If you’re a small employer offering group health insurance, you’ve likely had an employee ask why their therapy copay is higher than their regular doctor visit, or why their in-network mental health provider list is half the size of the primary care directory. Federal and most state parity rules require equal coverage for mental health and substance use disorder (MH/SUD) benefits and medical/surgical benefits, but confirming compliance doesn’t require a law degree. This guide walks you through quick checks to flag potential parity gaps before they lead to employee complaints or regulatory issues.
Use the checklist below to run a fast initial review of your plan materials before reaching out to your broker or carrier for clarification.
Parity Document Checklist
| Document Type | What to Verify | Completed? |
|---|---|---|
| Summary of Benefits and Coverage (SBC) | MH/SUD copays, deductibles, and out-of-pocket maximums match medical/surgical benefits for the same tier of care (in-network, out-of-network, individual, family) | ☐ |
| Official plan benefit booklet | No annual or lifetime dollar limits on MH/SUD benefits that do not apply to medical/surgical benefits; no stricter visit limits for outpatient MH/SUD care than for outpatient primary care | ☐ |
| In-network provider directory | MH/SUD provider options (psychiatrists, psychologists, licensed therapists, SUD counselors) for your primary worksite service area are not disproportionately limited compared to primary care provider options, per your carrier’s published network adequacy standards | ☐ |
| Most recent plan renewal letter | No standalone increases to MH/SUD cost-sharing that are not applied to all medical/surgical benefits | ☐ |
| Past 12 months of employee MH/SUD claims appeals (if any) | No pattern of MH/SUD claims being denied for medical necessity at a higher rate than medical/surgical claims | ☐ |
What to ask a broker or carrier
The checklist above will flag surface-level inconsistencies, but you will need to follow up with your broker or assigned carrier representative to confirm any gaps you find, and to verify details that are not explicitly listed in plan documents. Many small employers assume their carrier automatically builds parity-compliant plans, but oversights can happen, especially with smaller regional carriers that may not have dedicated parity compliance teams. Frame your questions as a routine annual compliance check to get clear, straightforward answers without creating friction with your broker or carrier contact.
Question list
Stick to specific, targeted questions to avoid vague responses that do not confirm compliance. Use this list for your call or email:
- Are all MH/SUD benefits offered under our plan subject to the same cost-sharing (copays, coinsurance, deductibles, out-of-pocket maximums) as equivalent medical/surgical benefits, for both in-network and out-of-network care?
- Are there any visit limits, prior authorization requirements, or step therapy rules for MH/SUD care that are not applied to the majority of medical/surgical outpatient services?
- Does our carrier use the same medical necessity criteria for MH/SUD claims as it does for medical/surgical claims, and can you share a copy of that criteria for our records?
- If our plan offers telehealth benefits, are MH/SUD telehealth visits covered at the same rate as medical telehealth visits, with no separate limits on number of teletherapy visits?
- For out-of-network MH/SUD care, are reimbursement rates set using the same methodology as out-of-network medical/surgical care?
- Are there any exclusions for specific types of MH/SUD care (for example, outpatient eating disorder treatment, or medication-assisted treatment for SUD) that do not have equivalent exclusions for medical/surgical care?
How to record answers
Keeping clear records of your parity check will help you resolve future employee questions and prove you took reasonable steps to confirm compliance if a regulatory issue arises. Follow these steps when documenting responses:
First, date all notes and include the full name and title of the person you spoke with (broker, carrier account manager, etc.). If you get a verbal confirmation of parity compliance, ask for a follow-up email with that confirmation in writing to add to your benefits file. If you identify a potential gap, ask for a written explanation of why the difference exists, and whether it qualifies for a rare parity exception that has been approved by your state insurance regulator. Illustrative example: a $50 copay for outpatient therapy vs a $25 copay for outpatient primary care is a red flag that requires a written explanation from your carrier.
If you use a benefits administration platform, add your parity check notes to the shared plan documentation folder so all relevant staff (HR leads, office managers, etc.) can access them. Keep these records for at least 3 years, which aligns with standard employee benefits recordkeeping requirements for most small businesses. If you receive employee complaints about MH/SUD coverage, attach redacted copies of those complaints to your parity check records to reference during your next plan renewal.
What not to promise employees
As a small employer, you are not responsible for designing the carrier’s plan benefits, so avoid making guarantees about coverage that you cannot independently confirm. Do not promise that all MH/SUD treatment will be covered at the same rate as primary care, even if you believe your plan is parity compliant, because specific claims may be denied for valid reasons unrelated to parity (like out-of-network providers that do not bill the plan correctly, or treatment that is not deemed medically necessary).
Do not tell employees that parity rules eliminate all cost-sharing for MH/SUD care, since parity only requires equal cost-sharing, not zero cost-sharing. Even if your plan is parity compliant, some providers may not be in network, or may charge rates above the plan’s allowed amount, leading to higher out-of-pocket costs for employees that are not a parity violation. If an employee asks about a specific claim or coverage issue, direct them to the carrier’s member services line, or connect them with your broker for one-on-one support, instead of offering a definitive answer about their coverage. Never share details of an employee’s MH/SUD care with other staff, to protect their health privacy under HIPAA rules.
Bottom line
Parity compliance is a shared responsibility between carriers, brokers, and employers, and small employers do not need to conduct a full legal audit to catch common gaps. Running through the parity document checklist once per year, during your plan renewal period, can help you address issues before they impact your team. If you find potential parity violations, your broker can work with the carrier to correct them, or you can reach out to your state department of insurance for guidance on next steps.
This content is for educational purposes only and does not constitute insurance, legal, tax, or medical advice. Always verify your official plan documents and consult a licensed benefits broker or legal advisor for questions specific to your plan and business.
Important note: This page is educational and is not insurance, tax, legal, or medical advice. Confirm current rules in your plan documents or with a licensed professional.