How to Know If Your Insurance Covers Therapy
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If you’re one of the millions of Americans who are considering therapy, health insurance coverage may be a concern. If you have health insurance, chances are good that your policy provides some level of coverage.
To address the importance of and demand for sustaining mental wellness, most insurance companies offer some coverage for mental health services. But there are large differences between the benefits health insurers provide and the out-of-pocket costs you might be required to pay.
Pre-tax flexible spending accounts (FSAs) are often touted as the answer to high out-of-pocket medical costs, but many FSAs have “use it or lose it” rules. FSA holders lose $50 to $100 per year on average, CBS News reported, but since you’re allowed to contribute up to $2,650, you could risk losing thousands of dollars if you don’t spend your FSA money in time.
If you have health insurance through your job, it may or may not include coverage for therapy. Even if you have coverage, it’s up to you to decide whether or not you wish to use it for mental healthcare. In some instances, people choose to pay out of pocket for therapeutic services rather than claim coverage through their insurer. Why?
Insurance companies only pay for medically necessary services. They require a mental health diagnosis before they will pay claims. Some people are not comfortable with this.
A mental health condition diagnosis may range from acute stress to insufficient sleep syndrome, various phobias, mental illnesses, or a number of other descriptors. When it comes to insurance, each of these would have a code number that would go with an insurance claim.
Employer-sponsored insurance in companies of 50+ employees
Companies of 50 or more full-time workers are legally mandated to provide health insurance. This mandate does not specify that mental health services be included as a benefit. Even so, most large companies, including those that are self-insured, do provide health insurance that includes some coverage of therapeutic services.
Employer-sponsored insurance in companies under 50 employees
Small companies that employ under 50 people are not legally required to provide health insurance to their employees. However, for those who do, mental health services and substance use disorder services must be included, no matter where or how the plan is purchased.
Health Insurance Marketplace plans
Under the Affordable Care Act, all plans purchased through the Health Insurance Marketplace must cover 10 essential health benefits. These include mental health services and substance use disorder services.
All Marketplace plans, whether they’re state or federally managed, include coverage for mental health. This pertains to individual plans, family plans, and small business plans.
Plans and their coverage vary by state. States also offer multiple plan options, which vary in terms of their coverage.
All Marketplace plans must include
- behavioral health treatments, such as psychotherapy and counseling
- mental and behavioral health inpatient services
- coverage for pre-existing conditions
- no yearly or lifetime dollar limits on mental health coverage
- parity protections so that the copays, coinsurance, and deductibles for mental health services are the same or similar to those for medical and surgical benefits
