Massachusetts Individual Mandate, Eligibility, the ACA and Mental Health Parity

This chapter covers the Massachusetts individual mandate, when a carrier must accept an individual, coverage of children, the Affordable Care Act and the Health Connector, and mental health parity. The previous chapters covered the policy itself.

Massachusetts individual mandate for minimum creditable coverage (Mass. Gen. Laws ch. 111M; 956 CMR 5.00)

Every resident age 18 and over, and anyone who becomes a resident within 63 days, must obtain and maintain creditable coverage, so long as it is deemed affordable under the schedule set by the board of the Health Connector (Mass. Gen. Laws ch. 111M, § 2(a)).

A resident reports on the state income tax return whether creditable coverage was in force for each of the 12 months (or claims an exemption or a Connector certificate); a person who does not indicate coverage, or indicates none, is assessed a penalty on the return (ch. 111M, § 2(b)). The penalty is assessed for each month without coverage, but a lapse of 63 days or less is not counted. A resident who sought coverage through the Connector may ask for an annual certificate that no plan meeting the definition of creditable coverage was affordable for that person (Mass. Gen. Laws ch. 176Q, § 3(a)(5)).

Supplemental accident or sickness coverage alone does not satisfy the mandate. These are not creditable coverage: accident only, credit only, separately offered vision or dental, supplemental hospital indemnity, disability income, supplemental specified disease, workers’ compensation, auto medical payments and separately offered long-term care (Mass. Gen. Laws ch. 111M, § 1).

The Connector’s regulation sets criteria for the lowest threshold health benefit plan a resident must have, called minimum creditable coverage, to avoid a penalty to the Department of Revenue (956 CMR 5.01). Among other requirements, a qualifying plan must:

• Cover core services and a broad range of benefits: ambulatory patient services, diagnostic imaging and screening, emergency services, hospitalization, maternity and newborn care, medical and surgical care including preventive and primary care, mental health and substance abuse services, prescription drugs, and radiation therapy and chemotherapy (956 CMR 5.03(1)(a))
• Not impose an overall annual maximum benefit on all covered services (956 CMR 5.03(1)(c))
• Cover preventive health services each year without any deductible, copayment, coinsurance or other cost-sharing (956 CMR 5.03(1)(e))

Massachusetts eligibility requirements (open enrollment) (Mass. Gen. Laws ch. 176J, § 4)

Every carrier must make each of its health benefit plans available to every eligible individual and small business, and must enroll any eligible individual who seeks to enroll, except in the limited cases the law allows (Mass. Gen. Laws ch. 176J, § 4(a)(1)). An individual may enroll:

Situation	When the individual may enroll
Prior creditable coverage ended	If the individual requests coverage within 63 days after it ends (§ 4(a)(2))
Otherwise	During the annual open enrollment period, which the statute sets at October 15 to December 7 unless the Commissioner designates otherwise, with coverage beginning January 1 of the following year (§ 4(a)(3))

A carrier must also enroll eligible individuals as the ACA permits (§ 4(a)(2)), and the Office of Patient Protection may grant waivers to enroll outside open enrollment as the ACA allows (§ 4(a)(4)).

Enrolled individuals are protected:

• A carrier may not impose a pre-existing condition exclusion or waiting period of any duration on a health plan (§ 4(a)(2)).
• Every health benefit plan must be renewable as HIPAA requires (§ 4(c)(1)). A carrier need not renew an individual’s plan if the individual has not paid premiums, has committed fraud or misrepresentation, has materially failed to comply with plan provisions, or no longer meets the definition of an eligible individual (§ 4(c)(2)).

Dependent child age limit (Mass. Gen. Laws ch. 175, §§ 108, 110(P); ch. 176A, § 8BB; ch. 176B, § 4BB; ch. 176G, § 4T)

The dependent child age limit is under 26 in each type of health plan:

• An individual accident and sickness policy that is a health benefit plan must, on an adult family member’s application, insure two or more eligible family members, including the spouse, dependent children, children during adoption proceedings and children under 26 years of age (Mass. Gen. Laws ch. 175, § 108(2)(a)(3)).
• Hospital service plans, medical service plans, HMOs and group policies must cover eligible dependents under 26 years of age (Mass. Gen. Laws ch. 176A, § 8BB; ch. 176B, § 4BB; ch. 176G, § 4T; ch. 175, § 110(P)).

This matches the federal age-26 rule (see the chapter on Massachusetts State Regulations).

Disabled adult children (Mass. Gen. Laws ch. 176A, § 8BB; ch. 176B, § 6(c); ch. 176G, § 4T)

Coverage continues without regard to age for a dependent, covered as a member of the parent’s family group, who is mentally or physically incapable of earning their own living due to disability (Mass. Gen. Laws ch. 176G, § 4T; ch. 176A, § 8BB; ch. 176B, § 4BB; ch. 175, § 110(P)). Chapter 177 of the Acts of 2022 added this requirement, effective November 8, 2022 (Division of Insurance Bulletin 2023-06). A medical service corporation’s certificate must likewise state that such a child stays eligible under the parent’s family contract while the incapacity continues, without any limitation as to age (Mass. Gen. Laws ch. 176B, § 6(c)).

Under an individual family policy, a child mentally or physically incapable of earning a living stays covered if the insurer receives due proof of the incapacity within 31 days of the date coverage would otherwise end (Mass. Gen. Laws ch. 175, § 108(2)(a)(3)).

Sidenote

Know this...

None of these statutes requires that the disability began before the child reached the age limit, only that the dependent be incapable of earning a living due to disability.

Newborn child coverage (Mass. Gen. Laws ch. 175, § 47C; ch. 176A, § 8B; ch. 176G, § 4)

A policy that provides hospital and surgical expense insurance and dependent coverage must cover newborn infants, including a newborn of a dependent, immediately from the moment of birth (Mass. Gen. Laws ch. 175, § 47C). The same rule applies to hospital service plans (ch. 176A, § 8B) and HMOs (ch. 176G, § 4).

Coverage includes injury or sickness, including care and treatment of medically diagnosed congenital defects and birth abnormalities, or premature birth. Dependent coverage must also include:

• Preventive and primary care for a dependent child from birth to age 6, including physical exams, screenings and assessments six times in the first year, three times in the second year, and once a year until age 6
• Medically necessary early intervention services for children from birth until their third birthday
• A newborn hearing screening test before the baby leaves the hospital or birthing center

If a specific premium is needed to cover the child, the policy may require notice of the birth (or adoption filing or placement) and payment of the premium; submitting a claim can count as the notice. The statute sets no deadline for it (§ 47C).

Coverage of adopted children (Mass. Gen. Laws ch. 175, § 47C; ch. 176A, § 8B; ch. 176B, § 4C; ch. 176G, § 4)

An adoptive child is covered from the date a petition to adopt is filed if the child has been living in the home as a foster child for whom the policyholder received foster care payments, and in all other cases from the date a licensed agency places the child in the home for adoption (Mass. Gen. Laws ch. 175, § 47C).

Affordable Care Act (ACA) and Massachusetts Health Connector (ACA § 1201; Mass. Gen. Laws ch. 176Q)

The Commonwealth Health Insurance Connector Authority (the Health Connector) is an independent public entity whose purpose is to facilitate the availability, choice and adoption of private health insurance plans to eligible individuals and groups (Mass. Gen. Laws ch. 176Q, § 2(a)). The Connector:

• Performs the duties of an American Health Benefit Exchange under the ACA, including certifying qualified health plans for sale on the Exchange and determining eligibility for federal advance premium tax credits and cost-sharing reductions (ch. 176Q, § 3(u))
• Certifies the health plans offered through it with a seal of approval (§ 3(a)(3))
• Determines eligibility to buy through it, including for premium assistance and cost-sharing subsidies for applicants at or below 300 percent of the federal poverty guidelines (§ 3(b))
• Sets an affordability schedule each year: the percentage of income an individual could be expected to pay toward health insurance; the mandate applies only while coverage is deemed affordable under it (§ 3(q); ch. 111M, § 2(a))

ACA § 1201 added the Public Health Service (PHS) Act sections on guaranteed issue, guaranteed renewability, health status, essential health benefits and waiting periods; other ACA sections added preventive care and the dollar-limit ban. The emergency rule now comes from a later law; all apply alongside Massachusetts law.

Guaranteed issue (PHS Act § 2702)

An insurer offering coverage in a state’s individual or group market must accept every employer and individual in the state that applies, subject to the law’s enrollment periods and other limits (PHS Act § 2702, 42 U.S.C. § 300gg-1(a)). PHS Act § 2708, which the outline cites for guaranteed issue, bars a group plan from applying a waiting period over 90 days (42 U.S.C. § 300gg-7).

Guaranteed renewability (PHS Act § 2703)

An insurer must renew or continue coverage in force at the option of the individual or plan sponsor (PHS Act § 2703, 42 U.S.C. § 300gg-2(a)). It may nonrenew only for listed reasons, such as nonpayment of premiums, fraud or intentional misrepresentation, the insurer’s leaving the market, or no enrollee remaining in a network plan’s service area (§ 300gg-2(b)).

Preventive care (PHS Act § 2713)

Group plans and individual coverage must cover with no cost sharing evidence-based services rated “A” or “B” by the U.S. Preventive Services Task Force, ACIP-recommended immunizations, and HRSA-supported preventive care for children and women (PHS Act § 2713, 42 U.S.C. § 300gg-13(a)).

Emergency services (PHS Act § 2799A-1; outline cites § 2719A(b))

PHS Act § 2719A, the section the outline cites, does not apply to plan years beginning on or after January 1, 2022 (42 U.S.C. § 300gg-19a(e)). The rule now comes from PHS Act § 2799A-1, added by the No Surprises Act. A plan that covers services in a hospital emergency department or an independent freestanding emergency department must cover emergency services without prior authorization and whether or not the provider is in the network; out of network, the cost sharing may be no greater than in-network (42 U.S.C. § 300gg-111(a)(1)). An emergency medical condition is judged by the prudent layperson standard: acute symptoms (including severe pain) severe enough that a person with average knowledge of health and medicine could reasonably expect serious harm without immediate care (§ 300gg-111(a)(3)(B)).

Health status (no discrimination) (PHS Act § 2705)

A plan or insurer may not base enrollment eligibility on health status, medical condition, claims experience, receipt of health care, medical history, genetic information, evidence of insurability (including conditions arising from domestic violence), or disability (PHS Act § 2705, 42 U.S.C. § 300gg-4(a)).

EHB coverage (PHS Act §§ 2707, 2711)

Individual and small group coverage must include the essential health benefits package (PHS Act § 2707, 42 U.S.C. § 300gg-6(a)). Its ten categories are ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care (42 U.S.C. § 18022(b)(1)). A plan may not set lifetime or annual dollar limits on essential health benefits (PHS Act § 2711, 42 U.S.C. § 300gg-11(a)).

Massachusetts Mental Health Parity (Mass. Gen. Laws ch. 175, § 47B; ch. 176A, § 8A; ch. 176B, § 4A; ch. 176G, § 4M; Bulletin 2013-02)

Policies that provide hospital and surgical expense coverage must cover, on a nondiscriminatory basis, the diagnosis and treatment of biologically-based mental disorders: schizophrenia, schizoaffective disorder, major depressive disorder, bipolar disorder, paranoia and other psychotic disorders, obsessive-compulsive disorder, panic disorder, delirium and dementia, affective disorders, eating disorders, post-traumatic stress disorder, substance abuse disorders and autism (Mass. Gen. Laws ch. 175, § 47B(a)). Hospital service plans, medical service plans and HMOs have the same rules (ch. 176A, § 8A; ch. 176B, § 4A; ch. 176G, § 4M). The policies must also cover:

• On a nondiscriminatory basis, medically necessary and active treatment of any mental disorder in the current DSM that the commissioner of mental health approves (§ 47B(a))
• Rape-related mental or emotional disorders for victims of rape or assault with intent to commit rape, when the costs exceed the maximum victim compensation award under chapter 258C (§ 47B(b))
• For children and adolescents under 19, non-biologically-based mental, behavioral or emotional disorders that substantially interfere with or limit the child’s functioning and social interactions, as documented and referred by the child’s primary care provider, pediatrician or licensed mental health professional, or shown by conduct such as being unable to attend school. An adolescent in an ongoing course of treatment keeps the benefit past the 19th birthday until the treatment plan is completed, while that contract (or a later one) remains in effect (§ 47B(c))
• All other DSM mental disorders, for at least 60 days of inpatient treatment and 24 outpatient visits in each 12-month period (§ 47B(e))

A policy meets the nondiscriminatory basis test if no annual or lifetime dollar or unit-of-service limit on these mental disorders is less than the limit on physical conditions (§ 47B(d)). The Division reads this to mean copayments, coinsurance, deductibles, unit-of-service limits (such as hospital days and outpatient visits) and annual or lifetime maximums are not greater for mental disorders than for physical conditions, and that office visit copayments are not greater than those for primary care visits (Division of Insurance Bulletin 2013-02).

Benefits must include inpatient, intermediate and outpatient services, so treatment can occur in the least restrictive clinically appropriate setting (§ 47B(g)). Only licensed mental health professionals may deny the services this section requires (§ 47B(h)). The requirements apply to small group plans (ch. 176J) and nongroup plans (ch. 176M) (§ 47B(j)).

The federal Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) requires that financial requirements (such as copays and deductibles) and treatment limits (such as visit limits) on mental health and substance use disorder benefits be no more restrictive than the predominant ones on substantially all medical/surgical benefits. As a result, individual and small group products issued or renewed on and after January 1, 2014 may not apply any visit, day or other limit on inpatient, intermediate or outpatient behavioral health services more restrictive than those on medical/surgical benefits (Bulletin 2013-02).

Lesson summary

• Residents 18 and over must keep affordable creditable coverage; the tax-return penalty is monthly, ignoring lapses of 63 days or less (ch. 111M, § 2). Accident-only and disability income coverage do not count (§ 1). Minimum creditable coverage includes preventive care with no cost sharing (956 CMR 5.00).
• Carriers must accept eligible individuals within 63 days after other coverage ends or during open enrollment (October 15 to December 7 unless the Commissioner designates otherwise), with no pre-existing condition exclusions or waiting periods (ch. 176J, § 4).
• Dependents are covered under 26, a disabled dependent without regard to age (since November 8, 2022); individual-policy proof of incapacity is due within 31 days (ch. 175, § 108; ch. 176A, § 8BB).
• Newborns are covered from birth; adoptive children from the petition (foster children) or placement (others); a claim can serve as notice (ch. 175, § 47C).
• The Health Connector is the state’s ACA exchange (ch. 176Q). PHS Act: guaranteed issue (§ 2702), renewability (§ 2703), no health-status rules (§ 2705), essential health benefits (§ 2707) without lifetime or annual dollar limits (§ 2711), no-cost preventive care (§ 2713), and emergency care without prior authorization (§ 2799A-1, replacing § 2719A from 2022).
• Parity: nondiscriminatory coverage of biologically-based, rape-related and children’s (under 19) disorders, plus at least 60 inpatient days and 24 outpatient visits for others (ch. 175, § 47B).