Health Insurance - Mental Health and Substance Use Disorders - Codification of Federal Requirements

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*sb0205*

SENATE BILL 205
J5 6lr0035
(PRE–FILED) CF HB 280
By: Chair, Finance Committee (By Request – Departmental – Maryland Insurance
Administration)
Requested: September 16, 2025
Introduced and read first time: January 14, 2026
Assigned to: Finance
Committee Report: Favorable
Senate action: Adopted
Read second time: February 7, 2026

CHAPTER ______

AN ACT concerning 1

Health Insurance – Mental Health and Substance Use Disorders – Codification 2
of Federal Requirements 3

FOR the purpose of codifying in State law certain provisions of the Code of Federal 4
Regulations related to mental health parity and clarifying the authority of the 5
Maryland Insurance Adminis tration to enforce certain laws; requiring health 6
insurance carriers to collect and report on data related to access to benefits in a 7
certain manner; requiring health insurance carriers to provide benefits for certain 8
mental health conditions or substance use disorders under certain circumstances; 9
requiring health insurance carriers to explain differences in access to care under 10
certain circumstances; requiring the Maryland Insurance Commissioner to review 11
reports from carriers and provide notice to health insurance carriers of 12
noncompliance with State law and regulation s; and generally relating to 13
requirements for health insurance related to mental health and substance use 14
disorders. 15

BY repealing and reenacting, with amendments, 16
Article – Insurance 17
Section 15–144(a), (c)(1) and (3)(ii), (d), (e), (i)(1), (k), and (l)(1) 18
Annotated Code of Maryland 19
(2017 Replacement Volume and 2025 Supplement) 20

BY adding to 21
2 SENATE BILL 205

Article – Insurance 1
Section 15–144(c)(7) 2
Annotated Code of Maryland 3
(2017 Replacement Volume and 2025 Supplement) 4

BY repealing and reenacting, without amendments, 5
Article – Insurance 6
Section 15–144(o) 7
Annotated Code of Maryland 8
(2017 Replacement Volume and 2025 Supplement) 9

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 10
That the Laws of Maryland read as follows: 11

Article – Insurance 12

15–144. 13

(a) (1) In this section the following words have the meanings indicated. 14

(2) “Carrier” means: 15

(i) an insurer that holds a certificate of authority in the State and 16
provides health insurance in the State; 17

(ii) a health maintenance organization that is licensed to operate in 18
the State; 19

(iii) a nonprofit health service plan that is licensed to operate in the 20
State; or 21

(iv) any other person or organization that provides health benefit 22
plans subject to State insurance regulation. 23

(3) “CORE TREATMENT ” MEANS A STANDARD TRE ATMENT OR 24
COURSE OF TREATMENT , THERAPY, SERVICE, OR INTERVENTION INDI CATED BY 25
GENERALLY RECOGNIZED INDEPENDENT STANDARD S OF CURRENT MEDICAL 26
PRACTICE. 27

[(3)] (4) “Health benefit plan” means: 28

(i) for a large group or blanket plan, a health benefit plan as defined 29
in § 15–1401 of this title; 30

(ii) for a small group plan, a health benefit plan as defined in § 31
15–1201 of this title; 32

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(iii) for an individual plan: 1

1. a health benefit plan as defined in § 15–1301(l) of this title; 2
or 3

2. an individual health benefit plan as defined in § 4
15–1301(o) of this title; 5

(iv) short–term limited duration insurance as defined in § 15–1301(s) 6
of this title; or 7

(v) a student health plan as defined in § 15–1318(a) of this title. 8

[(4)] (5) “Medical/surgical benefits” has the meaning stated in 45 C.F.R. 9
§ 146.136(a) and 29 C.F.R. § 2590.712(a). 10

[(5)] (6) (I) “Mental health benefits” [has the meaning stated in 45 11
C.F.R. § 146.136(a) and 29 C.F.R. § 2590.712(a) ] MEANS BENEFITS WITH RESPECT TO 12
ITEMS OR SERVICES FOR MENTAL HEALTH CONDITIONS THAT ARE DEFINED UNDER 13
THE TERMS OF A HEALTH BENEFIT PLAN AND IN ACCORDANCE WITH A PPLICABLE 14
FEDERAL AND STATE LAW, INCLUDING REQUIREMENTS THAT: 15

1. ANY CONDITION DEFINED UNDER THE TERMS OF THE 16
HEALTH BENEFIT PLAN AS BEING OR AS NOT BEING A MENTAL HEALTH CONDITION 17
BE DEFINED CONSISTEN T WITH GENERALLY REC OGNIZED INDEPENDENT 18
STANDARDS OF CURRENT MEDICAL PRACTICE AND INCLUDE ALL CONDITIONS , 19
EXCEPT FOR SUBSTANCE USE DISORDERS, COVERED UNDER THE HEALTH BENEFIT 20
PLAN THAT: 21

A. FALL UNDER ANY OF TH E DIAGNOSTIC CATEGOR IES 22
LISTED IN THE MENTAL , BEHAVIORAL, AND NEURODEVELOPMENT AL DISORDERS 23
CHAPTER, OR EQUIVAL ENT CHAPTER , OF THE MOST RECENT VERSION OF THE 24
WORLD HEALTH ORGANIZATION’S INTERNATIONAL CLASSIFICATION OF DISEASES 25
ADOPTED BY THE FEDERAL DEPARTMENT OF HEALTH AND HUMAN SERVICES; OR 26

B. ARE LISTED IN THE MO ST RECENT VERSION OF THE 27
AMERICAN PSYCHIATRIC ASSOCIATION’S DIAGNOSTIC AND STATISTICAL MANUAL 28
OF MENTAL DISORDERS; AND 29

2. TO THE EXTENT GENERA LLY RECOGNIZED 30
INDEPENDENT STANDARD S OF CURRENT MEDICAL PRACTICE DO NOT ADDR ESS 31
WHETHER A CONDITION IS A MENTAL HEALTH C ONDITION, THE CONDITION BE 32
DEFINED IN ACCORDANCE WITH APPLICABLE FEDERAL AND STATE LAW. 33

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(II) “MENTAL HEALTH BENE FITS” DOES NOT INCLUDE 1
MEDICAL/SURGICAL BENEFITS OR SUBSTANCE USE DISORDER BENEFITS. 2

[(6)] (7) “Nonquantitative treatment limitation” means treatment 3
limitations as defined in 45 C.F.R. § 146.136(a) and 29 C.F.R. § 2590.712(a). 4

[(7)] (8) (i) “Parity Act” means the Paul Wellstone and Pete Domenici 5
Mental Health Parity and Addiction Equity Act of 2008, as amended. 6

(ii) “Parity Act” includes 45 C.F.R. § 146.136, 29 C.F.R. § 2590.712, 7
and any other related federal regulations found in the Code of Fed eral Regulations to 8
implement or enforce the Paul Wellstone and Pete Domenici Mental Health Parity and 9
Addiction Equity Act of 2008. 10

[(8)] (9) “Parity Act classification” means: 11

(i) inpatient in–network benefits; 12

(ii) inpatient out–of–network benefits; 13

(iii) outpatient in–network benefits; 14

(iv) outpatient out–of–network benefits; 15

(v) prescription drug benefits; and 16

(vi) emergency care benefits. 17

[(9)] (10) “Product” has the meaning stated in § 15–1309(a)(3) of this title. 18

[(10)] (11) (I) “Substance use disorder benefits” [has the meaning stated 19
in 45 C.F.R. § 146.136(a) and 29 C.F.R. § 2590.712(a)] MEANS BENEFITS WITH RESPECT 20
TO ITEMS OR SERVICES FOR SUBSTANCE USE DISORDERS THAT ARE DEFINED UNDER 21
THE TERMS OF A HEALTH BENEFIT PLAN AND IN ACCORDANCE WITH A PPLICABLE 22
FEDERAL AND STATE LAW, INCLUDING REQUIREMENTS THAT: 23

1. ANY DISORDER DEFINED UNDER THE TERMS OF T HE 24
HEALTH BENEFIT PLAN AS BEING OR AS NOT BEING A SUBSTANCE USE DISORDER BE 25
DEFINED CONSISTENT W ITH GENERALLY RECOGNIZED INDEPENDENT STANDARDS 26
OF CURRENT MEDICAL P RACTICE AND INCLUDE ALL DISORDERS COVERED UNDER 27
THE HEALTH BENEFIT PLAN THAT: 28

A. FALL UNDER ANY OF TH E DIAGNOSTIC CATEGOR IES 29
LISTED AS A MENTAL O R BEHAVIORAL DISORDE R DUE TO PSYCHOACTIV E 30
SUBSTANCE USE, OR EQUIVALENT CATEGO RY, IN THE MENTAL , BEHAVIORAL, AND 31
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NEURODEVELOPMENTAL DISORDERS CHAPTER, OR EQUIVALENT CHAPTER, OF THE 1
MOST RECENT VERSION OF THE WORLD HEALTH ORGANIZATION’S INTERNATIONAL 2
CLASSIFICATION OF DISEASES ADOPTED BY T HE FEDERAL DEPARTMENT OF 3
HEALTH AND HUMAN SERVICES; OR 4

B. ARE LISTED AS A SUBSTANCE–RELATED AND 5
ADDICTIVE DISORDER, OR EQUIVALENT CATEGORY, IN THE MOST RECENT VERSION 6
OF THE AMERICAN PSYCHIATRIC ASSOCIATION’S DIAGNOSTIC AND STATISTICAL 7
MANUAL OF MENTAL DISORDERS; AND 8

2. TO THE EXTENT GENERA LLY RECOGNIZED 9
INDEPENDENT STANDARD S OF CURRENT MEDICAL PRACTICE DO NOT ADDR ESS 10
WHETHER A DISORDER I S A SUBSTANCE USE DI SORDER, THE DISORDER SHALL BE 11
DEFINED UNDER THE TERMS OF THE HEALTH BENEFIT PLAN IN ACCORDANCE WITH 12
APPLICABLE FEDERAL AND STATE LAW. 13

(II) “SUBSTANCE USE DISORDE R BENEFITS ” DOES NOT 14
INCLUDE MEDICAL/SURGICAL BENEFITS OR MENTAL HEALTH BENEFITS. 15

(c) (1) Each carrier subject to this section shall: 16

(i) for each Parity Act classification, identify all nonquantitative 17
treatment limitations that are applied to mental health benefits, substance use disorder 18
benefits, and medical/surgical benefits; 19

(ii) in accordance with the Parity Act AND ANY STATE 20
REGULATIONS ADOPTED UNDER SUBSECTION (O) OF THIS SECT ION, perform and 21
document comparative analyses of the design and application of all nonquantitative 22
treatment limitations imposed on mental health benefits and substance use disorder 23
benefits; 24

(III) 1. COLLECT AND EVALUATE RELEVANT DATA IN A 25
MANNER REA SONABLY DESIGNED TO ASSESS THE IMPACT OF EACH 26
NONQUANTITATIVE TREATMENT LIMITATION ON RELEVANT OUTCOMES RE LATED 27
TO ACCESS TO MENTAL HEALTH AND SUBSTANCE USE DISORDER BENEFIT S AND 28
MEDICAL/SURGICAL BENEFITS; AND 29

2. WITH RESPECT TO NONQ UANTITATIVE TREATM ENT 30
LIMITATIONS RELATED TO NETWORK COMPOSITI ON, COLLECT AND EVALUATE 31
RELEVANT DATA IN A MANNER REASONABLY DESIGNED TO ASSESS THE AGGREGATE 32
IMPACT OF ALL THE NO NQUANTITATIVE TREATMENT LIMITATIONS ON A CCESS TO 33
MENTAL HEALTH AND SU BSTANCE USE DISORDER BENEFITS AND 34
MEDICAL/SURGICAL BENEFITS; 35

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[(iii)] (IV) provide the comparative analysis , INCLUDING THE 1
EVALUATION OF RELEVA NT DATA , for each nonquantitative treatment limitation 2
requested by the Commissioner within: 3

1. 15 working days after a written request; or 4

2. if adopted by the federal government, less than 15 working 5
days to align with the federal rule or regulation; 6

[(iv)] (V) within 30 days after a written request, provide the 7
comparative analysis for each nonquantitative treatment limitation and related in 8
operation data analysis, if available and requested by a member in accordance with the 9
Parity Act disclosure requirements or, for members with individual plans, in accordance 10
with subsection [(e)(7)] (E)(8) of this section; and 11

[(v)] (VI) submit the reports required under paragraph (2) of this 12
subsection. 13

(3) The report submitted under paragraph (2) of this subsection shall 14
include the following information: 15

(ii) the results of a comparative analysis , INCLUDING THE 16
EVALUATION OF RELEVA NT DATA , conducted by the carrier on not fewer than five 17
nonquantitative treatment limitations selected by the Commissioner in accordance with 18
paragraph (5) of this subsection; and 19

(7) IF THE RELEVANT DATA EVALUATED UNDER PARAGRAPH (1)(III) 20
OF THIS SUBSECTION I NDICATE THAT THE NON QUANTITATIVE TREATME NT 21
LIMITATION CONTRIBUT ES TO MATERIAL DIFFE RENCES IN ACCESS TO MENTAL 22
HEALTH AND SUBSTANCE USE DISORDER BENEFIT S AS COMPARED TO 23
MEDICAL/SURGICAL BENEFITS IN A PARITY ACT CLASSIFICATION: 24

(I) THE DIFFERENCES SHALL BE CONSIDERED A STRO NG 25
INDICATOR OF NONCOMP LIANCE WITH THE PARITY ACT AND MAY SUBJECT T HE 26
CARRIER TO THE PROVISIONS OF SUBSECTION (K) OF THIS SECTION; AND 27

(II) THE CARRIER SHALL SUBMIT TO THE COMMISSIONER 28
DOCUMENTATION OF REASONABLE ACTIONS THAT HAVE BEEN OR ARE BEING TAKEN 29
TO ADDRESS THE MATER IAL DIFFERENCES TO E NSURE COMPLIANCE , IN 30
OPERATION, WITH THE PARITY ACT WITHIN 15 WORKING DAYS OF A REQUEST FROM 31
THE COMMISSIONER FOR THE DOCUMENTATION IN ACCORDANCE WITH THIS 32
SECTION. 33

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(d) (1) A carrier subject to this section shall conduct a comparative analysis 1
for the nonquantitative treatment limitations selected under subsection (c)(5) of this section 2
as nonquantitative treatment limitations are: 3

(i) written; and 4

(ii) in operation. 5

(2) The comparative analysis of the nonquantitative treatment limitations 6
selected under subsection (c)(5) of this section shall: 7

(i) demonstrate that the processes, strategies, evidentiary 8
standards, or other factors used in designing and applying each selected nonquantitative 9
treatment limitation to mental health benefits and substance use disorder benefits in each 10
Parity Act classification are comparable to, and are applied no more stringently than, the 11
processes, strategies, evidentiary standards, or other factors used in designing and 12
applying each selected nonquantitative treatment limitation to medical/surgical benefits 13
within the same Parity Act classification; [and] 14

(II) DEMONSTRATE THAT NON E OF THE INFORMATION , 15
EVIDENCE, SOURCES, OR STANDARDS ON WHIC H A FACTOR OR EVIDEN TIARY 16
STANDARD IS BASED AR E BIASED OR NOT OBJE CTIVE IN A MANNER TH AT 17
DISCRIMINATES AGAINS T MENTAL HEALTH OR SUBSTANCE USE DISORD ER 18
BENEFITS AS COMPARED TO MEDICAL/SURGICAL BENEFITS; 19

(III) IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH (3) 20
OF THIS SUBSECTION, DEMONSTRATE THAT THE HEALTH BENEFIT PLAN PROVIDES 21
MEANINGFUL BENEFITS FOR EACH COVERED MEN TAL HEALTH CONDITION AND 22
SUBSTANCE USE DISORD ER IN EVERY PARITY ACT CLASSIFICATION IN WHICH 23
MEDICAL/SURGICAL BENEFITS ARE PROVIDED; AND 24

[(ii)] (IV) include all information required under the Parity Act AND 25
ANY STATE REGULATIONS ADOPTED UNDER SUBSECTION (O) OF THIS SECTION. 26

(3) (I) THE BENEFITS PROVIDED FOR THE MENTAL HEALT H 27
CONDITION OR SUBSTANCE USE DISORDER SHALL BE COMPARED TO THE BENEFITS 28
PROVIDED FOR MEDICAL CONDITIONS AND SURGI CAL PROCEDURES IN EA CH 29
PARITY ACT CLASSIFICATION TO DETERMINE WHETHER BENEFITS ARE 30
MEANINGFUL. 31

(II) EXCEPT AS PROVIDED UNDER SUBPARAGRAPH (III) OF THIS 32
PARAGRAPH, BENEFITS ARE NOT MEA NINGFUL UNLESS COVER AGE IS PROVIDED 33
FOR A CORE TREATMENT FOR THE MENTAL HEALTH CONDITION OR SUBSTANCE USE 34
DISORDER IN EACH CLASSIFICATION IN WHICH COVERAGE IS PROVIDED FOR A CORE 35
TREATMENT FOR ONE OR MORE MEDICAL CONDITIONS OR SURGICAL PROCEDURES. 36
8 SENATE BILL 205

(III) IF THERE IS NO CORE TREATMENT FOR A COVERED MENTAL 1
HEALTH CONDITION OR SUBSTANCE USE DISORD ER WITH RESPECT TO A PARITY 2
ACT CLASSIFICATION, THE HEALTH BENEFIT PLAN: 3

1. IS NOT REQUIRED TO PROVIDE BENEFITS FOR A CORE 4
TREATMENT FOR THE COVERED MENTAL HEALTH CONDITION OR SUBSTANCE USE 5
DISORDER IN THAT PARITY ACT CLASSIFICATION; AND 6

2. IS REQUIRED TO PROVI DE BENEFITS FOR THE 7
COVERED ME NTAL HEALTH CONDITION OR SUBSTANCE USE DISORDER IN EVERY 8
PARITY ACT CLASSIFICATION IN WHICH MEDICAL /SURGICAL BENEFITS AR E 9
PROVIDED. 10

[(3)] (4) Regardless of whether it was used before the Parity Act was 11
enacted and as requested by the [Commission] COMMISSIONER, a carrier shall perform 12
and provide a comparative analysis for each process, strategy, evidentiary standard, or 13
other factor used in designing and applying a selected nonquantitative treatment limitation 14
used during a reporting period. 15

(e) In providing the analysis required under subsection (d) of this section, a 16
carrier shall: 17

(1) identify the factors used to determine that a nonquantitative treatment 18
limitation will apply to a benefit, including: 19

(i) the sources for the factors; AND 20

[(ii) the factors that were considered but rejected; and] 21

[(iii)] (II) if a factor was given more weight than another, the reason 22
for the difference in weighting; 23

(2) identify and define the specific evidentiary standards used to define the 24
factors and any other evidence relied on in designing each nonquantitative treatment 25
limitation; 26

(3) include the results of the audits, reviews, and analyses performed on 27
the nonquantitative treatment limitations identified under subsection (c)(5) of this section 28
to conduct the analysis required under subsection (d)(2) of this section for the plans and 29
products as written; 30

(4) include the RELEVANT DATA EVALUA TED UNDER SUBSECTION 31
(C)(1)(III) OF THIS SECTION AND THE results of the audits, reviews, and analyses 32
performed on the nonquantitative treatment limitations identified under subsection (c)(5) 33
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of this section to conduct the analysis required under subsection (d)(2) of this sec tion for 1
the plans and products as in operation; 2

(5) IF THE RELEVANT DATA EV ALUATED UNDER SUBSEC TION 3
(C)(1)(III) OF THIS SECTION INDI CATE THAT THE NONQUA NTITATIVE TREATMENT 4
LIMITATION CONTRIBUT ES TO MATERIAL DIFFE RENCES IN ACCESS TO MENTAL 5
HEALTH AND SU BSTANCE USE DISORDER BENEFITS AS COMPARED TO 6
MEDICAL/SURGICAL BENEFITS IN A PARITY ACT CLASSIFICATION , INCLUDE AN 7
EXPLANATION OF THE D IFFERENCES AND A DIS CUSSION OF THE ACTIO NS THAT 8
HAVE BEEN OR ARE BEING TAKEN BY THE CARRIER TO ADDRESS THE DIFFERENCES; 9

[(5)] (6) identify the measures used to ensure comparable design and 10
application of nonquantitative treatment limitations that are implemented by the carrier 11
and any entity delegated by the carrier to manage mental health benefits, substance use 12
disorder benefits, or medical/surgical benefits on behalf of the carrier; 13

[(6)] (7) disclose the specific findings and conclusions reached by the 14
carrier that indicate that the health benefit plan is in compliance with this section and the 15
Parity Act; and 16

[(7)] (8) identify the process used to comply with the Parity Act disclosure 17
requirements for mental health benefits, substance use disorder benefits, and 18
medical/surgical benefits, including: 19

(i) the criteria for a medical necessity determination; 20

(ii) reasons for a denial of benefits; and 21

(iii) in connection with a member’s request for individual or group 22
plan information and for purposes of filing an internal coverage or grievance matter and 23
appeals, plan documents that contain information about processes, strategies, evidentiary 24
standards, and any other factors used to apply a nonquantitative treatment limitation. 25

(i) (1) The Commissioner shall: 26

(i) review each report submitted in accordance with subsections (c), 27
(d), and (f) of this section to assess each carrier’s compliance with the Parity Act AND ANY 28
STATE REGULATIONS ADOPTED UNDER SUBSECTION (O) OF THIS SECTION for each 29
Parity Act classification; 30

(ii) notify a carrier in writing of any noncompliance with the Parity 31
Act OR ANY STATE REGULATIONS ADOPT ED UNDER SUBSECTION (O) OF THIS 32
SECTION before issuing an administrative order; and 33

(iii) within 90 days after the notice of noncompliance is issued, allow 34
the carrier to: 35
10 SENATE BILL 205

1. submit a compliance plan to the Administration to comply 1
with the Parity Act AND ANY STATE REGULATIONS ADOPTED UNDER SUBSECTION (O) 2
OF THIS SECTION; and 3

2. reprocess any claims that were improperly denied, in 4
whole or in part, because of the noncompliance. 5

(k) If, as a result of the review required under subsection (i)(1)(i) of this section, 6
the Commissioner finds that the carrier failed to comply with the Parity Act OR ANY STATE 7
REGULATIONS ADOPTED UNDER SUBSECTION (O) OF THIS SECTION , and did not 8
submit a compliance plan to adequately correct the noncompliance, the Commissioner may: 9

(1) issue an administrative order that requires: 10

(i) the carrier or an entity delegated by the carrier to cease the 11
noncompliant conduct or practice; or 12

(ii) the carrier to provide a payment that has been denied improperly 13
because of the noncompliance; or 14

(2) impose any other penalty or take any action as authorized: 15

(i) for an insurer, nonprofit health service plan, or any other person 16
subject to this section, under this article; or 17

(ii) for a health maintenance organization, under this article or the 18
Health – General Article. 19

(l) (1) A carrier shall have the burden of persuasion in demonstrating that its 20
design and application of a nonquantitative treatment limitation complies with the Parity 21
Act AND ANY STATE REGULATIONS ADO PTED UNDER SUBSECTIO N (O) OF THIS 22
SECTION: 23

(i) in any review conducted by the Commissioner under this section; 24
or 25

(ii) in any complaint investigation or market conduct action 26
undertaken by the Commissioner that involves the application of the Parity Act. 27

(o) The Commissioner shall, in consultation with interested stakeholders, adopt 28
regulations to implement this section, including to ensure uniform definitions and 29
methodology for the reporting requirements established under this section. 30

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 31
1, 2026. 32