What is the Parity Act?

The Mental Health Parity and Addiction Equity Act of 2008 requires parity in financial requirements (reimbursement rate calculations, co-pays, deductibles, etc.) and treatment limitations (level of care restrictions, day limits on treatment, etc.) between mental health and addiction benefits and medical/surgical benefits for most health plans.

An important provision requires mental health and addiction benefits, generally,  to be no more restrictive than medical/surgical benefits.

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The Parity Act

how it applies and how we enforce it

Benefits for mental health and substance use disorder services are an essential and often lifesaving component of health coverage. These benefits provide security and enable individuals to seek care they might not otherwise be able to receive. For many years, however, most health coverage options failed to provide equal treatment for mental health and substance use disorder treatment compared to treatment for physical health conditions.

Recognizing this disparity, on October 3, 2008, Congress enacted the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), which supplemented the Mental Health Parity Act of 1996. MHPAEA generally requires that coverage for health care services for mental health and substance use disorders be comparable to – or in parity with – coverage for services for general medical and surgical care. Generally, the Federal parity law and regulations aim to eliminate overly burdensome restrictions health plans placed on mental health and substance use disorder coverage – like higher copayments, separate deductibles, lower annual visit limits, and techniques on how care is managed (such as pre-authorizations or medical necessity reviews) that are more restrictive than those placed on medical and surgical benefits.


Insurers have never fully complied

A recent study by Columbia University found that commercial health insurers, on average, cover only 20% of addiction treatment costs while paying over 55% of medical and surgical costs.

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In 2017, the Department of Labor found Parity violations in 49% of employer group health plans [source]. Some analysts predict this number may rise as high as 73%.


There are 2.2 million employer group health plans in the United States covering 130.8 million subscribers and their dependents


These 2.2 million plans administer assets in excess of $8.7 trillion dollars.  The insurers have  deep pockets to settle reimbursement actions.

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