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Mental health parity describes the equal treatment of mental health conditions and substance use disorders in insurance plans. When a plan has parity, it means that if you are provided unlimited doctor visits for a chronic condition like diabetes then they must offer unlimited visits for a mental health condition such as depression or schizophrenia.
However, parity doesn't mean that you will get good mental health coverage. Comprehensive parity requires equal coverage, not necessarily "good" coverage. If the health insurance plan is very limited, then mental health coverage will be similarly limited even in a state with a strong parity law or in a plan that is subject to federal parity.
In 2008, Congress passed the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA) to ensure equal coverage of treatment for mental illness and addiction. In November 2013, the federal government released rules to implement the law. Before this law, mental health treatment was typically covered at far lower levels in health insurance policies than physical illness.
Whether or not a plan is covered by federal parity law depends on the kind of health plan a person is enrolled in and even its size.
Health plans that do not have to follow federal parity include:
If you are unsure about what type of plan you have, ask your insurance carrier or agent, your plan administrator, or your human resources department.
If a state has a stronger state parity law, then health insurance plans regulated in that state must follow those laws. For example, if state law requires plans to cover mental health conditions, then they must do so, even though federal parity makes inclusion of any mental health benefits optional.
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 conditions, then the federal requirement of equal coverage will trump the “weaker” state law.
If a plan has to follow federal parity law, then the following must be covered equally when it comes to treatment limits and payment amounts.
Federal parity also applies to clinical criteria used by health insurers to approve or deny mental health or substance use treatment. The standard for medical necessity determinations—whether the treatment or supplies are considered by the health plan to be reasonable, necessary, and/or appropriate—must be made available to any current or potential health plan member upon request. The reason for denials of coverage must also be made available upon request.
If you think your plan has violated parity requirements, you can talk with your plan. The reason for denials of coverage must be made available by your insurance company upon request. If your treatment is denied and you disagree, you should contact your plan's customer relations division right away. You may file a written formal appeal (ask your plan for details) or use NAMI's template letters if your informal attempts are not successful.