Types of Group Plans

• Benefit packages that are provided from the purchase of insurance are known as a fully insured group health plans. Coverage that is paid for directly, without the purchase of a health insurance policy, is known as a self-funded group health plan. The law applies to most types of group health plans that have more than 50 employees.
  
  

Limitations

• The law limits insurance companies from placing an annual or lifetime dollar amount for mental health coverage on group health insurance plans. This means that benefits that are provided cannot be lower or not as favorable as the same benefits that are provided for medical and surgical procedures. The law does not apply to small group health insurance plans or coverage for individual health insurance plans.
  
  

Allowable Restrictions

• The law does allow for certain restrictions to be placed on mental health benefits while still being in compliance with the law. Large group health plans will pay for mental health coverage within the plan network only. Other allowable restrictions include increasing the amount of co-payments and limiting the number of doctor visits for mental health benefits. Insurance companies are also not required to provide coverage for mental health in any health insurance plans that they provide.
  
  

Exceptions

• The law provides limited exceptions to the requirements of group health insurance plans. One exception is that the law's requirements do not apply to small group health plans that have 2 to 50 employees. Another exception is that if a large group health plan's compliance costs increase the company's cost by at least 1 percent, it does not have to provide coverage to plan members.
  
  

Mental Health Parity and Addiction Equity Act

• The MHPAEA becomes effective for large group health insurance plans beginning October 3, 2009. Changes made by the law include prohibiting the use of cost-sharing requirements for mental health and substance use disorder benefits. Large group health insurance plans are also prohibited from limiting coverage for mental health to only in-network providers if out-of-network coverage is available for medical and surgical benefits.
  
  

Requirements

• The requirements for parity that pertain to annual and lifetime dollar amounts for coverage continue with the passage of the MHPAEA and are extended to substance use and disorder benefits. The reasons and standards that a group health insurance plan uses to deny coverage for mental health benefits and substance use disorders must be made available when requested by plan participants.