According to the National Alliance on Mental illness (NAMI), “mental health parity describes the equal treatment of mental health conditions and substance use disorders in insurance plans. When a plan has parity, it means that if you are provided unlimited doctor visits for a chronic condition like diabetes then they must offer unlimited visits for a mental health condition such as depression or schizophrenia.” Traditionally, however, insurance plans tended not to provide the same level of benefits for mental health issues as for other issues.
Mental health parity and the law
Congress first attempted to address this lack of parity with the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), which required health insurance coverage to offer mental health and substance use disorder benefits equivalent to the coverage of medical or surgical benefits. Then in 2010, the Affordable Care Act (ACA) extended the reach of this law by applying it to new insurance markets. The ACA requires that health insurance cover 10 essential health benefits—including mental health and substance abuse benefits — at parity.
These laws did not resolve all mental health parity issues, however. The MHPAEA never specified which health conditions should be covered, leading to litigation about whether parity requirements mandate coverage for such illnesses as eating disorders. In addition, there was no specificity governing how the coverage for mental health should align with other medical coverage. For example, the laws did not state if the mental health coverage should be required to have the same co-pays, deductibles or other plan design features associated with medical coverage.
Then, in December 2016, the 21st Century Cures Act was signed into law. This parity legislation was an attempt to clarify what conditions and services should be covered and to impose some enforcement through audits. After five compliance violations, the law requires an audit of plan documents and improvement plans. The law also clarifies that eating disorders, where were previously not clearly covered conditions, are to be included in the parity statute.
It is important for business owners to be aware of these laws to avoid contracting with an insurance carrier whose plan design does not meet the standard.
TriNet is currently monitoring legislation for changes that affect benefit offerings for small and midsize businesses (SMBs). We will continue to report any developments relating to mental health parity and potential business impacts to employers.
Promoting mental health in the workplace
True mental health parity may be a work in progress but as an employer, you can take steps to minimize the impact of mental health issues in the work environment.
The National Business Group on Health estimates that mental illness and substance abuse issues cost employers between 79 billion and 105 billion dollars annually. These costs are the result of increased absences and decreased productivity, as well as healthcare costs. So, it makes sense to try to reduce the cost.
Unfortunately, there is a stigma in our society regarding mental health. Because of this, many people are suffering in silence.
Even if employees suffering from mental health issues do not ask for help, there are things you can do to help them. For example, you can promote wellness in your workplace and encourage employees to treat their mental health as seriously as their physical health. An employee assistance program is also a good idea. Such a plan can help by offering free, confidential assistance with personal issues, including mental health issues.
This communication is for informational purposes only; it is not legal, tax or accounting advice; and is not an offer to sell, buy or procure insurance.
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