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Health Care Services and Financing: Health Insurance Parity for Alcohol-Related Treatment

Laws addressing requirements that health plans provide the same levels of benefits for alcohol-related disorders as they do for medical and surgical conditions.



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Expander Policy Description

(Period Covered: 1/1/2003 through 1/1/2013)

This policy topic covers laws addressing requirements that health plans provide the same levels of benefits for alcohol-related disorders as they do for medical and surgical conditions.  

Note: The secondary literature and the laws and regulations related to this policy topic use a variety of terms that are sometimes used in different ways by different jurisdictions.  To see definitions for these terms as they are used in APIS, see the Definitions heading below.

Parity for treatment of alcohol-related disorders refers to State and Federal requirements that health plans provide the same levels of benefits for these disorders as they do for medical and surgical conditions. "The same" may be defined in terms of deductibles, co-payments, or other types of cost sharing; annual or lifetime service limits; annual or lifetime payouts; or any combination of these. Some jurisdictions have adopted parity provisions that specifically apply to alcohol-related disorders. Other jurisdictions have parity provisions for general mental health care or substance abuse disorders, either of which may or may not include alcohol-related disorders. APIS addresses only those laws that pertain specifically to parity for treatment of alcohol-related disorders.

Parity laws are a relatively recent development. When health care costs began rising sharply in the 1970s and 1980s, many health plans tightened coverage for mental health care. By the early 1990s, significant disparities had emerged between medical and surgical coverage and mental health coverage, often including coverage for alcohol-related disorders or any type of substance abuse.  In response, the Federal government and many States have passed legislation requiring some type of parity.

Expander Definitions for Health Insurance Parity for Alcohol-Related Treatment

Relevant Definitions Related to Health Insurance Parity for Alcohol-Related Treatment. [1]
Co-insurance
A type of cost sharing where the insured party and insurer share payment of the approved charge for covered services in a specified ratio after payment of the deductible. Most fee-for-service plans require a 20 percent coinsurance for covered inpatient and outpatient medical/surgical services.
Co-payment
A type of cost sharing where the insured party is responsible for paying a fixed dollar amount per covered service. For example, an HMO could require a $10 co-payment for every visit to a network physician.
Cost Sharing
A health insurance policy provision that requires the insured party to pay a portion of the costs of covered services. Deductibles, coinsurance, and co-payment are types of cost sharing.
Deductible
A type of cost sharing where the insured party pays a specified amount of approved charges for covered medical services before the insurer will assume liability for all or part of the remaining covered services.
A type of health care plan where health care providers are paid for individual medical services rendered.
HMO
Health maintenance organization. A type of managed care plan that acts as both insurer and provider of a comprehensive set of health care services to an enrolled population. Services are furnished through a network of providers (such as physicians and hospitals).
Health Plan
An organization that acts as insurer for an enrolled population. Types of health plans include fee-for-service (FFS), preferred provider organization (PPO), point-of-service (POS), and health maintenance organization (HMO).
A system of health care delivery where the health plan attempts to control or coordinate the use of health services by enrolled members to contain health care expenditures and/or improve quality. Types of managed care plans include HMOs, point-of-service (POS) plans, and preferred provider organizations (PPOs).
Point of Service (POS)
Point-of-service plans are managed care plans that cover both in-network and out-of-network services. To encourage use of network providers, patient out-of-pocket costs are higher when non-network providers are used. POS plans generally manage in-network services more tightly than PPOs manage services because POS plans use gatekeepers. 
Preferred Provider Organization (PPO)
Preferred provider organization. A PPO is a managed care plan that contracts with providers to furnish services to plan enrollees. PPO providers are paid according to a discounted fee schedule. Enrollees pay lower out-of-pocket costs when they use network ("preferred") providers. However, services they receive from non-network providers are also covered. Enrollees pay higher out-of-pocket costs when they use non-network providers for covered services.
Premium
The amount an insurer charges for a health insurance policy. The premium amount is computed to pay for the expected costs of all health insurance expenses. Health insurance expenses include medical/surgical services, MH/SA services, and administrative costs and profits.
Primary Care Physician
Primary care physicians generally include physicians with the following specialties: general practice, family practice, internal medicine, obstetrics/gynecology, and pediatrics.
Serious Mental Illness
The National Advisory Mental Health Council defines serious mental illness to include disorders with psychotic symptoms such as schizophrenia, schizoaffective disorder, manic depressive disorder, and autism, as well as severe forms of other disorders such as major depression, panic disorder, and obsessive compulsive disorder.
Self-Insured Plan
Employer-provided health insurance in which the employer, rather than an insurer, is at risk for its employees' medical expenses.
Service Limits
Limits on the amount of services covered by a health plan. For example, a health plan can limit the number of covered outpatient visits or inpatient hospital days.



[1] All definitions come from the Substance Abuse and Mental Health Services Administration's online National Mental Health Information Center, located at http://www.mentalhealth.org/publications/allpubs/mc99-80/prtyappa.asp.
 

Expander Explanatory Notes and Limitations for Health Insurance Parity for Alcohol-Related Treatment

Explanatory Notes and Limitations Specifically Applicable to Health Insurance Parity for Alcohol-Related Treatment

  1. Parity provisions that do not use the word "alcohol" may nonetheless apply to alcohol-related disorders. Provisions that reference disorders listed in the American Psychiatric Association's Diagnostic and Statistical Manual (DSM) are sufficient because alcohol abuse and dependence are included in the DSM's classification of mental disorders. Definitions for "substance abuse," "chemical dependency," and "mental illness" vary across jurisdictions, so reference to those definitions or other clarifying language may be necessary to determine whether the provisions apply to alcohol-related disorders.
     
  2. Certain States have enacted provisions designed to bring their insurance laws into conformity with the Federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), as amended by the Federal Mental Health Parity Act of 1996 (MHPA) and the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). These provisions do not require mental health or substance use disorder benefits coverage. However, if a plan offers coverage for mental health or substance use disorder benefits, then these benefits must be equal to physical illness benefits in certain respects. Such provisions are not coded in APIS. 
     
  3. The APIS analysis of Health Insurance Parity for Alcohol-Related Treatment addresses statutes and regulations regarding most group health plans. This analysis does not consider or include the following types of policies or plans:
     
    • Individual (as opposed to group) plans
    • Disability income plans (income protection in the event the covered person becomes disabled)
    • Accidental death or dismemberment plans
    • Plans that only provide coverage for a specified disease
    • Medicare supplement policies
    • Workers' compensation coverage
    • Medical payment coverage issued as part of a motor vehicle insurance policy
    • Long term care policies, including nursing home fixed indemnity policies
    • Self-insured plans (self-funded plans in which an employer is at risk for the medical expenses of its own employees)
    • State-sponsored assigned risk insurance pools, for residents denied adequate health insurance (generally because of existing health problems) or for persons without insurance but meeting certain Federal eligibility requirements
       
  4. This analysis does not include State medical assistance provisions (State-sponsored or State-administered health plans available to low income individuals).
     
  5. This analysis does not include any interactions between parity laws and mandates of the following Federal programs: Temporary Assistance to Needy Families (TANF), Medicaid, Medicare, Social Security Income (SSI).
     
  6. The analysis does not comprehensively address requirements that pertain exclusively to State employee health plans. However, the research found that none of the States without parity provisions for alcohol-related treatment impose alcohol-related parity requirements on their State employee health plans.

Explanatory Notes and Limitations Applicable to All APIS Policy Topics 

  1. State law may permit local jurisdictions to impose requirements in addition to those mandated by State law. Alternatively, State law may prohibit local legislation on this topic, thereby preempting local powers. APIS does not document policies established by local governments. 
     
  2. In addition to statutes and regulations, judicial decisions (case law) also may affect alcohol-related policies. APIS does not review case law except to determine whether judicial decisions have invalidated statutes or regulations that would otherwise affect the data presented in the comparison tables. 
     
  3. APIS reviews published administrative regulations. However, administrative decisions or directives that are not included in a State's published regulatory codes may have an impact on implementation. This possibility has not been addressed by the APIS research. 
     
  4. Statutes and regulations cited in tables on this policy topic may have been amended or repealed after the specific date or time period specified by the site user's search criteria. 
     
  5. A comprehensive understanding of the data presented in the comparison tables for this policy topic requires examination of the applicable Row Notes and Jurisdiction Notes, which can be accessed from the body of the table via links in the Jurisdiction column. 

Expander Federal Law for Health Insurance Parity for Alcohol-Related Treatment

(Policies in effect on:  1/1/2013)

On October 3, 2008 Congress passed and the President signed the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA).  Rules implementing the MHPAEA became effective on April 5, 2010 for plan years beginning on or after July 1, 2010 (see 26 C.F.R. § 54.9812-1T, 29 C.F.R. § 2590.712, and 45 C.F.R. § 146.136).  The Patient Protection and Affordable Care Act, signed into law on March 23, 2010, is also expected to make changes that will be relevant to this policy topic, but these changes will not take effect until 2014 (see Pub. L. No. 111-148, 124 Stat. 160).  (Note that, as explained in the Explanatory Notes and Limitations section of this policy topic, the APIS analysis of Health Insurance Parity for Alcohol-Related Treatment does not address State medical assistance provisions or State-sponsored assigned risk insurance pools.)

The MHPAEA mandates that if an employer of more than 50 persons provides substance use disorder benefits through a group health plan, those benefits must be equal in certain respects to the medical and surgical benefits provided by that plan.  (For details, see the Relevant Text Excerpts below.)  The MHPAEA, however, does not require plans to provide substance use disorder benefits.

The MHPAEA amended the 1996 Mental Health Parity Act (MHPA), which included parity provisions for mental health care but specifically excluded substance abuse or chemical dependency benefits.  Congress first adopted parity provisions in the Health Insurance Portability and Accountability Act (HIPAA) and then a few months later amended those provisions with the MHPA.

The MHPAEA modified several Federal laws, including the Public Health Service (PHS) Act and the Employee Retirement Income Security Program (ERISA).  The respective PHS Act provisions (42 U.S.C. § 300gg-26generally apply to group health plans, to health insurance issuers offering group or individual health insurance coverage, and to certain State and local government plans. The ERISA provisions (29 U.S.C. § 1185agenerally apply to all group health plans other than governmental plans, church plans, and certain other plans.  The provisions differ only slightly to reflect the scope of each Act

 

In general, Federal law has a limiting effect on the applicability of State parity rules because ERISA exempts self-insured health plans from State laws regulating insurance.  These State laws can apply to health insurance issuers, however, to the extent that they require more favorable treatment with respect to substance use disorder benefits than is required under Federal law. 

 

FEDERAL CITATIONS AND RELEVANT TEXT EXCERPTS 

 
Title 29 - LABOR
CHAPTER 18 - EMPLOYEE RETIREMENT INCOME SECURITY PROGRAM
SUBCHAPTER I - PROTECTION OF EMPLOYEE BENEFIT RIGHTS
Subtitle B - Regulatory Provisions
Part 7 - group health plan requirements
Subpart B - Other Requirements
§ 1185a. Parity in mental health and substance use disorder benefits
 
(a) In general
 
(1) Aggregate lifetime limits
 
In the case of a group health plan (or health insurance coverage offered in connection with such a plan) that provides both medical and surgical benefits and mental health or substance use disorder benefits—
 
(A) No lifetime limit
 
If the plan or coverage does not include an aggregate lifetime limit on substantially all medical and surgical benefits, the plan or coverage may not impose any aggregate lifetime limit on mental health or substance use disorder benefits.
 
(B) Lifetime limit
 
If the plan or coverage includes an aggregate lifetime limit on substantially all medical and surgical benefits (in this paragraph referred to as the “applicable lifetime limit”), the plan or coverage shall either—
 
(i) apply the applicable lifetime limit both to the medical and surgical benefits to which it otherwise would apply and to mental health and substance use disorder benefits and not distinguish in the application of such limit between such medical and surgical benefits and mental health and substance use disorder benefits; or
 
(ii) not include any aggregate lifetime limit on mental health or substance use disorder benefits that is less than the applicable lifetime limit.
 
(C) Rule in case of different limits
 
In the case of a plan or coverage that is not described in subparagraph (A) or (B) and that includes no or different aggregate lifetime limits on different categories of medical and surgical benefits, the Secretary shall establish rules under which subparagraph (B) is applied to such plan or coverage with respect to mental health and substance use disorder benefits by substituting for the applicable lifetime limit an average aggregate lifetime limit that is computed taking into account the weighted average of the aggregate lifetime limits applicable to such categories.
 
(2) Annual limits
 
In the case of a group health plan (or health insurance coverage offered in connection with such a plan) that provides both medical and surgical benefits and mental health or substance use disorder benefits—
 
(A) No annual limit
 
If the plan or coverage does not include an annual limit on substantially all medical and surgical benefits, the plan or coverage may not impose any annual limit on mental health or substance use disorder benefits.
 
(B) Annual limit
 
If the plan or coverage includes an annual limit on substantially all medical and surgical benefits (in this paragraph referred to as the “applicable annual limit”), the plan or coverage shall either—
 
(i) apply the applicable annual limit both to medical and surgical benefits to which it otherwise would apply and to mental health and substance use disorder benefits and not distinguish in the application of such limit between such medical and surgical benefits and mental health and substance use disorder benefits; or
 
(ii) not include any annual limit on mental health or substance use disorder benefits that is less than the applicable annual limit.
 
(C) Rule in case of different limits
 
In the case of a plan or coverage that is not described in subparagraph (A) or (B) and that includes no or different annual limits on different categories of medical and surgical benefits, the Secretary shall establish rules under which subparagraph (B) is applied to such plan or coverage with respect to mental health and substance use disorder benefits by substituting for the applicable annual limit an average annual limit that is computed taking into account the weighted average of the annual limits applicable to such categories.
 
(3) Financial requirements and treatment limitations
 
(A) In general
 
In the case of a group health plan (or health insurance coverage offered in connection with such a plan) that provides both medical and surgical benefits and mental health or substance use disorder benefits, such plan or coverage shall ensure that—
 
(i) the financial requirements applicable to such mental health or substance use disorder benefits are no more restrictive than the predominant financial requirements applied to substantially all medical and surgical benefits covered by the plan (or coverage), and there are no separate cost sharing requirements that are applicable only with respect to mental health or substance use disorder benefits; and
 
(ii) the treatment limitations applicable to such mental health or substance use disorder benefits are no more restrictive than the predominant treatment limitations applied to substantially all medical and surgical benefits covered by the plan (or coverage) and there are no separate treatment limitations that are applicable only with respect to mental health or substance use disorder benefits.
 
(B) Definitions
 
In this paragraph:
 
(i) Financial requirement
 
The term “financial requirement” includes deductibles, copayments, coinsurance, and out-of-pocket expenses, but excludes an aggregate lifetime limit and an annual limit subject to paragraphs (1) and (2),1
 
(ii) Predominant
 
A financial requirement or treatment limit is considered to be predominant if it is the most common or frequent of such type of limit or requirement.
 
(iii) Treatment limitation
 
The term “treatment limitation” includes limits on the frequency of treatment, number of visits, days of coverage, or other similar limits on the scope or duration of treatment.
 
(4) Availability of plan information
 
The criteria for medical necessity determinations made under the plan with respect to mental health or substance use disorder benefits (or the health insurance coverage offered in connection with the plan with respect to such benefits) shall be made available by the plan administrator (or the health insurance issuer offering such coverage) in accordance with regulations to any current or potential participant, beneficiary, or contracting provider upon request. The reason for any denial under the plan (or coverage) of reimbursement or payment for services with respect to mental health or substance use disorder benefits in the case of any participant or beneficiary shall, on request or as otherwise required, be made available by the plan administrator (or the health insurance issuer offering such coverage) to the participant or beneficiary in accordance with regulations.
 
(5) Out-of-network providers
 
In the case of a plan or coverage that provides both medical and surgical benefits and mental health or substance use disorder benefits, if the plan or coverage provides coverage for medical or surgical benefits provided by out-of-network providers, the plan or coverage shall provide coverage for mental health or substance use disorder benefits provided by out-of-network providers in a manner that is consistent with the requirements of this section.
 
(b) Construction
 
Nothing in this section shall be construed—
 
(1) as requiring a group health plan (or health insurance coverage offered in connection with such a plan) to provide any mental health or substance use disorder benefits; or
 
(2) in the case of a group health plan (or health insurance coverage offered in connection with such a plan) that provides mental health or substance use disorder benefits, as affecting the terms and conditions of the plan or coverage relating to such benefits under the plan or coverage, except as provided in subsection (a).
 
(c) Exemptions
 
(1) Small employer exemption
 
(A) In general
 
This section shall not apply to any group health plan (and group health insurance coverage offered in connection with a group health plan) for any plan year of a small employer.
 
(B) Small employer
 
For purposes of subparagraph (A), the term “small employer” means, in connection with a group health plan with respect to a calendar year and a plan year, an employer who employed an average of at least 2 (or 1 in the case of an employer residing in a State that permits small groups to include a single individual) but not more than 50 employees on business days during the preceding calendar year.
 
(C) Application of certain rules in determination of employer size
 
For purposes of this paragraph—
 
(i) Application of aggregation rule for employers
 
Rules similar to the rules under subsections (b), (c), (m), and (o) of section 414 of title 26 shall apply for purposes of treating persons as a single employer.
 
(ii) Employers not in existence in preceding year
 
In the case of an employer which was not in existence throughout the preceding calendar year, the determination of whether such employer is a small employer shall be based on the average number of employees that it is reasonably expected such employer will employ on business days in the current calendar year.
 
(iii) Predecessors
 
Any reference in this paragraph to an employer shall include a reference to any predecessor of such employer.
 
(2) Cost exemption
 
(A) In general
 
With respect to a group health plan (or health insurance coverage offered in connection with such a plan), if the application of this section to such plan (or coverage) results in an increase for the plan year involved of the actual total costs of coverage with respect to medical and surgical benefits and mental health and substance use disorder benefits under the plan (as determined and certified under subparagraph (C)) by an amount that exceeds the applicable percentage described in subparagraph (B) of the actual total plan costs, the provisions of this section shall not apply to such plan (or coverage) during the following plan year, and such exemption shall apply to the plan (or coverage) for 1 plan year. An employer may elect to continue to apply mental health and substance use disorder parity pursuant to this section with respect to the group health plan (or coverage) involved regardless of any increase in total costs.
 
(B) Applicable percentage
 
With respect to a plan (or coverage), the applicable percentage described in this subparagraph shall be—
 
(i) 2 percent in the case of the first plan year in which this section is applied; and
 
(ii) 1 percent in the case of each subsequent plan year.
 
(C) Determinations by actuaries
 
Determinations as to increases in actual costs under a plan (or coverage) for purposes of this section shall be made and certified by a qualified and licensed actuary who is a member in good standing of the American Academy of Actuaries. All such determinations shall be in a written report prepared by the actuary. The report, and all underlying documentation relied upon by the actuary, shall be maintained by the group health plan or health insurance issuer for a period of 6 years following the notification made under subparagraph (E).
 
(D) 6-month determinations
 
If a group health plan (or a health insurance issuer offering coverage in connection with a group health plan) seeks an exemption under this paragraph, determinations under subparagraph (A) shall be made after such plan (or coverage) has complied with this section for the first 6 months of the plan year involved.
 
(E) Notification
 
(i) In general
A group health plan (or a health insurance issuer offering coverage in connection with a group health plan) that, based upon a certification described under subparagraph (C), qualifies for an exemption under this paragraph, and elects to implement the exemption, shall promptly notify the Secretary, the appropriate State agencies, and participants and beneficiaries in the plan of such election.
 
* * *
 
(d) Separate application to each option offered
 
In the case of a group health plan that offers a participant or beneficiary two or more benefit package options under the plan, the requirements of this section shall be applied separately with respect to each such option.
 
(e) Definitions
 
For purposes of this section—
 
(1) Aggregate lifetime limit
 
The term “aggregate lifetime limit” means, with respect to benefits under a group health plan or health insurance coverage, a dollar limitation on the total amount that may be paid with respect to such benefits under the plan or health insurance coverage with respect to an individual or other coverage unit.
 
(2) Annual limit
 
The term “annual limit” means, with respect to benefits under a group health plan or health insurance coverage, a dollar limitation on the total amount of benefits that may be paid with respect to such benefits in a 12-month period under the plan or health insurance coverage with respect to an individual or other coverage unit.
 
(3) Medical or surgical benefits
 
The term “medical or surgical benefits” means benefits with respect to medical or surgical services, as defined under the terms of the plan or coverage (as the case may be), but does not include mental health or substance use disorder benefits.
 
(4) Mental health benefits
 
The term “mental health benefits” means benefits with respect to services for mental health conditions, as defined under the terms of the plan and in accordance with applicable Federal and State law.
 
(5) Substance use disorder benefits
 
The term “substance use disorder benefits” means benefits with respect to services for substance use disorders, as defined under the terms of the plan and in accordance with applicable Federal and State law.
 
* * *
 
 
United States Code
Title 42 - THE PUBLIC HEALTH AND WELFARE
CHAPTER 6A - PUBLIC HEALTH SERVICE
SUBCHAPTER XXV - REQUIREMENTS RELATING TO HEALTH INSURANCE COVERAGE
Part A - Individual and Group Market Reforms
Subpart 2 - Improving Coverage
§ 300gg–26. Parity in mental health and substance use disorder benefits
 
(a) In general
 
(1) Aggregate lifetime limits
 
In the case of a group health plan or a health insurance issuer offering group or individual health insurance coverage that provides both medical and surgical benefits and mental health or substance use disorder benefits—
 
(A) No lifetime limit
 
If the plan or coverage does not include an aggregate lifetime limit on substantially all medical and surgical benefits, the plan or coverage may not impose any aggregate lifetime limit on mental health or substance use disorder benefits.
 
(B) Lifetime limit
 
If the plan or coverage includes an aggregate lifetime limit on substantially all medical and surgical benefits (in this paragraph referred to as the “applicable lifetime limit”), the plan or coverage shall either—
 
(i) apply the applicable lifetime limit both to the medical and surgical benefits to which it otherwise would apply and to mental health and substance use disorder benefits and not distinguish in the application of such limit between such medical and surgical benefits and mental health and substance use disorder benefits; or
 
(ii) not include any aggregate lifetime limit on mental health or substance use disorder benefits that is less than the applicable lifetime limit.
 
(C) Rule in case of different limits
 
In the case of a plan or coverage that is not described in subparagraph (A) or (B) and that includes no or different aggregate lifetime limits on different categories of medical and surgical benefits, the Secretary shall establish rules under which subparagraph (B) is applied to such plan or coverage with respect to mental health and substance use disorder benefits by substituting for the applicable lifetime limit an average aggregate lifetime limit that is computed taking into account the weighted average of the aggregate lifetime limits applicable to such categories.
 
(2) Annual limits
 
In the case of a group health plan or a health insurance issuer offering group or individual health insurance coverage that provides both medical and surgical benefits and mental health or substance use disorder benefits—
 
(A) No annual limit
 
If the plan or coverage does not include an annual limit on substantially all medical and surgical benefits, the plan or coverage may not impose any annual limit on mental health or substance use disorder benefits.
 
(B) Annual limit
 
If the plan or coverage includes an annual limit on substantially all medical and surgical benefits (in this paragraph referred to as the “applicable annual limit”), the plan or coverage shall either—
 
(i) apply the applicable annual limit both to medical and surgical benefits to which it otherwise would apply and to mental health and substance use disorder benefits and not distinguish in the application of such limit between such medical and surgical benefits and mental health and substance use disorder benefits; or
 
(ii) not include any annual limit on mental health or substance use disorder benefits that is less than the applicable annual limit.
 
(C) Rule in case of different limits
 
In the case of a plan or coverage that is not described in subparagraph (A) or (B) and that includes no or different annual limits on different categories of medical and surgical benefits, the Secretary shall establish rules under which subparagraph (B) is applied to such plan or coverage with respect to mental health and substance use disorder benefits by substituting for the applicable annual limit an average annual limit that is computed taking into account the weighted average of the annual limits applicable to such categories.
 
(3) Financial requirements and treatment limitations
 
(A) In general
 
In the case of a group health plan or a health insurance issuer offering group or individual health insurance coverage that provides both medical and surgical benefits and mental health or substance use disorder benefits, such plan or coverage shall ensure that—
 
(i) the financial requirements applicable to such mental health or substance use disorder benefits are no more restrictive than the predominant financial requirements applied to substantially all medical and surgical benefits covered by the plan (or coverage), and there are no separate cost sharing requirements that are applicable only with respect to mental health or substance use disorder benefits; and
 
(ii) the treatment limitations applicable to such mental health or substance use disorder benefits are no more restrictive than the predominant treatment limitations applied to substantially all medical and surgical benefits covered by the plan (or coverage) and there are no separate treatment limitations that are applicable only with respect to mental health or substance use disorder benefits.
 
(B) Definitions
 
In this paragraph:
 
(i) Financial requirement
 
The term “financial requirement” includes deductibles, copayments, coinsurance, and out-of-pocket expenses, but excludes an aggregate lifetime limit and an annual limit subject to paragraphs (1) and (2).
 
(ii) Predominant
 
A financial requirement or treatment limit is considered to be predominant if it is the most common or frequent of such type of limit or requirement.
 
(iii) Treatment limitation
 
The term “treatment limitation” includes limits on the frequency of treatment, number of visits, days of coverage, or other similar limits on the scope or duration of treatment.
 
(4) Availability of plan information
 
The criteria for medical necessity determinations made under the plan with respect to mental health or substance use disorder benefits (or the health insurance coverage offered in connection with the plan with respect to such benefits) shall be made available by the plan administrator (or the health insurance issuer offering such coverage) in accordance with regulations to any current or potential participant, beneficiary, or contracting provider upon request. The reason for any denial under the plan (or coverage) of reimbursement or payment for services with respect to mental health or substance use disorder benefits in the case of any participant or beneficiary shall, on request or as otherwise required, be made available by the plan administrator (or the health insurance issuer offering such coverage) to the participant or beneficiary in accordance with regulations.
 
(5) Out-of-network providers
 
In the case of a plan or coverage that provides both medical and surgical benefits and mental health or substance use disorder benefits, if the plan or coverage provides coverage for medical or surgical benefits provided by out-of-network providers, the plan or coverage shall provide coverage for mental health or substance use disorder benefits provided by out-of-network providers in a manner that is consistent with the requirements of this section.
 
(b) Construction
 
Nothing in this section shall be construed—
 
(1) as requiring a group health plan or a health insurance issuer offering group or individual health insurance coverage to provide any mental health or substance use disorder benefits; or
 
(2) in the case of a group health plan or a health insurance issuer offering group or individual health insurance coverage that provides mental health or substance use disorder benefits, as affecting the terms and conditions of the plan or coverage relating to such benefits under the plan or coverage, except as provided in subsection (a).
 
(c) Exemptions
 
(1) Small employer exemption
 
This section shall not apply to any group health plan and a health insurance issuer offering group or individual health insurance coverage for any plan year of a small employer (as defined in section 300gg–91(e)(4) of this title, except that for purposes of this paragraph such term shall include employers with 1 employee in the case of an employer residing in a State that permits small groups to include a single individual).
 
(2) Cost exemption
 
(A) In general
 
With respect to a group health plan or a health insurance issuer offering group or individual health insurance coverage, if the application of this section to such plan (or coverage) results in an increase for the plan year involved of the actual total costs of coverage with respect to medical and surgical benefits and mental health and substance use disorder benefits under the plan (as determined and certified under subparagraph (C)) by an amount that exceeds the applicable percentage described in subparagraph (B) of the actual total plan costs, the provisions of this section shall not apply to such plan (or coverage) during the following plan year, and such exemption shall apply to the plan (or coverage) for 1 plan year. An employer may elect to continue to apply mental health and substance use disorder parity pursuant to this section with respect to the group health plan (or coverage) involved regardless of any increase in total costs.
 
(B) Applicable percentage
 
With respect to a plan (or coverage), the applicable percentage described in this subparagraph shall be—
 
(i) 2 percent in the case of the first plan year in which this section is applied; and
 
(ii) 1 percent in the case of each subsequent plan year.
 
(C) Determinations by actuaries
 
Determinations as to increases in actual costs under a plan (or coverage) for purposes of this section shall be made and certified by a qualified and licensed actuary who is a member in good standing of the American Academy of Actuaries. All such determinations shall be in a written report prepared by the actuary. The report, and all underlying documentation relied upon by the actuary, shall be maintained by the group health plan or health insurance issuer for a period of 6 years following the notification made under subparagraph (E).
 
(D) 6-month determinations
 
If a group health plan (or a health insurance issuer offering coverage in connection with a group health plan) seeks an exemption under this paragraph, determinations under subparagraph (A) shall be made after such plan (or coverage) has complied with this section for the first 6 months of the plan year involved.
 
(E) Notification
 
(i) In general
 
A group health plan (or a health insurance issuer offering coverage in connection with a group health plan) that, based upon a certification described under subparagraph (C), qualifies for an exemption under this paragraph, and elects to implement the exemption, shall promptly notify the Secretary, the appropriate State agencies, and participants and beneficiaries in the plan of such election.
 
* * *
 
(d) Separate application to each option offered
 
In the case of a group health plan that offers a participant or beneficiary two or more benefit package options under the plan, the requirements of this section shall be applied separately with respect to each such option.
 
(e) Definitions
 
For purposes of this section—
 
(1) Aggregate lifetime limit
 
The term “aggregate lifetime limit” means, with respect to benefits under a group health plan or health insurance coverage, a dollar limitation on the total amount that may be paid with respect to such benefits under the plan or health insurance coverage with respect to an individual or other coverage unit.
 
(2) Annual limit
 
The term “annual limit” means, with respect to benefits under a group health plan or health insurance coverage, a dollar limitation on the total amount of benefits that may be paid with respect to such benefits in a 12-month period under the plan or health insurance coverage with respect to an individual or other coverage unit.
 
(3) Medical or surgical benefits
 
The term “medical or surgical benefits” means benefits with respect to medical or surgical services, as defined under the terms of the plan or coverage (as the case may be), but does not include mental health or substance use disorder benefits.
 
(4) Mental health benefits
 
The term “mental health benefits” means benefits with respect to services for mental health conditions, as defined under the terms of the plan and in accordance with applicable Federal and State law.
 
(5) Substance use disorder benefits
 
The term “substance use disorder benefits” means benefits with respect to services for substance use disorders, as defined under the terms of the plan and in accordance with applicable Federal and State law.
 
 
Source for all citations on this page: FDsys, the Federal Digital System of the U.S. Government Printing Office (GPO).
Excerpts from the United States Code are current as of 2012. Excerpts from the Code of Federal Regulations are current as of 2013.  Excerpts from Public Laws of Congress are current as of the year of enactment.
The GPO’s Public Domain/Copyright Notice is available under the Policies heading at
http://www.gpo.gov/help/index.html .

  

 

Expander Selected References for Health Insurance Parity for Alcohol-Related Treatment

  1. Barry, C.L., and Huskamp, H.A. Moving beyond parity: Mental health and addiction care under the ACA. New England Journal of Medicine 365(11):973-5, 2011.
     
  2. Barry, C.L., Huskamp, H.A., and Goldman, H.H. A political history of Federal mental health and addiction insurance parity. Milbank Quarterly 88(3):404-33, 2010.
     
  3. Busch, S.H. Implications of the Mental Health Parity and Addiction Equity Act. American Journal of Psychiatry 169(1):1-3, 2012.
     
  4. Ciemins, E.L. The effect of parity-induced copayment reductions on adolescent utilization of substance use services. Journal of Studies on Alcohol and Drugs 65(6):731-5, 2004.
     
  5. Clark, R.E., Samnaliev, M., and McGovern, M.P. Impact of substance disorders on medical expenditures for Medicaid beneficiaries with behavioral health disorders. Psychiatry Services 60(1):35-42, 2009.
     
  6. Mark, T.L., and Vandivort-Warren, R. Spending trends on substance abuse treatment under private employer-sponsored insurance, 2001-2009. Drug and Alcohol Dependence [Epub ahead of print] March 19, 2012.
     
  7. McConnell, K.J., Ridgely, M.S., and McCarty, D. What Oregon's parity law can tell us about the Federal Mental Health Parity and Addiction Equity Act and spending on substance abuse treatment services. Drug and Alcohol Dependence [Epub ahead of print] February 28, 2012.
     
  8. New Freedom Commission on Mental Health, Achieving the Promise: Transforming Mental Health Care in America. Final Report. HHS Pub. No. SMA-03-3832. Rockville, MD: 2003.
     
  9. O'Keeffe, T., Shafi, S., Sperry, J.L., and Gentilello, L.M. The implications of alcohol intoxication and the Uniform Policy Provision Law on trauma centers: A national trauma data bank analysis of minimally injured patients. Journal of Trauma 66(2):495-8, 2009.
     
  10. Sing, M., Hill, S., Smolkin, S., and Heiser, N. Insurance Benefits: The Costs and Effects of Parity for Mental Health and Substance Abuse Insurance Benefits, Substance Abuse and Mental Health Services Administration (SAMHSA), 1998.
     
  11. Smith, D.E., Lee, D.R., and Davidson, L.D. Health care equality and parity for treatment of addictive disease. Journal of Psychoactive Drugs 42(2):121-6, 2010.

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