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Law ensuring fair mental health insurance coverage

Legislation to mandate fair insurance coverage for mental health treatment went into effect January 1, 2010. The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) requires health insurance to cover both mental and physical health equally.

In the past, mental health benefits have often been more restrictive than medical/surgical benefits. Under this law, insurance companies can no longer arbitrarily limit the number of hospital days or outpatient treatment sessions, or assign higher co-payments or deductibles for psychological services.

The law requires:

Equal benefits: Coverage for mental health and substance use treatments must be at least equal to that coverage provided for physical health services, including day and visit limits, dollar limits, coinsurance, co-payments, deductibles and out-of-pocket maximums.

Equal limits: All financial requirements and treatment limitations applied to mental health and substance use benefits may be no more restrictive than for physical health benefits.

Equal cost-sharing: The new law prohibits higher deductibles, co-payments, maximum-out-of-pocket costs for mental health and substance use benefits than for physical benefits. For example, your co-payment for psychotherapy will be the same amount as your co-pay for an office visit with your family physician.

The law applies to all group health plans with more than 50 employees that provide mental health or substance use benefits. Plans with 50 or fewer employees must comply with current state mental health parity requirements.

The new law does not apply to the individual (non-employment based) insurance market.

The act does not apply to Medicare patients, but does apply to Medicaid Managed Care plans.

Although the law requires “parity,” or equivalency, for those plans that provide mental health and substance use benefits, large group health plans and their health insurance issuers are not required to include mental health coverage in their benefits package.

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