Insurance denials for substance abuse coverage are becoming more and more common. In a 2015 investigation by the New York Attorney General, findings showed that denials for addiction treatment were “nearly four times as common” for addiction treatment than for medical or surgical care.
However, protections are in place for those who receive addiction and mental health treatment under the Employee Retirement Income Security Act of 1974 (ERISA), and the Mental Health Parity and Addiction Equity Act (MHPAEA) enacted in 2008, which is now a part of ERISA.
ERISA and The Parity Act Explained
The key takeaway for understanding your rights when pursuing coverage from an insurance company for addiction treatment is that the Parity act requires that all people insured through insurance providers or group health plans must receive the same level of benefits to treat both mental health and addiction treatment services that are offered for medical and surgical treatment.
Under MHPAEA, if you are insured, you can sue to enforce ERISA if coverage for substance abuse is denied. In addition, the labor secretary is explicitly authorized to bring a civil action against an insurer that violates the Act.
Denied Coverage? Here’s what you can do.
If you are insured, are seeking insurance coverage for addiction treatment or have received treatment and were denied coverage from your carrier (or were charged higher costs for co-pays or deductibles than medical care), you have the right to sue to enforce ERISA on your behalf.
Some indications that you may have grounds to sue or appeal the decision not to provide coverage are:
- Higher costs for addiction treatment as compared to other medical care.
- Having to call and get permission to get substance abuse treatment covered, but not for other types of health care.
- Getting denied because treatment was not considered medically necessary, but the plan does not answer a request for the medical necessity criteria used to determine this.
- The health plan will not cover residential mental health or substance use treatment or intensive outpatient care, but it does offer comparable coverage for services for other health conditions.
Steps to take to Appeal Coverage Denial
Depending on which type of plan you have, follow these steps to appeal if your addiction treatment coverage is denied:
- Health Insurance Plans through Employer: You must begin with an internal appeals process. If at that point you are not satisfied with the results, you are entitled to request an external review process to keep appealing Contact your state insurance division for help.In addition, you can contact The Federal Center for Medicaid and Medicare Services (CMS). CMS can also enforce parity if states do not enforce the law. Contact the CMS helpline at 1-877-267-2323, extension 6-1565.
- Self-insured plan: If you have a plan where the employer assumes the financial risk for providing health care benefits to its employees, the U.S. Department of Labor (DOL) is authorized to enforce parity in cases of addiction treatment and mental health coverage. Call the DOL’s at 1-866-444-3272 or contact a benefits advisor in one of the DOL regional offices for more information.
- For Medicaid or Medicare Plans: There are different appeals processes for Medicaid and Medicare, so you will need to contact your plan provider for more information.
Addiction treatment coverage is not mandated for all, but chances are there are steps you can take to make sure you are covered to the fullest extent allowed by law, for the treatment you need.
History of ERISA and MHPAEA (or The Parity Act)
ERISA was federally enacted in 1974 to set minimum standards for pension and health plans in private industry, providing protection for participants and beneficiaries covered under these plans. The law instituted several protective measures and assurances related to employee benefits (retirement plans, pensions, welfare benefits, medical insurance, etc.), including:
- Adequate information provided to consumer for all plans
- Managers of plans act in accordance with fiduciary standards of conduct (putting the interests of the plan holder above shareholders)
- Proper reporting and disclosure to both the government and participants
- Provisions that assured benefits were protected and that participants would receive their benefits.
There have been many amendments to ERISA, further extending its reach and protections. The 2008 Mental Health Parity and Addiction Equity Act, specifically relates to coverage for addiction treatment and mental health treatment. The act’s full name is the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act, named after the two senators who fought for its passing for 12 years.
MHPAEA and the Affordable Care Act (ACA)
The Affordable Care Act (ACA) added to the MHPAEA, requiring coverage of mental health and substance use disorder services as one of ten essential health benefits categories. However, with the 2018 repeal of ACA, though the protections of the Parity Act are not removed, it does remove the mandates that Medicaid cover basic mental and behavioral health, including substance abuse treatment.
Considerations & Exclusions
Though ERISA and the Parity Act extends protections to many people, there are a few considerations and exceptions:
- MHPAEA does not mandate that a plan provide addiction treatment or mental health benefits. It simply states that if I plan does provide medical/surgical and addiction treatment and mental health benefits, it must comply with the MHPAEA’s parity provisions.
- MHPAEA does not apply to those selling health insurance policies to companies with 50 or fewer employees or who sell health insurance policies to individuals.