Parity for Mental Health Coverage

Parity is legally recognizing mental health conditions and substance use as equal to physical illnesses. Without parity mental health treatment is often covered at far lower levels in health insurance policies than physical illness, which means people do not get the care they need to experience recovery.

Health Plans Subject to Federal Parity

About one-half of all covered Americans are enrolled in large self-insured health insurance plans that are subject to federal parity. The federal parity law doesn’t require plans to offer coverage for mental health or substance use, but if they are covered, then the law requires that coverage is equal with coverage for other health conditions.

The federal parity law also applies to all plans available through state and federal health insurance marketplaces. State-regulated group health plans must continue to follow state requirements to provide coverage of specific (or all) mental health and/or substance use disorders.

Health Plans Subject to State Parity

Federal parity replaces state law only in cases where the state law “prevents the application” of federal parity requirements. For example, if a state law requires some coverage for mental health disorders, then the federal requirement of equal coverage will replace the “weaker” state law.

However, if a state’s parity law is stronger than the federal parity law, then health insurance plans regulated in that state must follow state laws. For example, if state law requires plans to cover mental health conditions, then they must do so, even though federal parity makes covering mental health benefits optional.

Where Does NAMI Stand?

  • The adoption of parity laws in states that cover all mental illness with a broad array of treatment and supports and requires inclusion of mental health care in all insurance plans sold in the state.
  • Assertive enforcement of parity by the U.S. Departments of Labor and Health and Human Services and state insurance commissioners.
  • Enforcement of the federal parity requirement for all health plans sold through state, federal or partnership Health Insurance Marketplaces.