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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Variables: Health Insurance Parity for Alcohol-Related Treatment

The variables for this policy topic address legal provisions that apply to treatment of alcohol-related disorders in large group health plans. In all but a few States, these provisions are the same for fee-for-service (traditional insurance) plans and managed care plans such as health maintenance organizations (HMOs), point-of-service (POS) plans, and preferred provider organizations (PPOs). Exceptions are indicated in the jurisdiction or row notes.

MANDATE

  1. Must Offer: Health plans must offer an option of coverage for treatment of alcohol-related disorders, but are not required to cover unless offer is accepted. This variable is coded if the only requirement of the statute(s) or regulation(s) is to offer coverage. Specific requirements and limitations are indicated by the "Parity Required" and "Exemptions" variables.
  2. Must Cover: Health plans must cover alcohol-related disorders. Specific requirements and limitations are indicated by the "Parity Required" and "Exemptions" variables.

PARITY REQUIRED

  1. Deductibles: Health plans may not impose greater deductibles on alcohol-related benefits than they impose on benefits for medical and surgical coverage.
  2. Co-payments and Co-Insurance (Co-pay & Co-ins): Health plans may not impose greater co-insurance or co-payment requirements on alcohol-related benefits than they impose on benefits for medical and surgical coverage.
  3. Annual and Lifetime Service Limits (Service Limits): Health plans may not impose more restrictive annual service limits (e.g., the number of covered outpatient visits or inpatient days per year) or lifetime service limits (e.g., the total number of outpatient visits or inpatient days provided under the plan as a whole) on alcohol-related benefits than they impose on benefits for medical and surgical coverage.
  4. Annual and Lifetime Financial Limits (Financial Limits): Health plans may not impose lower annual or lifetime limits on the amount they will pay for alcohol-related benefits than they impose for medical and surgical coverage.

EXEMPTIONS

  1. Cost: Health plans are either exempt from some or all of the parity provisions for alcohol-related disorders or they are permitted to apply certain cost-containment measures if coverage for such disorders can be shown to increase the overall cost of a policy or plan by a specified percentage (generally one to three percent).

NOTE:

Prior to 2014, certain States enacted small business exemptions providing that health plans for employers defined as "small" were not required to meet some or all of the parity requirements applicable to large group plans, or were permitted to adopt certain cost-control measures.

Beginning on January 1, 2014, however, the Federal Affordable Care Act (ACA) requires all small group and individual plans created after March 23, 2010 to comply with Federal parity requirements. Specifically, individual and small group health plans offered in every State are now required to include coverage for mental health and substance use disorders, including alcohol-related disorders, as one of ten categories of Essential Health Benefits, and this coverage is required to comply with Federal parity requirements.

In view of these developments, the Small Business Exemption variable was removed from the APIS comparison tables as of the January 1, 2014 update. Researchers interested in the data formerly collected for this variable may view those data here.