Health Insurance Claims for Psychological or Psychiatric Treatments
Part 2, Chapter 4: Traditional Individual and Group Plans, Doctors' Bills Page 14
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The act does not guarantee full parity, though, and it does not require insurers to provide coverage for the treatment of mental illnesses. Nor does the act prohibit insurers from including other differences in benefits between reimbursement for the treatment of mental and physical illness. It refers only to yearly and lifetime benefit maximums.
In addition, there are some specific exclusions. First, the act applies only to group insurance plans sponsored by companies that have more than fifty employees. Thus, it does not directly affect individual or small group health insurance policies. Second, if a company can demonstrate that the act results in increased costs of 1% or more, the company may be exempt from the act's requirements. Although those limitations may pose serious problems in some cases, the Mental Health Parity Act nevertheless represents an important step forward.
The Mental Health Parity Act is effective as of January of 1998. Hopefully, it will help to prevent the severe economic difficulties that some people who need treatment for mental illnesses have experienced in the past when they reached the yearly or lifetime benefit maximums.
A number of states have also passed laws dealing with mental health parity. Although those laws may refer to many health insurance policies offered within the particular state, they do not generally affect self-funded plans. The laws differ significantly from state to state. Check with your state Department of Insurance or with NAMI (the National Alliance for the Mentally Ill) to determine whether your state currently has a law that affects parity (See Appendix B).
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