Legislative Analysis
Phone: (517) 373-8080
REQUIRING COVERAGE FOR MENTAL HEALTH AND
http://www.house.mi.gov/hfa
SUBSTANCE USE DISORDER SERVICES
Analysis available at
Senate Bill 27 (S-3) as reported from committee http://www.legislature.mi.gov
Sponsor: Sen. Sarah Anthony
House Committee: Insurance and Financial Services
Senate Committee: Health Policy
Complete to 4-30-24
(Enacted as Public Act 41 of 2024)
SUMMARY:
Senate Bill 27 would amend the Insurance Code to require that insurers that deliver, issued for
delivery, or renew health insurance policies in Michigan cover mental health and substance use
disorder services.
Under the bill, mental health and substance use disorder benefits in any classification would
not be allowed to be subject to financial requirements or quantitative treatment limitations
more restrictive that the predominant limitations applied to substantially all benefits provided
for medical/surgical benefits in the same classification. In addition, there could be no separate
cumulative financial requirements applicable only to mental health or substance use disorder
benefits.
Except as described below, nonquantitative treatment limitations would be allowed to be
imposed on mental health or substance use disorder benefits in any classification only if the
processes, strategies, evidentiary standards, or other factors used in developing and applying
the limitation to mental health or substance use disorder benefits were comparable to, and
applied no more stringently than, those used in developing and applying the limitation with
respect to medical/surgical benefits in the same classification.
Classification would mean any one of the following:
• Inpatient in-network.
• Inpatient out-of-network.
• Outpatient in-network.
• Outpatient out-of-network.
• Emergency services.
• Prescription drugs.
Financial requirements would mean deductibles, copayments, coinsurance, and out-
of-pocket maximums. It would not include aggregate lifetime or annual dollar limits.
Quantitative treatment limitations would mean limitations that are expressed
numerically, such as limits on benefits based on the frequency of treatment, number of
visits, days of coverage, days in a waiting period, or other similar limits on the scope
or duration of treatment. It would include the limitations described under 45 CFR
House Fiscal Agency Page 1 of 3
 146.136. 1 It would not include a complete exclusion of all benefits for a certain
condition or disorder.
Predominant and substantially all would mean those terms as defined in 45 CFR
146.136.
Subclassifications
An insurer would be allowed to divide its benefits on an outpatient basis into the following
subclassifications:
• Office visits, such as physician visits.
• Any other outpatient benefit, such as outpatient surgery, facility charges for day
treatment centers, laboratory charges, and other medical items.
In addition, if an insurance policy provides benefits through multiple tiers of in-network
providers, including a tier of preferred providers with more generous cost-sharing to
participants, the plan would be allowed to divide its benefits provided on an in-network bases
into subclassification that reflect network tiers, if the tiering is based on reasonable factors
determined in accordance with the requirements for nonquantitative treatment limits (described
above) and without regard to whether a provider provides services with respect to medical and
surgical benefits or mental health or substance use disorder benefits.
After the subclassifications were established, the policy could 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 limit that applies to substantially all medical and surgical benefits in the same
subclassification.
Federal parity requirements
The coverage required under the bill would be required to meet all applicable federal parity
requirements, including 42 USC 300gg-26 and its associated regulations. 2 An insurer that
meets the applicable federal parity requirements would be considered in compliance with the
bill if the federal requirements are not less stringent than the bill’s proposed requirements.
If a health policy applied different financial requirements to different tiers of prescription drug
benefits that are based on reasonable factors determined in accordance with the requirements
for nonquantitative treatment limits and without regard to whether a drug is generally
prescribed with respect to medical and surgical benefits or with respect to mental health or
substance use disorder benefits, the policy would be considered to have satisfied the bill’s
parity requirements with respect to prescription drugs.
Reasonable factors would include cost, efficacy, generic versus brand name drugs, and
mail order versus pharmacy pick-up.
Proposed MCL 500.3406hh
1
https://www.law.cornell.edu/cfr/text/45/146.136
2
https://www.law.cornell.edu/uscode/text/42/300gg-26
House Fiscal Agency SB 27 (S-3) as reported from House committee Page 2 of 3
BRIEF DISCUSSION:
According to committee testimony, the bill would codify provisions of the federal Mental
Health Parity and Addiction Equity Act of 2008 and associated federal guidelines. 3 According
to supporters of the bill, it is designed so that the federal protections remain in place for
Michigan residents in the event of a change in federal law.
FISCAL IMPACT:
Senate Bill 27 may result in additional costs for the state and for local units of government, to
the extent that any insurance plans that the state or local units of government utilize that are
not in compliance with the provisions of the bill would need to comply with the requirements
for mental health and substance use disorder service parity. The magnitude of the cost in
currently unknown, as the cost would be dependent on the number of plans that are not in
compliance and the cost differential with plans that do comply.
POSITIONS:
A representative of the Department of Insurance and Financial Services testified in support of
the bill. (4-18-24)
The following entities indicated support for the bill:
• Michigan Association of Health Plans (4-18-24)
• AHIP (4-18-24)
• Michigan Health and Hospital Association (4-18-24)
• Aetna (4-18-24)
• The Arc Michigan (4-18-24)
• HAP (4-18-24)
• Community Mental Health Association of Michigan (4-18-24)
• Disability Rights Michigan (4-18-24)
• Upper Peninsula Health Plan (4-18-24)
• League of Women Voters of Michigan (4-18-24)
• ACCESS (4-18-24)
• Blue Cross Blue Shield of Michigan (4-18-24)
• Inseparable (4-18-24)
• Michigan Education Special Services Association (4-25-24)
• MCG Health (4-25-24)
Legislative Analyst: Alex Stegbauer
Fiscal Analyst: Marcus Coffin
■ This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their
deliberations and does not constitute an official statement of legislative intent.
3
https://www.michigan.gov/difs/consumers/insurance/health-insurance/mental-health-parity/mental-health
House Fiscal Agency SB 27 (S-3) as reported from House committee Page 3 of 3


Statutes affected:
Substitute (S-3): 500.100, 500.8302
Senate Introduced Bill: 500.100, 500.8302
As Passed by the Senate: 500.100, 500.8302
As Passed by the House: 500.100, 500.8302
Public Act: 500.100, 500.8302
Senate Enrolled Bill: 500.100, 500.8302