Know Your Rights

State and federal parity laws aim to create fairness in insurance coverage for mental health and addiction treatment by requiring that coverage is equal to physical health coverage. The federal and state laws provide different levels of protection and different rights. For plans that are covered by both laws, any stronger protections in Maryland Law supersede the Federal Law.

In order to fully understand your rights, it is important to know what type of insurance plan you have. Not all plans are covered by parity laws and some plans are covered by only the state or only the federal law. Read more about your Insurance Plan.

Federal Law

Coverage Requirements

The Federal Parity Law does NOT require that insurers offer mental health or addiction coverage. Instead it requires that if an insurer offers ANY mental health or addiction benefits, the coverage must be equal to medical/surgical benefits.

To enforce this, benefits are placed into six areas for comparison purposes:

If a health plan has mental health or addiction benefits in ANY of the six areas, it must offer benefits in ALL of the areas where medical or surgical benefits are offered.


Limits on Visits, Days, or Copayments

In order to make sure benefits are equal for mental health and addiction medical/surgical, there are specific regulations that address how plans can limit your access to treatment. Examples of these limits are familiar to us all:

  • Limit on the number of visits you can make in one year
  • Limit on the number of days you can stay in the hospital
  • Amount of your copayment each time you visit your provider
  • Amount of money you pay for each service (testing, prescriptions, etc.)

The law does NOT ALLOW limits for your mental health or addiction treatment benefits that are separate from your medical or surgical treatment. It also does NOT ALLOW any limits on mental health/addiction treatment that are more restrictive than for medical/surgical treatment.

The exact regulatory language which defines the standard for determining any violations in this area is, “Any quantifiable treatment limitation must be than the requirement or limitation that is applied to medical/surgical benefits.”


Other Limits on Treatment

Plans often have other ways they may limit access to care that aren’t as simple as limits on visits or co-payments. How a plan determines if your treatment was medically necessary; if this review is done before, during, or after treatment; the amount of money the plan pays its network providers for specific services; and the number of providers on its in-network panels are examples of these other types of limits.

The Federal Parity Law addresses these complicated limits by requiring that they be comparable to the medical/surgical limits and no more strictly applied to mental health/addiction benefits.

The exact regulatory language is, “Any nonquantifiable treatment limitation must be comparable and no more stringently applied for mental health/addiction than for medical/surgical benefits.”

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Appeal and Disclosure Rights

The Federal Parity Law also grants consumers and providers rights not related to limits on treatment. These rights require that insurers provide you with certain information when treatment is denied or coverage changes are made.

  • Insurers must disclose the criteria used for medically necessary determinations to consumers and providers upon request and provide an explanation for how it is applied. This is important because many treatment denials are based on this determination.
  • Insurers must provide the reason for any denial of treatment in writing and free of charge. The insurer must send this upon denial but also upon request by a provider or consumer.
  • If a plan decides to no longer offer mental health or addiction benefits, they must notify members immediately.

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These include overnight or longer stays at a hospital or other facility that is part of your plan network.
These include visits to a mental health/addiction provider that is a member of your insurance plan.
These include overnight or longer stays at a hospital or other facility that isn’t part of your network.
These include visits to a provider who is not a member of your insurance plan.
These include visits and any treatment you receive in the emergency department at a hospital.
This includes coverage for medications prescribed by your provider. Insurance plans often create a preferred drug list, which includes generic medicines as the cheapest and most preferred type of prescription.
If a plan covers outpatient visits to your family doctor for depression medication management (plans has a mental health benefit in one of the six areas) and covers hospital stays for surgery, then it must also provide inpatient stays for mental health and addiction. If the plan provides out of network, outpatient coverage for a physical therapist, then it must provide out-of-network, outpatient coverage for visits to your mental health provider.
You can’t be made to pay a higher copay for visits to your mental health or addiction provider than for your medical provider or be allowed to visit your mental health provider fewer times than your medical/surgical provider.
Parity regulations clarify this as, If a restriction is applied to substantially all the benefits and it is the predominate standard it can be applied no more restrictively to the mental health or addiction benefits than the medical/surgical benefits. For example, A plan may not make a determination that no mental health inpatient treatment is covered due to lack of medically necessity, but provide panel review to determine the medical necessity of inpatient treatment for medical/surgical benefits.
The parity regulations define “predominant” as a requirement or limit applied to 50% of
medical/surgical spending in a category. Requirements or limitations for one medical/surgical benefit in
a category do not qualify as predominant. For example, a plan may not implement visit limitations for
all mental health or addiction inpatient treatment if it only limits orthopedic inpatient treatment on the
medical/surgical side.
The parity regulations define “substantially all” as 2/3 of the benefits in one of the six categories of benefits. If 2/3 of the inpatient, in-network medical/surgical benefits are subject to a 20% co-insurance requirement, then inpatient, in-network mental health/addiction benefits cannot be subject to more than 20%.
The regulations set up a specific formula that must be used to determine if a quantifiable treatment limitation (visit limits, copayments, etc.) is allowed. It states that in order to have a specific limit for mental health/addiction, such as limits on visits, this limit must be applied to 2/3 of medical benefits in the category. If it isn’t, then it is not allowed. If it is, then in order to determine how strict the limit can be, another number is used. The level applied to mental health/addiction treatment must be no stricter than what is applied to 50% of the medical/surgical benefits in that category.
Plans cannot require that all mental health outpatient treatment be approved BEFORE the visits if they do not require the same thing for outpatient medical/surgical care. This practice is often called prior or pre authorization.
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Maryland Law

The Maryland Parity Law passed in 1993 applies only to large group fully insured plans and individual or self-employed plans purchased in Maryland. Read More About Your Insurance Plan

For those plans covered by this law, consumers are entitled to:

  • INPATIENT COVERAGE: At least the same number of days for mental health/addiction inpatient care as are covered for medical/surgical care for both large group fully insured and individual/self employed plans
  • OUTPATIENT COVERAGE:

For large group fully insured plans:

Coverage for outpatient mental health/addiction visits must be equal to medical/surgical visit coverage, including diagnostic testing

For individual and self employed plans:
80% for first 5 visits in a calendar year
65% for the 6th through 30th visit in a calendar year
50% for the 31st and subsequent visits in a calendar year
EXCEPT: Insurance coverage of outpatient visits for medication management for mental health and addiction must be the same as for medical health

  • PARTIAL HOSPITALIZATION: At least 60 days for partial hospitalization for both large group fully insured and individual/self employed plans
  • COST SHARING: No discrimination in cost-sharing for inpatient or outpatient visits or separate deductible, lifetime, or annual out-of-pocket limits for both large group fully insured and individual/self employed plans

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