While many people often think of only their physical health needs when evaluating health insurance plans, the Affordable Care Act (ACA) requires all plans that are sold on the individual or family health insurance marketplaces to include certain coverage for mental health needs. Employer-sponsored plans are generally subject to the requirements of the Mental Health Parity and Addiction Equity Act (MHPAEA), which also requires these plans to provide mental health coverage.1
With the COVID-19 pandemic increasing feelings of isolation, depression, and anxiety, taking care of one's mental health has become even more crucial over the past year. Below, we will discuss the requirements for mental health care coverage from both employer-sponsored and ACA plans.
Coverage Caps and Limits
The Mental Health Parity Act of 1996 prevented large group employer plans from capping annual or lifetime benefits.2 But before the ACA was enacted, many health insurers that offered smaller group and individual plans were not required to offer plans that covered mental health care. Even plans that did offer mental health care coverage often placed an annual or lifetime cap on benefits, cutting off coverage once a certain dollar amount was reached. This meant that treatment for conditions like addiction or severe depression could cost tens or even hundreds of thousands of dollars out of pocket, severely limiting many individuals' access to mental health care.
In the decade that the ACA has been in place, insurance companies have not been allowed to place annual or lifetime limits on coverage. Additionally, insurance providers must cap out-of-pocket spending. Insurance plans also cannot deny coverage or charge a higher rate based only on a patient's pre-existing mental health condition. This brings individual and small group plans more in line with larger group plans, which have offered this level of mental health coverage for some time.
What Mental Health Care Services Must Be Covered?
Large employers (defined as those with 100 or more employees), medium employers (51-99 employees), and small employers (50 or fewer employees) must offer health plans that meet certain ACA requirements.3 These plans must include:
· Behavioral treatment like outpatient counseling, group therapy, psychological testing and evaluation, and medication management therapy;
· Substance use disorder treatment like outpatient diagnostic/treatment, inpatient detox, and substance abuse recovery counseling and education; and
· Mental and behavioral health inpatient treatment, which primarily includes coverage for hospitalization at a psychiatric facility.
Now that COVID-19 has made it more difficult for many patients to physically see a doctor or mental health professional, many plans have expanded their coverage to also include telephone support lines, telehealth counseling or therapy appointments, and other virtual resources like blogs, chat rooms, and webinars.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor. 1 https://www.cms.gov/CCIIO/Programs-and-Initiatives/Other-Insurance-Protections/mhpaea_factsheet 2 https://www.ehealthinsurance.com/resources/individual-and-family/mental-health-coverage-in-us-health-plans 3 https://www.ncsl.org/documents/health/aca_requirements_for_employers.pdf
 Does the Affordable Care Act cover individuals with mental health problems? | HHS.gov  Mental health and substance abuse health coverage options | HealthCare.gov  Lifetime & Annual Limits | HHS.gov  https://www.hhs.gov/answers/affordable-care-act/can-i-get-coverage-if-i-have-a-pre-existing-condition/index.html  Health Insurance Providers Respond to Coronavirus (COVID-19) - AHIP
Sources Does the Affordable Care Act cover individuals with mental health problems? | HHS.gov Mental health and substance abuse health coverage options | HealthCare.gov Health Insurance Providers Respond to Coronavirus (COVID-19) - AHIP
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