The 1996 amendment to the Health Insurance Reform Act did not pass, so the federal government enacted the Federal Mental Health Parity Act which outlines the provision of mental health benefits which are to be equal to the benefits provided by an insuror for medical illnesses. States are not bound by the Federal Mental Health Parity Act. Many states enacted State Parity provisions. Some did not.

Although the term "mandated" is used, some states have an option whether to provide the benefits or not. In some states, small businesses are exempt from state mandates for mental health coverage. Small, might be defined as less than 50 employees, but in some states it means less than 15 employees.

While some states mandate coverage, they may have some leeway in the amount of the co-pay, type of provider, deductibles or out-of-pocket limits they set.

Some insurors will state that only "medically necessary" treatment will be covered. Often, this term refers to arbitrary definitions of what is "medically necessary". We have not heard of many problems related to the application of this term.

Some insurors will pay full benefits only for "biologically based" brain disorders. Since it is estimated that 80% of problems are biologically based, clients are usually eligible for benefits under this limitation.

Mandates mean that insurance coverage for mental health problems must be offered under the same terms and conditions as coverage for other physical health problems. Back to top