From the department of labor…

“Fact Sheet: The Mental Health Parity Act

U.S. Department of Labor
Employee Benefits Security Administration
October 2008

The Mental Health Parity Act (MHPA), signed into law on September 26, 1996, requires that annual or lifetime dollar limits on mental health benefits be no lower than any such dollar limits for medical and surgical benefits offered by a group health plan or health insurance issuer offering coverage in connection with a group health plan.

MHPA applies to group health plans for plan years beginning on or after January 1, 1998.  The original sunset provision (providing that the parity requirements would not apply to benefits for services furnished on or after September 30, 2001) has been extended several times. If you have questions about the sunset provision, contact the EBSA office nearest you.

The law:

• Generally requires parity of mental health benefits with medical/surgical benefits with respect to the application of aggregate lifetime and annual dollar limits under a group health plan

• Provides that employers retain discretion regarding the extent and scope of mental health benefits offered to workers and their families (including cost sharing, limits on numbers of visits or days of coverage, and requirements relating to medical necessity)

The law, however, does not apply to benefits for substance abuse or chemical dependency.

The law also contains the following two exemptions:

• Small employer exemption. MHPA does not apply to any group health plan or coverage of any employer who employed an average of between 2 and 50 employees on business days during the preceding calendar year, and who employs at least 2 employees on the first day of the plan year

• Increased cost exemption. MHPA does not apply to a group health plan or group health insurance coverage if the application of the parity provisions results in an increase in the cost under the plan or coverage of at least one percent”

Basically this means that mental illness and physical illness treatment must have the same annual limits but could have special rules such as different co-pays and deductibles or limits on visits. But this only applies if you work for a company of more than 50, it won’t raise the cost of the plan more than 1%, and you are not seeking help for substance abuse. Not a great deal of help but it was a step in the right direction and allowed for the next step, The Wellstone Act.

The new Wellstone Act changes MHPA in the following ways…

While MHPA imposes restrictions on annual and lifetime limits, it does not stop a health plan from imposing special rules for mental health benefits such as deductibles, co-pays, coinsurance and number of visits allowed. The Wellstone Act prohibits any of these types of restrictions and includes substance abuse treatment under the mental health category.

The exception under MHPA for employers with no more than 50 employees continues under the Wellstone Act.  However, the increased cost exemption changes from a 1% increase in cost to 2% in the first year and then goes back down to 1% in subsequent years. And, the plan must be in effect for more than 6 months before they can even apply for this exemption.

MHPA and the Wellstone Act do not require employers to provide mental health or substance abuse benefits.  However, if an employer chooses to do so in its group health plan, these requirements must be satisfied.  The Wellstone Act begins to apply as of the first day of the first plan year beginning after October 3, 2009 (January 1, 2010 for calendar year plans).

Popularity: 44% [?]

House Approves Bill on Mental Health Parity

“WASHINGTON — After more than a decade of struggle, the House on Wednesday passed a bill requiring most group health plans to provide more generous coverage for treatment of mental illnesses, comparable to what they provide for physical illnesses.

The vote was 268 to 148, with 47 Republicans joining 221 Democrats in support of the measure.

The Senate has passed a similar bill requiring equivalence, or parity, in coverage of mental and physical ailments. Federal law now allows insurers to discriminate, and most do so, by setting higher co-payments or stricter limits on mental health benefits.

“Illness of the brain must be treated just like illness anywhere else in the body,” said Speaker Nancy Pelosi, Democrat of California. Supporters of the House bill, including consumer groups and the American Psychiatric Association, said it would be a boon to many of the 35 million Americans who experience disabling symptoms of mental disorders each year.

Insurers and employers supported the Senate bill. Many opposed the House version, saying it would drive up costs.

President Bush endorsed the principle of mental health parity in 2002. But on Wednesday, the White House opposed the House bill, saying it “would effectively mandate coverage of a broad range of diseases.”

Both bills would outlaw health insurance practices that set lower limits on treatment or higher co-payments for mental health services than for other medical care.

Typical annual limits include 30 visits to a doctor or 30 days of hospital care for treatment of a mental disorder. Such limits would no longer be allowed if the insurer had no limits on treatment of conditions like cancer, heart disease and diabetes.

The Congressional Budget Office estimated that an earlier version of the House bill would increase premiums for group health insurance by an average of four-tenths of 1 percent. Some of the cost could be passed on to workers.

The House bill does not apply to health plans sponsored by an employer with 50 or fewer employees. Nor does it apply to coverage in the individual insurance market.

Three factors contributed to support for the legislation. First, researchers have found biological causes and effective treatments for numerous mental illnesses. Second, a number of companies now specialize in managing mental health benefits, making the costs to insurers and employers more affordable.

Finally, some doctors say that the stigma of mental illness has faded as people see members of the armed forces returning from Iraq and Afghanistan with mental disorders.

Supporters of mental health parity see it as a civil rights issue, and the debate Wednesday was filled with poignant moments.

“I have a mental illness, and I am fortunately getting the best care this country has to offer because I am a member of Congress,” said Representative Patrick J. Kennedy, Democrat of Rhode Island and chief sponsor of the House bill. Mr. Kennedy has been treated for depression and drug dependence.

The main Republican sponsor, Representative Jim Ramstad of Minnesota, a recovering alcoholic, said, “I am living proof that treatment works and recovery is real.”

The House bill is named for Senator Paul Wellstone, the Minnesota Democrat killed in a plane crash in 2002. He had a brother with severe mental illness. The main sponsor of the Senate bill, Pete V. Domenici, Republican of New Mexico, has a daughter with schizophrenia.

Under a 1996 law, health plans are forbidden to set annual or lifetime dollar limits on mental health care that are lower than the limits for other services. But insurers have gotten around the law by setting different limits on the number of outpatient visits or hospital days, and by charging different co-payments.

The protections of the House bill apply to people who need treatment for alcohol and drug abuse, as well as mental illness.

Under the bill, if an insurer chooses to provide mental health coverage, it must “include benefits” for any mental health condition listed in the latest edition of the Diagnostic and Statistical Manual of Mental Disorders, published by the American Psychiatric Association.

E. Neil Trautwein, a vice president of the National Retail Federation, a trade group, said: “Businesses will be faced with the choice of covering every single mental or substance abuse disorder listed in the diagnostic manual, or nothing at all. Neither choice is appealing.”

Among the conditions listed in the manual, critics noted, are caffeine intoxication and sleep disorders resulting from jet lag.

Nicholas M. Meyers, director of government relations at the American Psychiatric Association, said: “This is nonsense. Simply because a diagnosis is made does not obligate insurers to pay for treatment.”

Insurers could still deny coverage if they found that a service was not medically necessary.”

Popularity: 40% [?]