Earlier this year, Georgia fined several health insurance companies who were refusing to cover mental health despite a state law mandating it. Now lawmakers are cracking down even further, drastically increasing the amount of the fines insurers could face.
Georgia lawmakers moved forward a bill that would increase fines against health insurance companies that violate mental health coverage laws, raising maximum penalties from $2,000 to $10,000 per violation after state regulators found more than 6,000 violations last year.
What’s Happening: The House Insurance Committee approved House Bill 1262 on February 19. The bill increases penalties across multiple insurance violations, including mental health parity, surprise billing, and general enforcement violations. For violations where insurers knew or should have known they were breaking the law, maximum fines would increase from $5,000 to $25,000 per violation.
What Changed: Georgia Insurance Commissioner John F. King announced fines totaling more than $20 million against 22 health insurance companies after finding violations of state and federal mental health parity laws. The violations happened despite a 2022 Georgia law requiring insurers to cover mental health and substance use disorder treatment the same way they cover physical health care.
The Violations Found: State regulators documented insurers applying benefit rules inconsistently, requiring prior authorization for services not listed as needing approval, and reprocessing claims for medical necessity reviews without clear reasons.
What’s Important: The Mental Health Parity Act of Georgia requires the Insurance Commissioner to review insurer data every year by May 15 and publish a report by August 15. The first report came out August 15, 2023, and triggered the examinations that found the violations.
The Path Forward: The increased fine bill must pass the full House and Senate before reaching the governor. If signed into law, the increased penalties would give state regulators stronger enforcement tools against insurers that continue violating mental health coverage requirements. The higher fines could make violations more costly than the savings insurers gain by denying coverage.
