Actuaries have been testing employer-sponsored health plans for mental health parity and have found that most of them are failing, according to Sara Teppema, staff fellow for Society of Actuaries, Schaumburg, Illinois.
The tests come as employers prepare to implement the Mental Health Parity and Addiction Equity Act, a statute signed into law by President George W. Bush in 2008 that requires group health plans with more than 50 employees to cover treatment for mental illness or substance abuse on the same terms and conditions as all other medical illnesses.
Under the new act, financial requirements such as deductibles, copayments or coinsurance, and treatment limitations–such as frequency of treatment, number of visits or days of coverage–may be no more restrictive for behavioral health care than for general medical care.
“The idea is that mental health benefits need to be as good as or better than medical benefits,” Teppema says.
There are 6 classifications of benefits being used to determine whether a plan satisfies the parity requirements, including inpatient in-network, inpatient out-of-network, outpatient in-network, outpatient out-of-network, emergency care, and prescription drugs.
“Testing is a complicated and complex process,” says Teppema. “A lot of employers think that they meet parity, but a vast majority of employer plans are not passing the test,” she adds.
Although the regulation does not require employers’ plans to cover mental health or substance use benefits, employers that choose to do so must provide these benefits in all classifications in which medical and surgical benefits are provided, or on a “substantially all” basis, Teppema says.
Employers’ plans that do not meet these regulations will need to make changes in order to meet parity, Teppema says. One option that employers may be likely to adopt is to make mental health benefits more generous, which would lead to premium increases, Teppema adds. Another possibility is changing the medical plans by getting rid of copayments.
High-deductible medical plans are more likely to pass the parity test, and health maintenance organizations tend to be passing because they have low coinsurance for both mental and medical expenses, Teppema noted.
MHPAEA is set to take effect July 1.