Require parity in disability insurance policies
Recommendation
Congress should require parity in disability insurance policies by outlawing the discriminatory limitation of benefits when a disability is caused by a mental health or substance use disorder (MH/SUD).
Background/summary
Currently, most disability policies’ benefits are limited to 24 months for disabilities caused by a mental health or substance use disorder (MH/SUD) when no such limitations exist for physical health conditions. The State of Vermont outlawed disability insurance discrimination against MH/SUDs in 2008, just weeks after the signing of the federal Mental Health Parity and Addiction Equity Act.[1] In requiring parity in disability insurance, the state issued a bulletin citing its responsibility “to protect consumers against unfair and unconscionable practices.”[2] After parity requirements were implemented in Vermont, the disability insurance market remained stable. Other states have also started to take steps towards reforming their disability insurance markets. Illinois’ legislature created a task force that issued a report on parity in disability insurance, and legislation has been introduced in Massachusetts to outlaw discrimination.[3][4] While state-based reforms represent progress, Congress should pass legislation outlawing disability insurance discrimination against individuals with disabilities caused by MH/SUDs.
citations
1. The Kennedy Forum. What is Parity? Last Accessed July 6, 2023.
2. State of Vermont; Department of Banking, Insurance, Securities, and Health Care Administration. Revised HCA Bulletin 127: Discrimination Against Disability Due to a Mental Health Condition Prohibited in Disability Income Replacement Insurance. Last Accessed July 6, 2023.
3. Illinois Disability Income Insurance and Parity for Behavioral Health Conditions Task Force. Report of the Disability Income Insurance and Parity for Behavioral Health Conditions Task Force (P.A. 102-0304). Last Accessed December 2022.
4. The 193rd General Court of the Commonwealth of Massachusetts. An Act Requiring Mental Health Parity for Disability Policies State Bill S.669 (Lovely). Last Accessed July 6, 2023.