Mental Health Parity: Federal Law vs New York Law
Short answer
Parity laws say a health plan cannot limit mental health care more strictly than comparable medical care. The federal law (MHPAEA) covers most job-based plans, including self-funded ones, and individual coverage, but does not require plans to cover mental health at all. New York's law reaches state-regulated policies and requires group policies to cover mental health conditions. Which one helps you depends on how your plan is funded and where it was bought.
In crisis or thinking about suicide? Call or text 988 now (in New York City it reaches NYC 988). If you are in immediate danger, call 911.
This guide is not enough if
- You are in crisis. Call or text 988, or call 911 if you are in immediate danger.
- You have Medicare. Medicare plans are not covered by the federal parity protections described here.
- You want a legal opinion on your own plan. This page is general information only.
- Your issue is one denied claim. Start with the appeal steps, then raise parity if the pattern fits.
Why there are two sets of rules
Maybe your plan approves a few therapy sessions at a time but never asks for reviews of physical therapy, or charges more for a psychiatrist than for other specialists. Those are the kinds of gaps parity laws are meant to address. The Department of Labor lists warning signs such as a plan that requires prior authorization every 3 months for mental health medicines, or refuses to cover mental health treatment because you did not finish an earlier course of treatment, when it does not treat comparable medical care the same way.
There is a federal law and a New York law. Which one applies, or whether both do, depends on how your plan is funded and where it was bought. This guide compares them. For how out-of-network payments work under either, see how out-of-network benefits work in New York.
What federal parity requires
The Mental Health Parity and Addiction Equity Act (MHPAEA) does not require plans to cover mental health care, CMS says. But if a plan does, the rules below apply. The U.S. Department of Labor and CMS describe them this way:
- Money limits. Copays, deductibles, coinsurance and out-of-pocket limits for mental health cannot be more restrictive than those that apply to substantially all medical and surgical benefits in the same class.
- Visit limits. Caps on the number of visits, yearly or lifetime, must follow the same rule.
- Other limits. Prior authorization, medical necessity reviews and similar rules must be comparable and applied no more strictly than for medical care.
- Classes of benefits. CMS lists six: inpatient in-network, inpatient out-of-network, outpatient in-network, outpatient out-of-network, emergency care and prescription drugs.
- Out-of-network care. If a group plan covers out-of-network medical care, it must include out-of-network mental health benefits too.
Which plans the federal law covers
The Department of Labor says federal parity protections reach people in job-based group health plans, whether insured or self-funded, that offer both medical and mental health benefits. They also reach individual and small group plans bought through the Health Insurance Marketplace, some Medicaid plans and the Children's Health Insurance Program.
They do not reach retiree-only plans, Medicare plans, church-sponsored plans or certain small employer plans. CMS says small employers (generally 1 to 50 employees) are reached indirectly through the Affordable Care Act's essential health benefits, which include mental health care in non-grandfathered small group plans.
| Question | Federal law (MHPAEA) | New York law |
|---|---|---|
| Which plans | Most job-based plans (insured or self-funded) and individual coverage | Individual and group policies bought in New York |
| Self-funded employer plans | Generally covered | Not covered |
| Must mental health be covered at all | No; rules apply only if the plan covers it | Yes, for group policies that cover hospital or physician care |
| Core rule | Limits no more restrictive than for substantially all medical benefits in the same class | Same core rule in Insurance Law 3221, plus state-approved medical necessity tools |
| Who to contact | Department of Labor for private-employer plans | DFS; Department of Health for Medicaid, Essential Plan and Child Health Plus |
| Recent changes | 2024 rule partly not enforced since May 2025 | Wait-time and access rules since July 1, 2025 |
What New York adds
New York's rules apply to individual and group policies that you or your employer buy in New York, DFS says. They do not apply to self-funded employer plans, even when a well-known insurer runs the claims, and out-of-state policies follow that state's rules.
Within that reach, New York goes further in one important way. Insurance Law section 3221 requires group policies that cover inpatient hospital care or physician services to also cover the diagnosis and treatment of mental health conditions, with money and treatment limits no more restrictive than those for substantially all medical and surgical benefits. DFS also says New York insurers must use state-approved tools to decide whether mental health care is medically necessary, and you can ask for the criteria used.
New York's appointment wait-time and access complaint rules, in effect since July 1, 2025, add another layer; see when you can't find an in-network psychiatrist.
Where the 2024 federal rule stands
In September 2024, the federal agencies issued a new parity rule, effective November 22, 2024. It generally applied to group plan years beginning on or after January 1, 2025, with some parts, such as the meaningful benefits standard and outcomes data requirements, starting January 1, 2026.
On May 15, 2025, the Departments of Labor, Health and Human Services and the Treasury said they would not enforce the parts of the 2024 rule that are new compared with the 2013 rule, until a final decision in a pending lawsuit plus 18 more months. They said the parity statute, as amended in 2021, still has effect, plans can still rely on the 2013 rule and earlier guidance, and they are considering whether to propose rescinding or changing the 2024 rule.
As of November 8, 2026, the Federal Register showed no proposed or final rule replacing it. Check dol.gov for later news.
How to raise a parity concern
Start by finding out who regulates your plan, then:
- Ask for the documents. For private job-based plans, the Department of Labor says you can ask for the information the plan uses to set mental health limits, including medical necessity and prior authorization criteria, and how those limits compare with medical ones. It says plans must give you copies within 30 days.
- Appeal the decision itself. A parity point can be part of an internal or external appeal; see appealing a mental health claim denial.
- New York fully insured plans: file a complaint with DFS. New York's Behavioral Health Ombudsman program (CHAMP) can help.
- Medicaid Managed Care, the Essential Plan or Child Health Plus: complaints go to the New York State Department of Health.
- Self-funded job-based plans: contact the Department of Labor's benefits advisors through askebsa.dol.gov. The help is free.
When parity is not the problem
Parity compares mental health rules with medical ones. It does not set what a plan pays an out-of-network clinician, and it does not make a plan pay a clinician's full fee. If your plan has no out-of-network medical benefits, parity alone will not create out-of-network mental health benefits. Parity also does not decide whether a specific treatment is medically necessary for you. That is a review question, and the appeal process is where you contest it.
If the real issue is cost, comparing in-network, out-of-network and self-pay may help more. Mind Body Seven is out-of-network with all insurance plans and does not accept Medicare or Medicaid; its fees and insurance page explains claims, superbills and its in-network sister practice, Integrative Mind.
Frequently asked questions
Does parity mean my plan has to pay my out-of-network therapist?
Not by itself. Federal parity compares like with like, so a group plan that covers out-of-network medical care must also offer out-of-network mental health benefits, under rules no stricter than the medical ones. It does not set the payment amount or require a plan to pay a clinician's full fee. New York's separate access rules can help when the network cannot see you in time.
Is the 2024 federal parity rule still in effect?
It was issued and took effect in late 2024, but on May 15, 2025 the federal agencies said they would not enforce its new parts while a lawsuit is pending and they reconsider the rule. The parity statute, as amended in 2021, and the 2013 rule still apply. As of November 8, 2026, no replacement rule had been published in the Federal Register.
Can I ask my plan how it compares mental health and medical limits?
Yes, for private job-based plans. The Department of Labor says you can request the criteria your plan uses for limits such as prior authorization and medical necessity, and an explanation of how those were developed compared with medical limits. It says plans must give you copies within 30 days. Ask in writing and keep a copy of your request.
My employer is in New York. Does New York's parity law cover me?
Only if your coverage is a fully insured policy bought in New York. DFS says New York protections do not apply to self-funded employer plans, and policies bought in another state follow that state's rules. Your ID card showing "fully insured coverage" means New York law applies. If you are on a self-funded plan, federal parity still applies through the Department of Labor.
Next: get ready to decide
Internal appeal first, then a New York external appeal: who can file, deadlines and what to gather.
Sources
- CMS: The Mental Health Parity and Addiction Equity Act (MHPAEA)
- U.S. Department of Labor: Understanding Your Mental Health and Substance Use Disorder Benefits
- U.S. Department of Labor: Statement regarding enforcement of the final rule on requirements related to MHPAEA (May 15, 2025)
- U.S. Department of Labor: New Mental Health and Substance Use Disorder Parity Rules, What They Mean for Plans and Issuers
- NY Insurance Law section 3221 (group policies; mental health coverage)
- NYS DFS: Mental Health and Substance Use Disorder Information
- NYS DFS: Know Your Rights, Getting Treatment for Mental Health and Substance Use Disorders (February 2026)
- Mind Body Seven: Fees and Insurance
Recent changes
- July 1, 2025: New York's behavioral health network adequacy and access rules (11 NYCRR Part 38) took effect for policies issued or renewed on or after this date. NYS DFS: Insurance Regulation 230, 11 NYCRR Part 38 (adopted text)
- May 15, 2025: The Departments of Labor, HHS and the Treasury announced they will not enforce the new parts of the 2024 parity rule until a final court decision plus 18 months, and are reconsidering the rule. U.S. Department of Labor: Statement regarding enforcement of the final rule on requirements related to MHPAEA
- September 23, 2024: The 2024 federal parity rule was published, effective November 22, 2024, generally applying to group plan years beginning on or after January 1, 2025. Federal Register: Requirements Related to the Mental Health Parity and Addiction Equity Act
Reviewed by Dr. Beata Lewis, MD, Founder and Clinical Director, board-certified in adult psychiatry, child and adolescent psychiatry, and integrative medicine on November 8, 2026. Facts checked against the sources above on November 8, 2026. This guide is general education, not medical advice, a diagnosis or a treatment plan, and reading it does not make you a patient of Mind Body Seven. For advice about your situation, talk with a licensed clinician.