Paying for Treatment: New Jersey Parity Laws

The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, along with other state laws, gives people the right to insurance coverage for behavioral health that’s equivalent with other medical benefits.¹ Behavioral health coverage is defined as services for mental health and substance use disorders.

The law provides that, within the same insurance plan, the level of benefits for both behavioral health and medical coverage must be equal. Parity laws prevent health insurance companies from having one level of benefits for medical coverage and providing lower levels of coverage for behavioral health services. States can add parity laws that apply to their residents.

Do You Have Coverage?

Your parity rights depend on who you get your insurance from:

• Your employer
• Your state’s health exchange marketplace
• A government agency
• On your own

The majority of insurance plans must follow the requirements of the federal parity law, but some plans are excluded. If you’re insured through your job and not sure which type of plan you have, ask the human resources department where you work. If you buy your own insurance and aren’t sure which type of plan you have, contact your insurance company.

The law doesn’t mandate that health insurance plans cover behavioral health treatment, but if they do, it has to be equal with other medical coverage.

What’s Protected Under Federal Parity Law?

The federal parity prevents insurance companies from imposing financial requirements that restrict access to behavioral health care if they don’t impose the same restrictions on other medical care. Items covered include limits on:

• Out-of-pocket expenses
• Copay amounts
• Coinsurance
• Deductibles

Insurance companies can’t impose treatment limitations for behavioral health that don’t apply to other medical care. Items covered include:

• Number of days for inpatient treatment
• Number of outpatient visits
• Pre-approvals
• Requiring you to get treatment in your own state for behavioral health, but not for other types of treatment.

What Are New Jersey Parity Laws?

A 2238/S 1651

This bill added autism coverage to state insurance laws.¹

A 4498/S 2919

This legislation was introduced by New Jersey lawmakers in January 2017. As of this writing, the bill is pending.

The bill proposes changes to state insurance laws about behavioral health coverage.⁴ Specific points include:

• Insurance plans must conform with all the regulations of federal parity laws.
• Certain treatment limitations must be identical with how they are defined in the federal parity law.
• Insurance plans must permit people to use out-of-network providers when there aren’t any in-network providers available.
• Insurance plans must follow the criteria of the American Society of Addiction Medicine when determining if substance use services are medically necessary.⁴
• All NJ insurance plans must submit annual reports proving compliance with the federal parity law.

If your insurance plan applies different limits for behavioral health care services compared to other medical care in any way, it’s possibly a violation of your parity rights. You have the right to file an appeal when you receive a denial of treatment. You may have to go through several levels in the appeals process, so be sure to have all your documents and follow the appeal rules.

References:

1. https://www.cms.gov/CCIIO/Programs-and-Initiatives/Other-Insurance-Protections/mhpaea_factsheet.html
2. http://www.njleg.state.nj.us/2008/Bills/PL09/115_.PDF
3. http://www.njleg.state.nj.us/2016/Bills/S3000/2919_I1.PDF
4. http://www.asam.org/quality-practice/guidelines-and-consensus-documents/the-asam-criteria/about