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Insurance coverage and parity for mental health and substance use disorder services

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All fully insured health plans sold to individuals, small employer groups, and large employer groups must include benefits for mental health and substance use disorder (MH/SUD) services. These benefits must be provided at the same level as benefits provided for physical illness, also known as "parity." Self-funded health plans (commonly provided by large employers) aren’t required to cover MH/SUD services. If they do include this coverage, it must be provided in parity with benefits for physical illness.

Sometimes it can be difficult to determine whether your health plan is fully insured or self-funded, since self-funded plans are commonly administered by health insurance companies. If your plan is fully insured, your ID card will say "TDI" or "DOI" (see examples). The Texas Department of Insurance (TDI) regulates fully insured plans, while the federal Department of Labor (DOL) regulates self-funded plans, which are exempt from state regulation under the Employee Retirement Income Security Act. To learn more about the regulation of self-funded plans, visit the DOL's Employee Benefits Security Administration page.

Definition of parity

Parity requires health plans that cover MH/SUD services to provide the same level of coverage for MH/SUD as is provided for medical and surgical benefits, with respect to:

  • Annual and lifetime limits on coverage.
  • Financial requirements: deductibles, copayments, coinsurance, out-of-pocket expenses;
  • Quantitative treatment limitations: limits on the frequency of treatment, number of visits, days of coverage, or other similar limits on the scope or duration of treatment.
  • Non-quantitative treatment limitations: medical management standards, step therapy and fail first requirements, formulary design, availability of coverage for benefits provided by out-of-network providers and network tier design, standards for provider participation in a network, payment methodologies, and other plan processes that limit or restrict coverage or access to treatment.

Coverage terms that limit MH/SUD benefits must be comparable to, and applied no more stringently than, limits for medical benefits. This includes the processes and standards used to apply the limit.

Learn more: How to get help with a mental health issue | Watch video: What’s mental health parity?

Treatment denials

If treatment is denied or if you are approved for a lower level of treatment than your provider prescribed, you have the right to appeal with your health plan. Your provider may also file an appeal on your behalf. You or your provider may also file a complaint with TDI. If your health plan denies your appeal on the basis of medical necessity or a determination that the treatment is experimental or investigational, you may appeal your health plan's decision to an independent review organization.

Make sure you follow your health plan's appeals process and the deadlines for filing your appeal. Read more about complaints and appeals below. Also read the National Alliance on Mental Illnesses’ tips for what to do if you're denied care by your insurance.

The Texas Health and Human Services Commission can help with concerns about access to behavioral health care through a health insurance plan; answer questions about programs and providers; navigate your health plan's requirements to pay for services; find a way to solve problems with your services; and help you understand your rights.

State and federal standards

State parity standards enacted in HB 10 by the 85th Texas Legislature are closely aligned with the federal Mental Health Parity and Addiction Equity Act. Texas law is effective for plans issued or renewed on or after January 1, 2018, and TDI now has authority to enforce compliance with parity standards for all fully insured health plans.

Learn more: Mental health and substance use disorder parity rules

Texas resources

Federal resources

Consumer rights and protections

Health plans that use preferred provider networks (including PPOs, EPOs, and HMOs), must include enough providers within the plan's service area to allow enrollees reasonable access to in-network providers capable of providing all of the benefits covered under the plan, including:

  • Emergency care at all times.
  • Urgent care within 24 hours.
  • Routine care within two weeks for behavioral health conditions (three weeks for medical).
  • Primary care within 30 miles (or 60 miles in rural areas for PPOs and EPOs).
  • Specialty care (including MH/SUD) within 75 miles.

In areas where providers aren’t available to contract, the health plan must set up a plan that says how enrollees can access needed services without paying more.

In an HMO plan – where primary care providers act as "gatekeepers" to access to specialty providers – an enrollee with a chronic, disabling, or life threatening illness may apply to use a nonprimary care physician specialist as a PCP.

Appeals of adverse determinations (denials of coverage)

Medical necessity determinations are made through a system of utilization reviews and upon appeal are reviewed by independent review organizations (IROs). Utilization review agents (URAs) must base the frequency of review on the severity or complexity of patient’s condition and may not impose unnecessary or unreasonable repetitive contacts on the patient or provider. A URA's review criteria must be:

  • Objective.
  • Clinically valid.
  • Compatible with established principles of health care.
  • Flexible enough to allow deviation from the norm when justified on a case-by-case basis.

Before deciding on the medical necessity or the experimental or investigational nature of a health care service, the URA must give the provider a chance to talk with a doctor about the patient's treatment plan and the URA's clinical basis for the adverse determination. When issuing an adverse determination, the notice must:

  • Include the principal reasons, clinical basis, and description or source of screening criteria used in making the adverse determination.
  • Describe the complaint and appeal process.
  • Notify the enrollee of the right to appeal to an independent review organization (IRO).

An enrollee, a person acting on their behalf, or the enrollee’s provider may appeal an adverse determination. If the plan denies the appeal, the plan must provide a notice that includes the clinical basis for the denial, the specialty of the provider making the denial, and the appealing party's right to appeal to an IRO. If the provider believes the case should be reviewed by a particular type of specialty provider, the provider may request a specialty review applicable to the treatment under review.

In a life-threatening circumstance, the enrollee is entitled to an immediate appeal to an IRO without involving the URA's internal appeals process. 

Complaints

If a patient or provider believes a health plan is violating the law or isn’t administering the health plan according to the contract, they should file a complaint with TDI. We rely on complaints to learn of violations and identify issues that warrant enforcement actions. Consumers or providers may file a complaint with us against an insurer, HMO, IRO, or URA using TDI's Online Complaint Portal. For more help, call our Help Line at 800-252-3439.

Relevant laws

Texas laws

Federal laws

Learn more about the mental health parity law

Learn about the history of state and federal mental health parity laws. We also explain the fundamental parity requirements for quantitative and non-quantitative treatment limitations. We also discuss parity rules that TDI adopted in 2021.

 

Last updated: 8/28/2023