The high-voltage debate over health care reform has consumed headlines in recent months, but employers shouldn’t overlook a more immediate change: The Mental Health Parity and Addiction Equity Act that takes effect next month will mandate new coverage limits—and potentially lead to higher costs.
Beginning with health plans that renew on or after Oct. 3, the law requires that coverage for any mental health services offered by your plan to be at least on par with your medical coverage.
That means deductibles, co-pays, cost-sharing, out-of-pocket limits and treatment limits must be the same for the mental health coverage you offer as they are for physical conditions. The law applies to group health and self-insured plans that cover 50 or more employees.
Insurance experts predict this will push up employer health premiums by 1% to 2% for the average plan. Some plan costs could rise much more steeply.
Advice: Start discussing the implications of the law with your insurance carrier or broker right away. Most employer-provided health plans renew on Jan. 1, so you probably have time to work with your carrier or broker to integrate your plan coverage.
4 steps to prepare
According to Steve Melek, an actuary with Milliman Inc. and an expert on mental health parity, here are the steps you’ll need to take to prepare for the change:
1. Evaluate how employees have used your existing mental health coverage. How much have you been spending per year? Which conditions have been covered? Can you spot any utilization patterns?
2. Catalog your utilization history. Having an inventory of claims for therapist visits and prescription drug claims, for example, will help you set benchmarks and decide whether you need to offer more coverage.
3. Review your existing carrier’s network of mental health services providers. Is it adequate for your employees’ needs?
4. Consider who should provide mental health coverage. Do you want to have your medical insurance carrier also provide mental health coverage, or should you look at coverage from a separate provider?
For more details, find a link to Melek’s white paper, Preparing for Parity, at www.theHRSpecialist.com/mentalparity.