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Parity in Mental Health Insurance Coverage



The following charts provide information on 33 state laws requiring parity in mental health insurance coverage, compared with the federal Mental Health Parity Act.

The charts are provided as a guide for advocates seeking to compare the regulation of mental health insurance coverage in their state with actions in other states. The Bazelon Center urges that all states enact comprehensive parity laws that cover all populations and that require health plans to cover all mental and addictive disorders to the same extent that physical health disorders are covered.

The first chart presents information on legislation date, populations covered and whether the law specifically permits the use of managed care. The second chart presents data on coverage (populations covered and types of policies included) and indicates whether the law requires parity or merely requires that a parity benefit be offered as one option and whether or not the law is permanent.

The table was developed by SGR Health, Ltd., from original research and efforts of other national researchers. See footnotes for entities' contributions.



State

Major Characteristics of Legislation

Year Enacted (1) Effective Date (2) Allows Managed Care (3) Covers All Mental Health Disorders (4) Covers Substance Abuse/Chemical Dependency (5)
1. Federal Parity Act 1996 1/1/1998 N/A Yes No
2. Arizona 1997 7/1/1997 N/A Yes No
3. Arkansas 1997 8/1/1997 Yes Yes Voluntary if offered
4. California 1999 7/1/2000 Yes SMI No
5. Colorado 1998 1/1/1998 Yes SMI No
6. Connecticut 1997/1999 10/1/1997 Yes Yes (1999) No
7. Delaware 1998 1/1/1999 Yes SMI No
8. Georgia 1998 4/6/1998 Yes Yes No
9. Hawaii 1999 Unknown Yes SMI No
10. Indiana 1997/1999 7/1/1999 and 2/2/2000 Yes Yes No
11. Kentucky 2000 Unknown Yes Yes Yes
12. Louisiana 1999 1/1/2000 Yes SMI No
13. Maine 1995 3/1/1996 Yes SMI coverage mandated for groups; mandated offering for individual policies No
14. Maryland 1994 8/1/1994 Yes Yes Yes
15. Minnesota 1995 8/1/1995 Yes Mandated for HMO's; and mandated if offered for individual policies Yes
16 Missouri 1999 1/1/2000 Yes No for Unmanaged Plans; Yes for Managed Plans No
17. Montana 1999 1/1/2000 Yes SMI No
18. Nebraska 1999 1/1/2000 and 1/1/2002 Yes Biological Disorders No
19. Nevada 1999 1/1/2000 Yes SMI No
20. New Hampshire 1994 1/1/1995 Yes SMI No
21. New Jersey 1999 8/13/1999 Yes SMI No
22. New Mexico 1999 7/1/2000 Yes Yes No
23. North Carolina 1991/1997 1/1/1992 Yes Yes Yes
24. Oklahoma 1999 1/1/2000 Yes SMI No
25. Pennsylvania 1998 6/21/1995 Yes SMI No
26. Rhode Island 1994 1/1/1995 Yes SMI No
27. South Carolina 1997 3/1/1997 N/A Yes No
28. South Dakota 1998 7/1/1998 Yes SMI No
29. Tennessee 1998 1/1/2000 Yes Yes No
30. Texas 1991/1997 1/1/1998 Yes SMI No
31. Utah 2000 6/22/1995 Yes Yes No.
32. Vermont 1997 1/1/1998 Yes Yes Yes
33 Virginia 1999 1/1/2000 Yes SMI Yes
34. West Virginia ? 1997 and 1998 Yes Yes No

State

Major Characteristics of Legislation

Mandatory

(6)

 Is Law Perma- nent (7) Prohibits Limits on Impatient Days and Outpatient Visits (8) Small Business Exempt? (9)

Covers Policies or Employers Regardless of Cost Increases (10) Explicit Mention of PDD/Autism (11)
1. Federal Parity Act No No No No No No
2. Arizona Yes ? No No No No
3. Arkansas Yes Yes Yes No No No
4. California Yes Yes Yes Yes Yes No
5. Colorado Yes Yes Yes Yes Yes No
6. Connecticut Yes Yes ? Yes Yes No
7. Delaware For Health Insurers Yes Yes Yes Yes No
8. Georgia No Yes Yes No Yes No
9. Hawaii For Health Insurers ? No Yes No ?
10. Indiana No Yes Yes No No No
11. Kentucky No Yes Yes No Yes No
12. Louisiana Yes Yes Yes Yes Yes No
13. Maine Yes Yes Yes Yes Yes No
14. Maryland For Health Insurers and HMOs Yes Yes Yes Yes Yes DD
15. Minnesota Yes Yes Yes Yes Yes Yes
16. Missouri Yes Yes Yes Yes No No
17. Montana Yes Yes Yes Yes Yes Yes
18. Nebraska No Yes No No Yes No
19. Nevada Yes Yes No No Yes Yes
20. New Hampshire For Groups and HMOs Yes Yes Yes Yes No
21. New Jersey Yes Yes Yes Yes Yes No
22. New Mexico Yes Yes Same as Medical ? Yes but different requirements apply for employers 2-49 and 50 or more Yes
23. North Carolina Yes Yes Yes No No No
24. Oklahoma Yes Yes Yes No No No
25. Pennsylvania Yes ? No Yes Yes ?
26. Rhode Island Yes Yes Yes but impatient coverage for continuous hospitalization is limited to 90 days Yes Yes No
27. South Carolina No No

No No No No
28. South Dakota Yes Yes Yes Yes Yes No
29 Tennessee Yes Yes No No No No
30 Texas Yes Yes No No Yes Yes
31. Utah Yes No No No Yes but this exemption has within it special limits and provisions unique to Utah No
32. Vermont Yes Yes Yes Yes Yes Yes
33. Virginia Yes Yes Yes No Yes Yes
34 West Virginia Yes ? No (13) ? ? ?
States without parity as of 4/25/2000 (15)

Alabama

Alaska

District of Columbia (Has 1997 law mandating that there be MHSA Benefits in group, individual, HMO and state employee plans).

Florida

Idaho

Illinois

Iowa

Kansas

Massachusetts (12)

Michigan

Mississippi

New York

North Dakota

Ohio (but state does have parity plus for state employees for 1995-2000; FFS and employees have had parity plus since 1990, according to Roland Sturm, RAND).

Oregon

Washington

Wisconsin

Wyoming

States Without Parity as of 4/25/2000 (15)

1. Several states have enacted successive, increasingly broad parity statutes; in such case two dates are listed under "Year Enacted."

2. Some states have staged parity implementation; two dates are listed. Effective date is the date on which the statute begins to be implemented, not necessarily the date by which implementation is complete. For many states the effective date marks the beginning of implementation, which occurs as each insurance contract is renewed.

3. "Yes" includes both states that explicitly permit managed care and those that do not prohibit it.

4. Some state statutes use the term "biologically-based brain disorders"; others use "serious mental illness." The latter term includes more DSM-IV R (American Psychiatric Association) diagnoses. We use "SMI" here to indicate either definition because all biologically-based brain disorders are generally considered to be serious mental illnesses. "Yes" answer means that the statute uses the broadest definition of "mental health" or does not restrict the statute specifically to SMI or BBBD's or to a specific lists of covered disorders. States that have limited parity to specific diagnoses are listed here as having SMI parity. Interestingly, such limitations, thought to limit excessive costs of these mandates, are often not administered by diagnosis by insurers or health plans because their reimbursement codes do not proceed by diagnosis.

5. This refers only to the parity statute itself; some states have mandates substance abuse coverage separate from parity.

6. "Mandatory" means that the word "mandate" or "requirement" appears in the statute. Some states make offering benefits optional. See below section called MANDATES.

7. Refers to whether or not the statute has "sunset" or termination date explicitly mentioned. If no mention, state is recorded as "yes."

8. Some states prohibit such limits; other simply say benefits must be the same as for physical health. Both are classified as "yes."

9. Many states exempt small businesses from the parity statute. Small business definitions range from "under 50" to "under 15," depending on the state. Some small businesses comply voluntarily, even if exempted.

10. Footnote missing.

11. Footnote missing.



Definitions

* MANDATES

Parity (or other) state mandates are of three kinds: mandatory inclusions, in which insurance policies must include certain minimum coverages; mandated benefits, in which sellers are required to offer certain kinds of coverage or to "make available" such coverage; and mandated if offered, meaning that if plans offer mental health benefits, they must be offered at parity with physical health benefits. Generally, mandates of all three kinds require that mental health coverage be offered on the same "terms and conditions" as coverage for treatment of other physical illness.

A state may have a mental health or substance abuse coverage mandate without having a parity requirement. It may also mandate that behavioral health practitioners be considered eligible for reimbursement under the same terms and conditions as other providers.

* SET TERMS AND CONDITIONS OF COVERAGE (SEE NOTE 10 ABOVE)

While a state may prohibit limits on inpatient days or outpatient visits that are specific to mental health or substance abuse only, the statute may explicitly permit design differences in other plan features such as co-payments, deductibles or other forms of cost sharing. This level of detail is not included here.

PLAN DESIGN FEATURES NOT MENTIONED HERE:

Some states prohibit special or separate out-of-pocket limits that apply only to mental health or substance abuse. This table does not include this level of detail.

MEDICAL NECESSITY:

Whether or not a benefit is offered to an enrollee/insured person usually depends on whether the treatment proposed for the condition or disorder is considered to be medically necessary. Definitions of medical necessity are not usually offered in the parity statutes, although they may exist in a state's other statutes or insurance regulations. Therefore, an individual benefit may be required to be offered at parity but may not be reimbursed if the treatment proposed is not considered to be medically necessary by the fiduciary or its staff.

PROVIDER, SERVICE/TREATMENT AND ENROLLEE/BENEFICIARY ELIGIBILITY:

Even when benefits are at parity and are considered to be medically necessary, a particular type of provider, a particular service or treatment or a patient/beneficiary may not be considered eligible for coverage. Fiduciaries (plans and insurers or self-insured employers) define which types of providers and treatments are to be considered eligible for reimbursement. If an approved treatment is not provided by an eligible provider, it will not be reimbursed. Similarly, even if the provider is eligible, the treatment is covered, benefits are at parity and treatment is medically necessary, if an enrollee or beneficiary is no longer or not yet eligible for coverage, the treatment will not be reimbursed.

STATES THAT HAVE ENACTED PARITY STATUTES TO MATCH THE FEDERAL MENTAL HEALTH PARITY ACT: Arizona, Delaware, Louisiana, Montana, Nevada, Tennessee.

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