November 6, 2009
REQUIRED INSURANCE COVERAGE FOR MENTAL HEALTH SERVICES
By: Janet L. Kaminski Leduc, Senior Legislative Attorney
You asked for a summary of Connecticut's law that requires insurance policies to cover mental health services on the same basis as other medical conditions (i.e., parity).
Under Connecticut law, individual and group health insurance policies delivered, issued, renewed, amended, or continued in Connecticut must cover the diagnosis and treatment of “mental or nervous conditions.” The law prohibits a policy from establishing any provisions that place a greater financial burden on an insured for the diagnosis or treatment of mental or nervous conditions than for the diagnosis or treatment of medical, surgical, or other physical health conditions. This report details the mental health coverage required under Connecticut law.
Due to federal law, state insurance benefit mandates do not apply to self-insured benefit plans (see OLR Research Report 2005-R-0753 for more information).
There is also a federal mental health parity law that applies to large group plans (over 50 members), whether or not the plans are self-insured. This report provides an explanation of the federal Mental Health Parity Act of 1996 and the Mental Health Parity and Addiction Equity Act of 2008. A full description of the federal requirements is enclosed and is at http://www.cms.hhs.gov/healthinsreformforconsume/04_thementalhealthparityact.asp.
A fully-insured, large group plan is subject to both federal and state law. It appears that the federal law acts as a floor (i.e., it provides minimum requirements upon which a state may build). Because the state law results in richer—more favorable—benefits from an insured person's perspective, such a group is prohibited from imposing any policy terms or conditions that place a greater financial burden on mental health benefits than on medical and surgical benefits.
According to the Connecticut Insurance Department, if a group policy issued or delivered in Connecticut and subject to the state law applies a visit limitation for mental health services that is not applied similarly to medical services, the limitation is not consistent with the requirements of CGS § 38a-514(b). Debra Korta, department spokesperson, wrote in a November 5, 2009 e-mail to OLR:
For instance, if there is a fixed number of visits per year to a mental health provider, but not to a medical provider, that is problematic under our Connecticut law. However, if the limits are based on a utilization review determination of medical necessity which applies to medical and mental health both, this would not violate our law. Denials based on medical necessity, however, can be sent to the Department for an external appeal.
The Insurance Department's consumer affairs division is available to assist with consumer concerns and complaints regarding insurance policies issued in Connecticut. They may be contacted for assistance at (860) 297-3900 or 1-800-203-3447.
CONNECTICUT LAW: MENTAL OR NERVOUS CONDITIONS
Under Connecticut law, all individual and group health insurance policies delivered, issued, renewed, amended, or continued in Connecticut as of January 1, 2000 must cover the diagnosis and treatment of mental or nervous conditions (CGS §§ 38a-488a and 38a-514). The law defines “mental or nervous conditions” as mental disorders, as it is used in the most recent edition of the American Psychiatric Association's Diagnostic and Statistical Manual of Mental Disorders (DSM, currently DSM-IV). But it specifically excludes coverage for (1) mental retardation; (2) learning, motor skills, communication, and caffeine-related disorders; (3) relational problems; and (4) additional conditions not otherwise defined as mental disorders in the DSM.
Parity. The law prohibits a policy from establishing any provisions that place a greater financial burden on an insured for the diagnosis or treatment of mental or nervous conditions than for the diagnosis or treatment of medical, surgical, or other physical health conditions (CGS §§ 38a-488a(b) and 38a-514(b)).
Providers and Facilities. Benefits payable under the law include services the following providers and facilities provide to diagnosis or treat mental or nervous conditions:
● Licensed physician, including psychiatrist
● Licensed psychologist
● Licensed clinical social worker
● Independent social worker certified before October 1, 1990
● Licensed marital and family therapist
● Marital and family therapist certified before October 1, 1992
● Licensed or certified alcohol and drug counselor
● Licensed professional counselor
● Licensed hospital or clinic
● Child guidance clinic
● Residential treatment facility
● Nonprofit community mental health center
● Nonprofit licensed adult psychiatric clinic
Residential Treatment Facility. Effective January 1, 2009, PA 08-125 expanded the benefits payable under a group health insurance policy for treatment received in a residential treatment facility by (1) eliminating a three-day hospital stay prerequisite for a child or adolescent with a serious mental illness and (2) extending these benefits to adults (CGS § 38a-514(k)).
The act requires benefits to be payable under group health policies, including HMO contracts, for treatment an insured person receives while confined at a residential treatment facility when he or she:
1. has a serious mental or nervous condition (one that substantially impairs the person's thoughts, perception of reality, emotional process, or judgment or grossly impairs his or her behavior) and
2. a physician, psychiatrist, psychologist, or clinical social worker has assessed the person and determined that he or she cannot appropriately, safely, or effectively be treated in an acute care, partial hospitalization, intensive outpatient, or other outpatient setting.
Additionally, benefits payable for treatment received in a residential treatment facility must be based on an individual treatment plan (i.e., a treatment plan a physician prescribes that has specific attainable goals and objectives appropriate to both the patient and the program's treatment modality).
Benefits Can Be in a Separate Policy
By law, a group health insurance policy may exclude the benefits required for mental or nervous conditions if they are included (i.e., covered under) a separate policy (CGS § 38a-514(j)).
CONNECTICUT LAW: BIRTH-TO-THREE
Individual and group health insurance policies must cover medically necessary early intervention services for a child from birth until age three that are part of an individualized family service plan. Coverage is limited to $6,400 per child per year, up to $19,200 for the three years (CGS §§ 38a-490a and 38a-516a). (Effective October 6, 2009, PA 09-3, Sept. Sp. Sess., increased these coverage amounts from $3,200 and $9,600, respectively.)
CONNECTICUT LAW: AUTISM SPECTRUM DISORDERS
2009 Public Act
Effective January 1, 2010, PA 09-115 requires a group health insurance policy to cover the diagnosis of an autism spectrum disorder (for children and adults) and expands the requirements on insurers to cover treatment of these disorders. The act defines “autism spectrum disorders” as the pervasive developmental disorders set forth in the most recent edition of the DSM, including autistic disorders, Rett's disorder, childhood disintegrative disorder, Asperger's disorder, and pervasive developmental disorder not otherwise specified.
For purposes of its provisions and the definition of “medical necessity,” the act considers an autism spectrum disorder an illness. The act defines “diagnosis” as the medically necessary assessment, evaluation, or testing a licensed physician, psychologist, or clinical social worker performs to determine if a person has an autism spectrum disorder. It specifies that a diagnosis is valid for at least 12 months, unless a licensed physician, psychologist, or clinical social worker decides a shorter period is appropriate or changes the insured's diagnosis.
The act specifies that it is not to be interpreted as limiting or affecting (1) other covered benefits under the policy, the state mental and nervous condition insurance law, and the birth-to three coverage law; (2) a board of education's obligation to provide services to an autistic student under an individualized education program in accordance with law; or (3) any obligation imposed on a public school by the federal Individual with Disabilities Education Act (20 USC § 1400).
The act also specifies that it must not be interpreted to require a group health insurance policy to reimburse special education and related services provided to an insured under state law that requires boards of education to provide special education programs and services unless state or federal law requires otherwise.
Coverage and Conditions
The act requires a group health insurance policy to cover:
1. direct and consultative psychiatric and psychological services;
2. physical, speech, and occupational therapy services a licensed physical, speech and language, and occupational therapist provides, respectively;
3. prescription drugs a licensed physician, physician assistant, or advanced practice registered nurse prescribes to treat autism spectrum disorder symptoms and co-morbidities, to the extent the policy covers prescription drugs for other diseases and conditions; and
4. for children under age 15, behavioral therapy.
Under the act, in order for the policy to cover these treatments, they must be (1) medically necessary, (2) identified and ordered by a licensed physician, psychologist, or clinical social worker for an insured person diagnosed with autism; and (3) based on a treatment plan. A licensed physician, psychologist, or clinical social worker must have developed the treatment plan following a comprehensive evaluation or reevaluation of the insured.
The act specifies that the coverage it requires may be subject to the other general exclusions and limitations of the group health insurance policy, including (1) coordination of benefits, (2) participating provider requirements, (3) restrictions on services provided by family or household members, and (4) case management provisions. But any utilization review must be performed in accordance with the act.
Behavioral Therapy. The act allows a policy to limit the coverage for behavioral therapy to a yearly benefit of (1) $50,000 for a child who is less than nine years of age, (2) $35,000 for a child between nine and 13 years of age, and (3) $25,000 for a child age 13 or 14.
The act defines “behavioral therapy” as any interactive behavioral therapy derived from evidence-based research. It includes applied behavior analysis, cognitive behavioral therapy, or other therapies supported by empirical evidence of the effective treatment of individuals diagnosed with an autism spectrum disorder that are (1) provided to children under age 15 and (2) provided or supervised by (a) a behavior analyst certified by the Behavior Analyst Certification Board, which is a nonprofit professional credentialing organization, (b) a licensed physician, or (c) a licensed psychologist. Supervision involves at least one hour of face-to-face supervision of the autism services provider for each 10 hours of behavioral therapy provided.
Applied Behavioral Analysis. The act defines “applied behavioral analysis” as designing, implementing, and evaluating environmental modifications using behavioral stimuli and consequences, including direct observation, measurement, and functional analysis of the relationship between environment and behavior, to produce socially significant improvement in behavior.
The act authorizes an insurer, HMO, hospital or medical service corporation, or fraternal benefit society to review an autism treatment plan's outpatient services in accordance with its utilization review requirements, but not more often than once every six months, unless the insured's licensed physician, psychologist, or clinical social worker agrees a more frequent review is necessary or changes the insured's treatment plan.
The act prohibits a group health insurance policy from:
1. limiting the number of visits to an “autism services provider” (a person, entity, or group that provides treatment for autism spectrum disorders) on any basis other than a lack of medical necessity or
2. imposing a coinsurance, copayment, deductible, or other out-of-pocket expense that places a greater financial burden on an insured for access to the diagnosis and treatment of an autism spectrum disorder than for the diagnosis and treatment of any other medical, surgical, or physical health condition under the policy.
Mental Health Parity Act of 1996
The federal Mental Health Parity Act of 1996 (MHPA) applies to large group health plans, whether self or fully insured. It does not apply to small group health plans or health insurance coverage in the individual market. A large group is defined as one with more than 50 workers.
For plans subject to the MHPA of 1996, “parity” does not mean that exactly the same coverage has to be provided for mental health as other medical services. Rather, the federal law prohibits a large group benefit plan from placing annual or lifetime dollar limits on mental health benefits that are lower—less favorable—than annual or lifetime dollar limits for medical and surgical benefits offered under the plan.
Under MHPA, a large group plan may:
1. cover mental health services within network only, even though the plan will pay for out-of-network services for medical and surgical benefits;
2. increase co-payments or limit the number of visits for mental health benefits;
3. impose limits on the number of covered visits, even if the plan does not impose similar visit limits for medical and surgical benefits; and
4. have different cost-sharing arrangements, such as higher coinsurance payments for mental health benefits, as compared to medical and surgical benefits.
Mental Health Parity and Addiction Equality Act of 2008
On October 3, 2008, the U.S. president signed the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). The act revises the MHPA of 1996 and is generally effective for plan years beginning after October 3, 2009.
Under MHPAEA, a large group health plan that includes mental health benefits is prohibited from imposing financial requirements (e.g., deductibles and co-payments) or treatment limitations (e.g., number of visits or days of coverage) that are more restrictive than the predominant financial requirements and treatment limitations imposed on substantially all medical and surgical benefits. Mental health benefits cannot be subject to any separate cost sharing requirements or treatment limitations that apply only to those benefits. And if a group health plan includes out-of-network medical and surgical benefits, it must also provide out-of-network mental health benefits. The MHPA parity requirement regarding annual and lifetime dollar limits continues in effect.
MHPAEA's requirements apply to substance use disorder benefits in addition to mental health benefits.