Getting Affordable Mental Health Coverage for Employees
Every employer is asked the question at some point: “Does our company plan cover mental health treatment?” If you’re an employer that hasn’t been asked this yet, you will be – so before you get caught in the headlights without a good answer, here’s what you need to know.
Providing affordable mental health coverage is the law, but only if physical health coverage is also provided (which it will be now, thanks to the Affordable Care Act). Many Americans do not realize that there was a law passed in 2008, the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (more commonly known as the “mental health parity law”).
The mental health parity law requires employers who provide health insurance to also cover services for mental health, behavioral health and substance-use disorders – and, it requires that coverage to be comparable to the physical health coverage provided in the plan. How do we know most Americans aren’t familiar with this law? Because the American Psychological Association reports that more than 90 percent of Americans don’t know about it.
Here’s a practical application of the mental health parity law. Say an employer-sponsored healthcare plan includes a $20 copay for office visits to a medical doctor. Under that plan, it would be unacceptable for visits to a mental health professional to require a $40 copay – because that is twice the cost. It’s not on par with the other copay (hence the term “parity”).
Additionally, the law has significantly reduced – maybe even eliminated – annual limits on the number of mental health visits allowed each year. However, employers should note that insurance companies are still allowed to impose limits on visits deemed not “medically necessary.” That’s something to keep in mind.
Because of the mental health parity law, employers need to be connected to a healthcare system that makes it easy to cover mental health treatment. Direct contracting can provide a way to do that, because it involves negotiating the lowest rates directly with providers. GM&A can do this with mental health providers the same way we do with medical service providers. Contact us today to learn more.