The New York State Department of Financial Services (DFS) is taking action to ensure compliance with coverage requirements for mental health and substance abuse disorders. See July 27, 2016 Press Release.

This guidance follows recent New York legislation designed to ensure access to treatment for mental health and substance abuse disorders. Insurers are required to use objective state-designated criteria when determining the level of care for individuals seeking coverage for treatment of such conditions.

DFS’ action is consistent with that of the United States Department of Labor (DOL) and the United States Department of Health and Human Services (HHS), which jointly issued guidance on compliance with the federal Mental Health Parity and Addiction Equity Act (MHPAEA). See42 U.S.C. § 300gg-1, et seq.; 42 U.S.C. § 18001, et seq.; 29 U.S.C. § 1185a; 45 C.F.R. Parts 146 and 147; and N.Y. Ins. Law §§ 3103, 3201, 3221, 4303, and 4308.

The DOL/HHS guidance is available on the DOL website and on the HHS website.

DFS’ guidance, issued in the form of a Notice to Insurers, 1) highlights DFS’ zero tolerance policy regarding compliance with coverage requirements, and 2) outlines New York’s commitment to enforce the MHPAEA requirements. A copy of the Notice can be found here.

Who is put on Notice by DFS?

  • All Insurers authorized to write accident and health insurance in New York State;
  • Article 43 corporations;
  • Health Maintenance Organizations;
  • Student Health Plans certified pursuant to Insurance Law § 1124; and
  • Municipal Cooperative Health Benefit Plans

What does this mean?

Under MHPAEA, health insurance plans are required to provide the same level of coverage for mental health and substance abuse disorders as for medical or surgical care. This includes:

  • Quantitative Treatment Limitations (QTLs), such as co-pays, deductibles, and limits on inpatient or outpatient visits that are covered by the health insurance plan, and
  • Non-Quantitative Treatment Limitations (NQTLs), such as pre-authorizations, providers available through a plan’s network, and what a plan considers medically necessary.”

How does this affect New York insurers?

In accordance with the DOL/HHS recommendation to state regulators, DFS is reviewing insurers’ QLTs and NQTLs to ensure parity compliance with “the processes, strategies, evidentiary standards, or other factors used in applying the NQTL to both MH/SUD and medical and surgical benefits.”

This includes, for example:

  • preauthorization and pre-service notice requirements;
  • fail-first protocols;
  • probability of improvement requirements;
  • written treatment plan requirement; and
  • other requirements, such as patient non-compliance rules, residential treatment limits, geographical limitations, and licensure requirements.

Where can insurers submit comments?

DFS is seeking input from stakeholders (consumers, insurers, and providers) as part of its comprehensive review of the MHPAEA compliance issues.

Stakeholders are permitted to submit comments directly to DFS at:


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