Understanding Mental Health and Substance Abuse Disorder Parity Laws

Mental Health Image

Left untreated, mental health and substance use disorders can be debilitating and life-threatening.  Parity laws are federal and state statutes that remove limits imposed by insurance providers on access to mental health care that are more restrictive than limits imposed on access to physical health care.

Prior to 1996, many Americans paid for health insurance that often did not recognize that treatment for mental health and substance use disorders is as essential as other medical treatments. The Mental Health Parity Act of 1996 required that large group health plans could not impose lifetime dollar limits on mental health benefits that were less favorable than the limits imposed on medical and surgical benefits.  Since then, more federal laws related to mental health parity have been passed.

For example, an important provision of the Affordable Care Act (ACA) and the Mental Health and Addiction Equity Act (MHPAEA) in 2008, ensures that health insurance plans treat mental health and substance use disorders (MH/SUD) similarly to how they treat other health conditions. An Amendment to the ACA in 2010, added this requirement of coverage to individual health plans as well. In Illinois, every insurer that offers group accident and health policies providing coverage for hospital or medical treatments or services for illnesses are required to provide coverage for reasonable and necessary treatment and services for mental, emotional, nervous, or substance use disorders or conditions.

The Affordable Care Act require that all health plans offered through the Marketplace cover mental health and substance use disorder services as an essential benefit. You can learn more about this coverage here.  However, grandfathered plans don't have to offer some rights and protections that Marketplace plans do. Check your plan's materials or check with your employer or your health plan's benefits administrator if you are not sure of a plan's grandfathered status.

In 2015, Illinois enacted a new parity law to advance parity implementation and expand on the Federal law. The new law includes important provisions to extend and clarify coverage, educate consumers about their rights, require certain minimum treatment benefits and improve enforcement of the law.

Medicare, Medicaid and the Children's Health Insurance Program (CHIP) are not group health plans or issuers of health insurance. They are public health plans through which individuals obtain health information. These programs services comply with certain requirements of MHPEA and are separate from Get Covered Illinois and the Department of Insurance. For more information about the Centers for Medicare and Medicaid Services visit https://www.cms.gov/.

Recommendations to help navigate your health coverage, as it relates to mental health and substance use disorder treatments:

  • Learn the laws that protect you when you are seeking mental health and substance use disorder treatment.
  • Contact your health insurer for assistance. Find out which doctors are in-network.
  • Understand your health insurance plan and what types of care will need pre-authorization.
  • Know your rights to request an external review for denials, reduction in reimbursement or failure of your insurance company to make a payment.

For questions related to mental health and substance use disorder parity laws, or to talk to someone about concerns related to your plan's compliance, contact the Office of Consumer Health Insurance at 877-527-9431.