Mandated Benefits
Mandated benefits address underinsurance by requiring private health insurance carriers to offer specific benefits. State legislatures across the country have passed mandated benefit laws, ensuring that people who are covered by private insurance have access to certain benefits such as early intervention, nutritional supplements, or services for autism. Sometimes mandated benefits are preventive services such as screenings, with the potential to save costs for the system as a whole by catching conditions before they become severe and costly to treat.
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An important exemption from state benefit mandates applies to companies that “self-insure.” Instead of purchasing health insurance coverage for their employees, self-insured companies pay for employees’ health care costs directly, usually using a health plan to administer the benefits. Self-insured employers are exempt from all state mandated benefit laws under the provisions of the federal ERISA (Employee Retirement Income Security Act) law. They may choose to follow state laws, but they are not required to do so.
It is also important to understand that state-specific statutes determine the parameters of a particular mandated benefit, and that there is variation in what is actually covered from state to state. States may vary in terms of who they make eligible for a given benefit, what it covers, or the dollar amount an insurer may be obliged to pay out for a consumer receiving the benefit. For example, a mandate for mental health parity may mean unrestricted access to mental health services in one state or within a particular health plan, or it may mean that individuals can only receive a certain number of mental health visits or hospital days if those benefits are also restricted for physical health services.
For the table detailing mandates for mental health coverage in the small group market, including information on mental health parity, see this link: http://www.statehealthfacts.org/comparereport.jsp?rep=2&cat=7.
For the table detailing mandates for mental health coverage in the individual market, including information on mental health parity, see this link: http://www.statehealthfacts.org/comparereport.jsp?rep=1&cat=7.
- Early Intervention
Nine states have a mandated benefit for Early Intervention services for children from birth to age three. This means that private insurance carriers in these states must cover Early Intervention services. In Massachusetts, Rhode Island, Connecticut, and Virginia the mandated Early Intervention benefit covers at least $5,000 of services per child per year for privately insured children. In Rhode Island, this cannot count against a child’s lifetime benefit cap. In other states such as New Hampshire, New Mexico, and Connecticut the benefit is capped at $3,200-$3,500, but may not count against lifetime benefit caps. With Medicaid and CHIP providing Early Intervention coverage for low-income children and commercial insurers providing coverage for most middle and higher-income children, state-appropriated public health funds can be used to finance Early Intervention services for uninsured children or to pick up expenses in excess of the private insurance cap. The net effect is to ensure nearly universal access to Early Intervention in these states for children aged birth to three with or at risk for developmental delays. For more state-specific information on mandated benefits for Early Intervention, visit the National Early Childhood Technical Assistance Center website at http://www.nectac.org/topics/finance/statelegis.asp.
- Hearing Aids
Sixteen states have mandated coverage for hearing aids for children and youth with hearing loss. They include Arkansas, Colorado, Connecticut, Delaware, Kentucky, Louisiana, Maine, Maryland, Minnesota, Missouri, New Jersey, New Mexico, Oklahoma, Oregon, Rhode Island, and Wisconsin. Coverage amounts for this benefit range from $1,000 – $4,000 per hearing aid per ear with some states putting no limit on the benefit amount. The frequency of benefit use ranges from every 2 – 5 years. In order to qualify for coverage hearing loss (either partial or total) must be verified by a licensed physician and/or audiologist. States may decide to include coverage for other services and supplies related to hearing screening and treatment. For example, Colorado includes language to provide coverage for the initial assessment, fitting, adjustments and auditory training necessary for effective hearing aid use. For more information on mandated benefits related to hearing aid coverage visit the National Center for Hearing Assessment and Management (NCHAM) at http://www.infanthearing.org/legislation/hearingaid.html
- Autism
An ever-increasing number of states are passing legislation mandating coverage for autism services and supports. For example, Pennsylvania passed legislation in July 2008 mandating private coverage of medically necessary treatment for individuals with autism up to age 21. Insurers are responsible for the cost of autism treatment up to $36,000 per year, including psychiatric care, psychological care, rehabilitative care, applied behavioral analysis, therapeutic care, and pharmacy care, as well as services that prevent a child from losing treatment gains and regressing. Other states with autism benefit mandates include Arizona, California, Kentucky, Maryland, New York, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, and Wisconsin. For more information on mandated benefits for autism, visit Autism Speaks’ Autism Votes website at http://www.autismvotes.org.
- Nutritional Supplements
Another important mandated benefit for CYSHCN is nutritional supplements or “medical food” for children with metabolic disorders; these are mandated by 34 states.
For example, Rhode Island implemented a law in 2008 that mandates individual or group health insurance plans to provide coverage for nonprescription enternal formulas or nutrition products for home use up to $2,500 per covered member per year. Insurers can impose a copayment and/or deductibles for these benefits, but the amount cannot be greater than the copayment or deductible amount imposed for prescription enternal formulas or nutritional aids. A physician must issue a written order that the formula is medically necessary for the treatment of malabsorption caused by Crohn’s disease, ulcerative colitis, gastroesophageal reflux, chronic intestinal pseudo-obstruction, or inherited diseases of amino acids and organic acids.
Other mandated benefits passed by selected states include mental health services (39 states), newborn hearing screening (18 states)’ and treatment for cleft palate (15 states). For more information, visit the National Conference of State Legislatures Web page on health insurance mandates at http://www.ncsl.org/Default.aspx?TabID=160&tabs=832,90,266#266
