The Mental Health Parity and Addiction Equity Act of 2008 takes effect beginning Oct. 3, ushering in a new era of health insurance coverage—and potentially higher costs for employers.
That’s why it’s crucial to start discussing the implications of the law with your insurance carrier or broker right away.
Beginning with insurance plans that renew on or after Oct. 3, the law requires coverage for any mental health services your plan offers to be at least on a par with your medical coverage. That means deductibles, copays, cost sharing, out-of-pocket limits and treatment limits must be the same for the mental health coverage you offer as they are for physical conditions.
It applies to group health and self-insured plans that cover 50 or more employees.
For most employers (and employees), health insurance premiums will increase modestly—maybe 1% or 2%. But some plan costs could go up much more.
Most employer-provided health plans renew on Jan. 1, so you probably have time to work with your carrier or broker to integrate your plan coverage.
According to Steve Melek, an actuary with Milliman, Inc., and an expert on mental health parity, here are the steps you’ll need to take to prepare for the change:
1. Assess your risk exposure. It might not be too bad. Melek says, “Emerging research indicates that there can be a positive return on investment to integrating physical and behavioral care.”
2. Evaluate how employees have used your existing mental health coverage. How much have you been spending per year? Which conditions have been covered? Can you spot any utilization patterns?
3. Catalog your utilization history. Having an inventory of claims for therapist visits and prescription drug claims, for example, will help you set benchmarks and decide whether you need to offer more coverage.
4. Review your existing carrier’s network of mental health services providers. Is it adequate for your employees’ needs?
5. Finally, consider who should provide mental health coverage. Do you want to have your medical insurance carrier also provide mental health coverage, or should you look at coverage from a separate provider?
Melek has prepared a white paper discussing the new law in detail. You can download “Preparing for parity: Investing in mental health” for free.
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