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“Mental health parity” refers to the concept that insurance companies should not be allowed to discriminate against mental health and substance use treatment in their coverage decisions. Federal law requires companies that cover mental health and substance use treatment to maintain the same level of coverage for and impose no more restrictive limitations on these treatments than they do for physical health benefits.
The initial Mental Health Parity Act was signed into law in 1996, making it illegal for insurers to impose lifetime mental health benefits limits that were lower than those for physical benefits. It was superseded in 2008 by the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act, which extended protections to include the requirement that insurance companies maintain equal coverage for mental health and substance use care and refrain from imposing extra limitations on these treatments. However, the law only applies to larger group health plans (> 50 enrollees), meaning that people who have individual coverage or who are enrolled in smaller employer-paid plans have not been able to benefit.
With the passage and implementation of the Affordable Care Act (ACA), parity is receiving an even greater boost. Under the ACA, mental health parity is included in the Essential Health Benefits.
Beginning in 2014, with the advent of the Health Insurance Marketplaces and expansion of Medicaid coverage, many more people should be able to procure health insurance coverage that appropriately addresses all aspects of health.
For more information about mental health parity, please see: