Texas Administrative Code
Title 28 - INSURANCE
Part 1 - TEXAS DEPARTMENT OF INSURANCE
Chapter 21 - TRADE PRACTICES
Subchapter P - MENTAL HEALTH PARITY
Division 1 - GENERAL PROVISIONS AND PARITY REQUIREMENTS
Section 21.2408 - Parity Requirements with Respect to Financial Requirements and Treatment Limitations
Universal Citation: 28 TX Admin Code § 21.2408
Current through Reg. 50, No. 13; March 28, 2025
(a) Clarification of terms.
(1) Classification of
benefits. When reference is made in this subchapter to a classification of
benefits, the term "classification" means a classification as described in
subsection (b)(2) of this section.
(2) Type of financial requirement or
treatment limitation. When reference is made in this subchapter to a type of
financial requirement or treatment limitation, the reference to type means its
nature. Different types of financial requirements include deductibles,
copayments, coinsurance, and out-of-pocket maximums. Different types of
quantitative treatment limitations include annual, episode, and lifetime day
and visit limits. An illustrative list of nonquantitative treatment limitations
is provided in §
21.2409(b) of
this title (relating to Nonquantitative Treatment Limitations).
(3) Level of a type of financial requirement
or treatment limitation. When reference is made in this subchapter to a level
of a type of financial requirement or treatment limitation, "level" refers to
the magnitude of the type of financial requirement or treatment limitation. For
example, different levels of coinsurance include 20% and 30%, different levels
of a copayment include $15 and $20, different levels of a deductible include
$250 and $500, and different levels of an episode limit include 21 inpatient
days per episode and 30 inpatient days per episode.
(4) Coverage unit. When reference is made in
this subchapter to a coverage unit, "coverage unit" refers to the way in which
a health benefit plan groups individuals for purposes of determining benefits,
or premiums or contributions. For example, different coverage units include
self-only, family, and employee-plus-spouse.
(b) General parity requirement.
(1) General requirement. A health benefit
plan that provides both medical/surgical benefits and mental health or
substance use disorder benefits may not apply any financial requirement or
treatment limitation to mental health or substance use disorder benefits in any
classification that is more restrictive than the predominant financial
requirement or treatment limitation of that type applied to substantially all
medical/surgical benefits in the same classification. Whether a financial
requirement or treatment limitation is a predominant financial requirement or
treatment limitation that applies to substantially all medical/surgical
benefits in a classification is determined separately for each type of
financial requirement or treatment limitation. The application of the
requirements of this subsection to financial requirements and quantitative
treatment limitations is addressed in subsection (c) of this section; the
application of the requirements of this subsection to nonquantitative treatment
limitations is addressed in §
21.2409 of this title.
(2) Classifications of benefits used for
applying requirements.
(A) In general. If a
health benefit plan provides mental health or substance use disorder benefits
in any classification of benefits described in this subparagraph, mental health
or substance use disorder benefits must be provided in every classification in
which medical/surgical benefits are provided. In determining the classification
in which a particular benefit belongs, a health benefit plan must apply the
same standards to medical/surgical benefits and to mental health or substance
use disorder benefits. To the extent that a health benefit plan provides
benefits in a classification and imposes any separate financial requirement or
treatment limitation (or separate level of a financial requirement or treatment
limitation) for benefits in the classification, the requirements of this
subsection apply separately with respect to that classification for all
financial requirements or treatment limitations (illustrated in examples in
paragraph (2)(C) of this subsection). The following classifications of benefits
are the only classifications used in applying the requirements of this
subsection:
(i) An "inpatient, in-network"
classification is for benefits furnished on an inpatient basis and within a
network of providers established or recognized under a health benefit plan.
Special requirements for plans with multiple network tiers are addressed in
subsection (c)(3) of this section.
(ii) An "inpatient, out-of-network"
classification is for benefits furnished on an inpatient basis and outside any
network of providers established or recognized under a health benefit plan.
This classification includes inpatient benefits under a health benefit plan
that has no network of providers.
(iii) An "outpatient, in-network"
classification is for benefits furnished on an outpatient basis and within a
network of providers established or recognized under a health benefit plan.
Special requirements for office visits and plans with multiple network tiers
are addressed in subsection (c)(3) of this section.
(iv) An "outpatient, out-of-network"
classification is for benefits furnished on an outpatient basis and outside any
network of providers established or recognized under a health benefit plan.
This classification includes outpatient benefits under a health benefit plan
that has no network of providers. Special requirements for office visits are
addressed in subsection (c)(3) of this section.
(v) An "emergency care" classification is for
benefits for emergency care.
(vi) A
"prescription drug" classification is for benefits for prescription drugs. See
special requirements for multi-tiered prescription drug benefits in subsection
(c)(3) of this section.
(B) Application to out-of-network providers.
Application to out-of-network providers is addressed in subparagraph (A) of
this paragraph, under which a health benefit plan that provides mental health
or substance use disorder benefits in any classification of benefits must
provide mental health or substance use disorder benefits in every
classification in which medical/surgical benefits are provided, including
out-of-network classifications.
(C)
Examples. The requirements of this paragraph are illustrated by examples
provided in the figure §21.2408(b)(2)(C). In each example, the health
benefit plan is subject to the requirements of this section and provides both
medical/surgical benefits and mental health and substance use disorder
benefits.
(c) Financial requirements and quantitative treatmentlimitations.
(1) Determining "substantially all" and
"predominant."
(A) Substantially all. For
purposes of this section, a type of financial requirement or quantitative
treatment limitation is considered to apply to substantially all
medical/surgical benefits in a classification of benefits if it applies to at
least two-thirds of all medical/surgical benefits in that classification. (For
this purpose, benefits expressed as subject to a zero level of a type of
financial requirement are treated as benefits not subject to that type of
financial requirement, and benefits expressed as subject to a quantitative
treatment limitation that is unlimited are treated as benefits not subject to
that type of quantitative treatment limitation.) If a type of financial
requirement or quantitative treatment limitation does not apply to at least
two-thirds of all medical/surgical benefits in a classification, then that type
cannot be applied to mental health or substance use disorder benefits in that
classification.
(B) Predominant.
(i) If a type of financial requirement or
quantitative treatment limitation applies to at least two-thirds of all
medical/surgical benefits in a classification as determined under subparagraph
(A) of this paragraph, the level of the financial requirement or quantitative
treatment limitation that is considered the predominant level of that type in a
classification of benefits is the level that applies to more than one-half of
medical/surgical benefits in that classification subject to the financial
requirement or quantitative treatment limitation.
(ii) If, with respect to a type of financial
requirement or quantitative treatment limitation that applies to at least
two-thirds of all medical/surgical benefits in a classification, there is no
single level that applies to more than one-half of medical/surgical benefits in
the classification subject to the financial requirement or quantitative
treatment limitation, the plan may combine levels until the combination of
levels applies to more than one-half of medical/surgical benefits subject to
the financial requirement or quantitative treatment limitation in the
classification. The least restrictive level within the combination is
considered the predominant level of that type in the classification. (For this
purpose, a plan may combine the most restrictive levels first, with each less
restrictive level added to the combination until the combination applies to
more than one-half of the benefits subject to the financial requirement or
treatment limitation.)
(C) Portion based on plan payments. For
purposes of this section, the determination of the portion of medical/surgical
benefits in a classification of benefits subject to a financial requirement or
quantitative treatment limitation (or subject to any level of a financial
requirement or quantitative treatment limitation) is based on the dollar amount
of all plan payments for medical/surgical benefits in the classification
expected to be paid under the plan for the plan year (for the portion of the
plan year after a change in plan benefits that affects the applicability of the
financial requirement or quantitative treatment limitation).
(D) Clarifications for certain threshold
requirements. For any deductible, the dollar amount of plan payments includes
all plan payments with respect to claims that would be subject to the
deductible if it had not been satisfied. For any out-of-pocket maximum, the
dollar amount of plan payments includes all plan payments associated with
out-of-pocket payments that are taken into account toward the out-of-pocket
maximum, as well as all plan payments associated with out-of-pocket payments
that would have been made toward the out-of-pocket maximum if it had not been
satisfied.
(E) Determining the
dollar amount of plan payments. Subject to subparagraph (D) of this paragraph,
any reasonable method may be used to determine the dollar amount expected to be
paid under a plan for medical/surgical benefits subject to a financial
requirement or quantitative treatment limitation (or subject to any level of a
financial requirement or quantitative treatment limitation).
(2) Application to different
coverage units. If a health benefit plan applies different levels of a
financial requirement or quantitative treatment limitation to different
coverage units in a classification of medical/surgical benefits, the
predominant level that applies to substantially all medical/surgical benefits
in the classification is determined separately for each coverage
unit.
(3) Special requirements.
(A) Multi-tiered prescription drug benefits.
If a health benefit plan applies different levels of financial requirements to
different tiers of prescription drug benefits based on reasonable factors
determined in accordance with the requirements in §
21.2409(a) of
this title and without regard to whether a drug is generally prescribed with
respect to medical/surgical benefits or with respect to mental health or
substance use disorder benefits, the health benefit plan satisfies the parity
requirements of this section with respect to prescription drug benefits.
Reasonable factors include cost, efficacy, generic versus brand name, and mail
order versus pharmacy pick-up.
(B)
Multiple network tiers. If a health benefit plan provides benefits through
multiple tiers of in-network providers (such as an in-network tier of preferred
providers with more generous cost-sharing to participants than a separate
in-network tier of participating providers), the plan may divide its benefits
furnished on an in-network basis into subclassifications that reflect network
tiers, if the tiering is based on reasonable factors determined in accordance
with the requirements in §
21.2409(a) of
this title (such as quality, performance, and market standards) and without
regard to whether a provider provides services with respect to medical/surgical
benefits or mental health or substance use disorder benefits. After the
subclassifications are established, the issuer may not impose any financial
requirement or treatment limitation on mental health or substance use disorder
benefits in any subclassification that is more restrictive than the predominant
financial requirement or treatment limitation that applies to substantially all
medical/surgical benefits in the subclassification using the methodology in
subsection (c)(1) of this section.
(C) Subclassifications permitted for office
visits, separate from other outpatient services. For purposes of applying the
financial requirement and treatment limitation requirements of this section, a
plan may divide its benefits furnished on an outpatient basis into the two
subclassifications described in this subparagraph. After the subclassifications
are established, the plan may not impose any financial requirement or
quantitative treatment limitation on mental health or substance use disorder
benefits in any subclassification that is more restrictive than the predominant
financial requirement or quantitative treatment limitation that applies to
substantially all medical/surgical benefits in the subclassification using the
methodology in paragraph (1) of this subsection. Subclassifications other than
these special requirements, such as separate subclassifications for generalists
and specialists, are not permitted. The two subclassifications permitted under
this subparagraph are:
(i) office visits
(such as physician visits), and
(ii) all other outpatient items and services
(such as outpatient surgery, facility charges for day treatment centers,
laboratory charges, or other medical items).
(4) Examples. The requirements of paragraph
(3)(A) - (C) of this subsection are illustrated by examples provided in figure
28 TAC §
21.2408(c)(4). In
each example, the health benefit plan is subject to the requirements of this
section and provides both medical/surgical benefits and mental health and
substance use disorder benefits.
(5) No separate cumulative
financial requirements or cumulative quantitative treatment limitations.
(A) A health benefit plan may not apply any
cumulative financial requirement or cumulative quantitative treatment
limitation for mental health or substance use disorder benefits in a
classification that accumulates separately from any established for
medical/surgical benefits in the same classification.
(B) The requirements of this paragraph are
illustrated by examples provided in figure 28 TAC §
21.2408(c)(5)(B).
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