With the ever-changing economy and face of health insurance, federal and state regulatory bodies are looking for ways to make sure health benefits are fair, non-discriminatory and available.
Given the regulatory changes and new mandates, health insurance companies constantly monitor and modify their offerings and benefits to be compliant with current state and federal rules and regulations.
“Health insurance is a highly regulated industry,” says Judith A. Macro, vice president of corporate services and compliance officer at SummaCare, Inc. “It is essential that health insurers offer health benefits that are compliant with legislation at all times.”
Smart Business spoke to Macro about new legislation effective in 2010, as well as how employers can prepare for the changes.
What federal legislation is new for 2010?
A major change in federal legislation for 2010 is the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act for 2008. The legislation calls for parity of mental health and substance abuse disorders in health plans offered by all fully insured and self-funded employer groups of 51 or more employees. Government entities have the option of opting out of federal parity.
While the act, also known as Federal Mental Health Parity, does not require that a plan or employer group provide mental health and substance abuse benefits, it does require that if these benefits are offered, they be in parity with substantially all medical and surgical benefits. Co-payments, co-insurance and day or visit limitations cannot be any more restrictive than co-payments, co-insurance or day and visit limits applied to other basic health care benefits.
For example, if there’s a $20 co-payment for a medical specialist visit, then the co-payment for an outpatient mental health visit cannot be more than $20. If there are no limits on the number of visits to a specialist, then there cannot be a limitation for outpatient mental health visits or substance abuse disorder visits. Finally, if there is an out-of-network benefit, the plan must also provide an out-of-network benefit for both mental health and substance abuse disorders.
How does the legislation affect employer groups with less than 51 employees?
For fully insured groups with less than 51 employees, state mental health parity applies. This parity provides that biologically based mental illnesses, as required by the Ohio Revised Code, must be in parity with other basic health care benefits. Non-biologically based mental illness and alcohol and substance abuse treatment benefits need not be in parity, but if mental health benefits are offered, a $500 maximum benefit for alcohol abuse treatment is required.
