Mental Health Parity Law: What is it?

Mental Health Parity and Addiction Equity Act (MHPAEA) “Parity Act”

Passed in 2008, MHPEA is a federal law that generally prevents group health plans and health insurance issuers that provide mental health or substance use disorder (MH/SUD) benefits from imposing less favorable benefit limitations compared to medical/surgical benefits. It brought mental health and addiction treatments up to par with medical surgical. MHPEA ended discrimination in mental health & addiction insurance coverage where some patients experienced:

  • Additional financial requirements (co-pays and forced to use out-of-network providers)
  • Stricter medical necessity criteria
  • Burdensome prior authorizations process
  • Treatment limitations or fail first treatment options have to be exhausted.