- What types of health insurance policies and plans are required to provide mental health benefits under Connecticut’s insurance laws and the ACA?
Connecticut’s mental health laws extend protections to Connecticut individual health insurance policies and fully insured Connecticut group health insurance policies of all sizes (small and large employers). Policies providing coverage for hospital expense coverage, medical-surgical expense coverage, and major medical expense coverage, as well as HMO hospital and medical coverage agreements, that are issued in Connecticut, must include these important safeguards.
Further, effective in 2014 ACA requires, with limited exceptions, that individual and small employer health insurance plans must include ten Essential Health Benefits including mental health and substance use disorder services. (See Answer 6. for more information).
- What benefits and protections must be provided in policies under Connecticut insurance laws?
Plans subject to Connecticut laws must contain two primary requirements:
- The policy must cover mental health benefits, meaning that mental health benefits cannot be excluded from the policy.
- The policy cannot establish any terms, conditions or benefits that place a greater financial burden on an individual to obtain mental health benefits than for diagnosis and treatment of medical benefits.
- How is the term “mental and nervous conditions” defined under Connecticut insurance laws?
The term is broadly defined to include all mental disorders included in the most recent edition of the “Diagnostic and Statistical Manual of Mental Disorders” published by the American Psychiatric Association. The publication is a comprehensive up-to-date list and classification of all mental disorders in the U.S. for both adults and children and is widely used throughout the country by mental health professionals.
- What conditions would not qualify as mental and nervous conditions under Connecticut insurance laws?
The following conditions are not covered: (1) mental retardation, (2) learning disorders, (3) motor skills disorders, (4) communication disorders, (5) caffeine-related disorders, (6) relational problems, and (7) additional conditions that may be a focus of clinical attention, that are not otherwise defined as mental disorders in the most recent edition of the American Psychiatric Association’s “Diagnostic and Statistical Manual of Mental Disorders.”
- What laws apply to self-insured plans?
State insurance laws only apply to insured plans and not to (employer) self-insured plans. However, self-insured plans are subject to the federal requirements. The federal Paul Wellstone and Pete Domenici Mental Health and Addiction Parity and Addiction Equity Act of 2008 (MHPAEA) applies to employers of 51 or more employees. This law does not require an employer to provide mental health benefits, but generally provides that if an employer chooses to provide mental health benefits (and most do), it must do so on a parity basis with medical benefits. The U.S Department of Labor has jurisdiction over private sector self-insured plans, and the Center for Medicare and Medicaid Services has jurisdiction over self-insured government (state and municipal) plans.
- What other federal laws provide protection for mental health benefits?
In addition to MHPAEA referenced in 5 above, which applies to employers with 51 or more employees, the federal Affordable Care Act (ACA) now contains requirements which apply to individual and small group plans. Under the ACA new individual and small group plans issued on and after January 1, 2014 must include “Essential Health Benefits” as required by the ACA. “Essential Health Benefits” includes mental health benefits which must be provided on a parity basis. The effect of this ACA change is that the federal mental health parity rules now apply to individual plans and virtually all employer plans (small and large group). There are narrow exceptions to the federal rules, including for grandfathered individual and grandfathered small group plans. Grandfathered plans are those in existence when the ACA passed on March 23, 2010 which have not been substantially amended since then.
- What are some of the features of the federal mental health parity law (MHPAEA)?
MHPAEA requires that insurers meet mental health parity standards in two areas, quantitative limits and non- quantitative limits as they relate to benefit design and treatment limitations.
- What are Quantitative Treatment Limitations?
Health insurers generally cannot impose a financial requirement (such as a copayment or coinsurance) or a quantitative treatment limitation (such as a limit on the number of outpatient visits or the number of impatient days covered) on mental health or substance abuse disorder benefits that is more restrictive than the financial requirement or quantitative treatment limitations that apply to at least 2/3 of medical/surgical benefits in the same classification. MHPAEA requires that mental health parity analysis must be done by classification type. These classifications are defined as: (1) inpatient/in-network; (2) inpatient/out-of-network; (3) outpatient/in-network; (4) outpatient/out-of-network; (5) emergency care and (6) prescription drugs.
- What are Non-Quantitative Treatment Limitations (NQTLs)?
Under MHPAEA, certain utilization review, prior authorization and plan provisions may only be applied to mental health or substance abuse benefits if they are meet the standards for the “comparable to and applied no more stringently than the limitations applied to medical/surgical benefits” rule.
Policy provisions that are subject to these standards include:
- Medical management standards limiting or excluding benefits based on medical necessity or medical appropriateness, or based on whether a treatment is experimental or investigative;
- Formulary design for prescriptions drugs;
- Standards for provider admission to participate in network, including reimbursement rates for contracted providers;
- Plan methods used to determine usual, customary, and reasonable fee charges (for out-of-network benefits);
- Refusal to pay for higher-cost therapies until it can be shown that a lower-cost therapy is not effective (also known as fail-first policies or step therapy protocols);
- Exclusions based on failure to complete a course of treatment;
- Network tier design;
- Restrictions based on geographic location, facility type, provider specialty; and
- Other criteria that limit the scope or duration of benefits for services provided under the plan.
Important Note: The NQTL provisions referred to above are not prohibited outright, but are prohibited if they are applied more stringently to mental health benefits than to medical/ surgical benefits.
- What can I do if I have further questions about mental health parity or the mental health benefits under my health insurance policy or HMO coverage?
Consumers interested in having the Connecticut Insurance Department review an insurance complaint or consumers who have questions about their individual insurance situation, may contact us for assistance:
Frequently Asked Questions on Mental Health Parity
Rights under your Health Insurance Plan
The Connecticut Insurance Department wants to provide consumers with information about Connecticut’s insurance laws on mental health parity as well as the applicable federal laws including the Affordable Care Act (ACA) federal health care reform legislation and the Paul Wellstone Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). Connecticut has had mental health parity insurance laws in effect for specified individual and group health insurance policies since 2000.
Below are questions and answers that the Department hopes will help consumers to better understand their rights to mental health benefits under health plans.