comment below.

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About Behavioral Lifeboat

Behavioral Lifeboat is a nonprofit organization. Our mission is to make evidenced-based behavioral therapy accessible to all by increasing awareness, helping to make comprehensive insurance benefits affordable and meaningful, helping schools provide more effective behavioral therapy programs, and providing grants to make such therapy affordable when other solutions are not available.

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