The Mental Health Parity Act
Effective January 1, 1998
Following is the complete text of the new Mental Health Parity Act recently passed by the United States Congress. This act appears here as a courtesy and act of good will towards our U.S. brothers and sisters from those of us in Australia who recognise that mental health rights are universal necessities.
S 2031 IS
To provide health plan protections for individuals with a mental illness.
IN THE SENATE OF THE UNITED STATE
August 2, 1996
Mr. DOMENICI (for himself, Mr. WELLSTONE, Mr. SIMPSON, Mr. CONRAD, Mr. WARNER, Mr. SPECTER, Mr. REID, Mr. DODD, Mr. GRASSLEY, Mrs. KASSEBAUM, Mr. KENNEDY, Mr. BURNS, Mr. HARKIN, and Mr.MOYNIHAN) introduced the following bill; which was read twice and referred to the Committee on Labor and Human sources.
To provide health plan protections for individuals with a mental illness. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled
SECTION 1. SHORT TITLE.
- This Act may be cited as the `Mental Health Parity Act of 1996'.
SEC. 2. PLAN PROTECTIONS FOR INDIVIDUALS WITH A MENTAL ILLNESS.
- (a) PERMISSIBLE COVERAGE LIMITS UNDER A GROUP HEALTH PLAN-
(1) AGGREGATE LIFETIME LIMITS-
SEC. 3. DEFINITIONS.
(2) ANNUAL LIMITS-
- (A) IN GENERAL- With respect to a group health plan offered by a health insurance issuer, that applies an aggregate lifetime limit to plan payments for medical or surgical services covered under the plan, if such plan also provides a mental health benefit such plan shall--
(i) include plan payments made for mental
health services under the plan in such aggregate lifetime limit; or
(ii) establish a separate aggregate lifetime limit applicable to plan payments for mental health services under which the dollar amount of such limit (with respect to mental health services) is equal to or greater than the dollar amount of the aggregate lifetime limit on plan payments for medical services.
- (B) NO LIFETIME LIMIT- With respect to a group health plan offered by a health insurance issuer, that does not apply an aggregate lifetime limit to plan payments for medical or surgical services covered under the plan, such plan may not apply an aggregate lifetime limit to plan payments for mental health services covered under the plan.
(A) IN GENERAL- With respect to a group health plan offered by a health insurance issuer, that applies an annual limit to plan payments for medical or surgical services covered under the plan, if such plan also provides a mental health benefit such plan shall--
(i)include plan payments made for mental health services under the plan in such annual limit; or
(C) SMALL EMPLOYER EXEMPTION-
(ii)establish a separate annual limit applicable to plan payments for mental health services under which the dollar amount of such limit (with respect to mental health services) is equal to or greater than the dollar amount of the annual limit on plan payments for medical or surgical services.
(B) NO ANNUAL LIMIT- With respect to a group
health plan offered by a health insurance issuer, that does not apply an annual limit to plan payments for medical or surgical
services covered under the plan, such plan may not apply an
annual limit to plan payments for mental health services covered under the plan.
(b) RULE OF CONSTRUCTION-
(1) IN GENERAL- Nothing in this section shall be construed as prohibiting a group health plan offered by a health insurance issuer, from--
(A) utilizing other forms of cost containment not prohibited under subsection (a); or
(2) NONAPPLICABILITY- This section shall not apply to--
(B)applying requirements that make distinctions
between acute care and chronic care.
(A)substance abuse or chemical dependency benefits; or
(B)health benefits or health plans paid for under
title XVIII or XIX of the Social Security Act.
(1) IN GENERAL-This section shall not apply to plans maintained by employers that employ less than 26 employees.
(2) APPLICATION OF CERTAIN RULES IN DETERMINATION OF EMPLOYER SIZE- For purposes of this subsection--
(A) APPLICATION OF AGGREGATION RULE FOR EMPLOYERS- All persons treated as a single employer under subsection (b),(c), (m), or (o) of section 414 of the Internal Revenue Code of 1986 shall be treated as 1 employer.
(B) EMPLOYERS NOT IN EXISTENCE IN PRECEDING YEAR-
In the case of an employer which was not in existence throughout the preceding calendar year, the determination of whether such employer is a small employer shall be based on the average number of employees that it is reasonably expected such employer will employ on business days in the current calendar year.
(C) PREDECESSORS- Any reference in this subsection to an employer shall include a reference to any predecessor of such employer.
For purposes of this Act:
(1) GROUP HEALTH PLAN-
(A) IN GENERAL- The term `group health plan' means an employee welfare benefit plan (as defined in section 3(1) of the Employee Retirement Income Security Act of 1974) to the extent that the plan provides medical care (as defined in paragraph (2)) and including items and services paid for as medical care) to employees or their dependents (as defined
under the terms of the plan) directly or through insurance, reimbursement, or otherwise.
(2) HEALTH INSURANCE COVERAGE- The term `health insurance coverage' means benefits consisting of medical care (provided directly, through insurance or reimbursement, or otherwise and including items and services paid for as medical care) under any hospital or medical service policy or certificate,
hospital or medical service plan contract, or health maintenance
organization contract offered by a health insurance issuer.
(B) MEDICAL CARE- The term `medical care' means amounts paid for--
(i) the diagnosis, cure, mitigation, treatment, or prevention of disease, or amounts paid for the purpose of affecting any structure or function of the body,
(ii) amounts paid for transportation primarily
for and essential to medical care referred to in clause (i), and
(iii) amounts paid for insurance covering medical care referred to in clauses (i) and (ii).
(3) HEALTH INSURANCE ISSUER- The term `health insurance issuer' means an insurance company, insurance service, or insurance organization (including a health maintenance
organization, as defined in paragraph (4)) which is licensed to
engage in the business of insurance in a State and which is subject to State law which regulates insurance (within the meaning of section 514(b)(2) of the Employee Retirement Income Security Act of 1974). Such term does not include a group health plan.
(4) HEALTH MAINTENANCE ORGANIZATION- The term `health maintenance organization' means--
(A) a federally qualified health maintenance organization (as defined in section 1301(a) of the Public Health
(5) STATE- The term `State' means each of the several States, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands.
(B) an organization recognized under State law as
a health maintenance organization, or
(C) a similar organization regulated under State
law for solvency in the same manner and to the same extent as such
a health maintenance organization.
For a simplified version of the highlights you may wish to read this APA version titled: Public Policy Advocacy: The Domenici-Wellstone Mental Illness Parity Provision.
FOR IMMEDIATE RELEASE
December 15, 1997
CONTACT: Mary Rappaport
PIVOTAL VICTORY FOR AMERICANS WITH SEVERE MENTAL ILLNESSES
Mental Health Parity Law to Be Fully Enforced, Administration Sources Reveal
Arlington, VA -- The National Alliance for the Mentally Ill (NAMI) today lauded the Clinton Administration for standing behind a landmark law that ends at least some health insurance discrimination against millions of Americans with severe mental illnesses. The White House is expected to release a formal decision sometime next week.
Despite intense pressure from special interests to allow a legal
loophole, the Administration has decided that employers must first
comply with the Mental Health Parity Act of 1996 before seeking an
exemption because of higher health insurance costs.
"This is a tremendous victory, an important first step in getting equal treatment for mental illness," said NAMI Executive Director Laurie Flynn. "The Administration move in favor of American families sends loud and clear message discrimination is wrong. We applaud the President for his courage in putting people first."
The parity law, which requires annual and lifetime benefits for mental illnesses to be equal to that offered for other disorders, allows employers to be exempted if their costs rise more than one percent as a result of complying with the law.
According to sources today, the Administration has ruled that employers must first comply with the law in 1998 and develop a cost history (retrospective data) before seeking an exemption. By contrast, some business groups had argued that firms be allowed to use the exemption based on estimates of higher costs (prospective data), thereby relieving them of the responsibility to ever comply.
"The days of being cast as second-class citizens from a health care system historically indifferent to their needs are over," said Flynn. "This modest anti-discrimination law eliminated the double standard held against millions of Americans suffering from brain disorders and instead gives them renewed hope for reestablishing full and productive lives."
The Administration is also expected to require disclosure of the names of firms seeking exemption, a hotly debated issue opposed by many business groups.
While special interests were pressuring the White House to draft
regulations that would weaken the law, researchers at the Rand
Corporation and the University of California at Los Angeles found that mental health benefits would not add significantly to insurers costs. The Rand study concluded that parity will increase costs by only about $1 per employee each year. Additionally, a survey conducted for NAMI by William M. Mercer, Inc., indicated little resistance by employers to comply with the new law, with 85 percent of businesses familiar with the law either in compliance or planning to make changes to comply with the new by the end of the year.