Mandated Benefits

Mandated benefits, also called state required benefits, help address underinsurance by requiring private health insurance carriers to include specific services as covered benefits. [Note: states may also create mandates for private health insurers to cover specific types of providers, such as acupuncturists, and/or beneficiaries, such as adoptee children or adult dependents with disabilities.] State legislatures across the country have passed mandated benefit laws to ensure that individuals who are covered by private insurance have access to certain benefits such as early intervention, hearing aids, services for autism, or medical foods. Sometimes mandated benefits are for services such as newborn and infant hearing screenings, lead poisoning screenings, and childhood immunizations. These types of mandated benefits have the potential to save costs to the health care system as a whole by catching conditions before they become severe and expensive to treat.

There are many types of private health plans: individual, small group, large group, self-funded or self-insured, and fully funded. Some of these plans are exempt from providing state mandated benefits. For example, companies that self-insure are exempt from state mandated benefit laws. Instead of contracting for health insurance coverage for their employees, self-insured companies pay for employees’ and their dependents’ health care costs directly, usually using a health plan to administer the benefits. Self-insured employers are exempt from all state mandated benefit laws under the provisions of the federal ERISA (Employee Retirement Income Security Act) law. They may choose to follow state laws, but they are not required to do so. Federal Employee Health Benefits plans are also exempt from providing state mandated benefits.

It is important to understand that state-specific statutes determine the parameters of a particular mandated benefit, and that there is variation in what a plan actually covers from state-to-state. States may vary in terms of the type of health plan affected by the law, who they make eligible for a given benefit, what it covers, or the dollar amount an insurer may be obligated to pay for an enrollee receiving the benefit. For example, a mandate for mental health parity may mean unrestricted access to mental health services in one state or within a particular type of health plan, or it may mean that individuals can only receive a certain number of mental health visits or hospital days if those benefits are also restricted for physical health services. Learn more about state laws that mandate or regulate mental health benefits  on the National Conference of State Legislators website. 

Early Intervention Ten states have a mandated benefit for Early Intervention services for children from birth to age three. They include Colorado, Connecticut, Indiana, Massachusetts, Maine, New Mexico, New Hampshire, New York, Rhode Island, and Virginia. This means that private insurance carriers in these states must cover Early Intervention services. But, as noted above, there is state-to-state variability. In Colorado and Connecticut, the mandated Early Intervention benefit covers at least $6,000 worth of services per child per year. In Rhode Island and Virginia, the annual per child maximum is $5,000. In Maine, New Hampshire, and New Mexico the benefit ranges from $3,200-$3,500 per child per year. With Medic­aid and CHIP providing Early Intervention coverage for low-income children and commercial insurers providing coverage for most middle and higher-income children, state-appropriated public health funds can be used to finance Early Intervention services for uninsured children or to pick up expenses in excess of the private insurance cap. The net effect is to ensure nearly universal access to Early Intervention in these states for children aged birth to three with, or at risk for, developmental delays. Learn more about the use of private insurance for early intervention services on the Early Childhood Technical Assistance (ECTA) Center website.

Hearing Aids Twenty states have mandated coverage for hearing aids for children and youth with hearing loss. They are Arkansas, Colorado, Connecticut, Delaware, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Missouri, New Hampshire, New Jersey, New Mexico, North Carolina, Oklahoma, Oregon, Rhode Island, Tennessee, and Wisconsin. Coverage varies by state, as each state sets its own standards for any age restrictions, amount and duration of the benefit, and provider qualifications. For example in Connecticut, where hearing aids are considered durable medical equipment, insurers can limit the benefit to $1,000 every 2 years for children 12 and younger. In Oregon, the maximum benefit is $4,000 every 4 years for children 18 and younger; children older than 18 are eligible if they are still attending an accredited educational institution. In order to qualify for coverage, a licensed physician and/or licensed audiologist must verify the child or youth’s hearing loss (either partial or total). States may decide to include coverage for other services and supplies related to hearing screening and treatment. For example, Colorado includes language to provide coverage for the initial assessment, fitting, adjustments and auditory training necessary for effective hearing aid use. In New Mexico, coverage includes ear molds to ensure optimal fit. For more information about state insurance mandates for hearing aids, visit the American Speech-Language-Hearing Association (ASLHA) website.

Autism In 2001, Indiana was the first state to create a health insurance mandate for autism services. Since then, 44 additional states, the District of Columbia and the U.S. Virgin Islands have passed autism insurance reform. As with all state mandates, the amount, scope, and duration of the benefit varies from state to state. In Alaska, the autism benefit includes applied behavioral analysis (ABA), is limited to individuals younger than 21, and employers with 20 or fewer employees are exempt from providing autism services. In Ohio, individual and group health plans must provide screening, diagnosis, and treatment of autism. There is a 20 visit per year limit each for speech and language, occupational, and physical therapy. Applied behavioral analysis is also covered. Services are subject to prior authorization and must be prescribed by a developmental pediatrician or psychologist who has received training about autism. While there is no limit on the number of medically necessary autism visits an individual younger than 21 can receive, in Pennsylvania, legislation from July 2008 limits the dollar amount of services to $36,000 per year. Services include psychiatric care, psychological care, rehabilitative care, applied behavioral analysis, therapeutic care, and pharmacy care, as well as services that prevent a child from losing treatment gains and regressing. Other states with autism benefit mandates include Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Iowa, Illinois, Kansas, Kentucky, Main, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Texas, Utah, Vermont, Virginia, Washington, West Virginia, and Wisconsin. For more information about mandated benefits for autism, visit the Autism Insurance Reform section of the Autism Speaks website.

Medical Foods Another important mandated benefit for CYSHCN is medical foods. Children with genetic or metabolic disorders often require medical foods such as Modified Low Protein Foods (MLPFs), dietary supplements, enteral feeding supplies, formula, or other dietary treatments. Thirty-five states have legislative mandates for private insurance coverage of medical foods for conditions such as phenylketonuria (PKU), galactosemia (GALT), and maple syrup urine disease (MSUD). These states are Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Utah, Vermont, Washington, and Wyoming. In six of these states, the medical food mandate is limited to coverage of PKU only. As with other mandates, the benefit varies by state. In Arizona, private health insurance must cover medical foods to treat inherited metabolic disorders and diseases screened for under the newborn screening program. Accountable Care Organizations (ACOs) must also cover medical foods to treat eosinophilic gastrointestinal disorder. Health plans must cover at least 50% of costs, up to a maximum of $5,000 per year. ACOs must cover at least 75% of the cost of amino acid‑based formula; the maximum ACO benefit for formula is $20,000 per year. In Kentucky, the private health insurance mandate covers formula, amino acid modified preparations, and low protein modified food products to treat all inborn errors of metabolism. The annual maximum benefit for formula is $25,000; for low protein modified foods, the annual maximum benefit is $4,000.

Learn more about State Statutes & Regulations on Dietary Treatment of Disorders Identified through Newborn Screening on the Catalyst Center website.