Mental Health Parity

At Issue

On September 26, 1996 the Mental Health Parity Act (MHPA) was enacted and went into effect on January 1, 1998. The Act specified that companies providing mental health benefits to workers cannot make annual or lifetime dollar ceilings on those benefits any more restrictive than their ceilings on medical or surgical benefits. The Act does not mandate that health insurance plans include mental health benefits. Employers with fewer than 50 employees and those that experience more than a one-percent increase in premiums as a result of implementing the parity requirement are exempt from the federal law. To learn more about the 1996 MPHA act, click here.

Since 2002, various bills to expand the existing Mental Health Parity law and to close some of its perceived loopholes have been introduced in Congress. During the 110th Congress, two measures were under active consideration: S. 558, a bipartisan measure crafted with the support of advocacy, business and insurer groups, and H.R. 1424, a more extreme measure pending in the House. The two conflicting bills passed their respective houses, prompting the need for a compromise bill to be introduced.

NAHU's Position

NAHU supported S. 558 because it took into consideration the impact that the legislation could have on the cost of group health insurance and the ability of employers to continue to provide coverage for their employees, as well as existing state laws that address mental health parity. Under H.R. 1424, existing stronger state parity laws would be permitted to trump the federal requirements for fully-insured health plans, creating an inconsistent pattern of requirements across the states.

Another flawed aspect of the House bill was that it specified that if a group health plan offers any mental health benefits, then it must cover all conditions listed in the DSM-IV manual, the privately-produced guide used by mental health professionals to diagnose all mental health conditions. Conditions listed in the DSM-IV include items like caffeine addiction and jet lag. The Senate bill on the other hand, allowed for employers and health plans to choose which mental illnesses to cover.

Additionally, the House bill mandated that if a group health plan provides out-of-network benefits for medical and surgical benefits then it must provide out-of-network benefits for mental health benefits. This requirement is not included in the Senate bill and is significantly more stringent than the requirements that apply under numerous state parity laws and the parity requirements for health plans offered to federal employees, including Members of Congress.

For these reasons, NAHU strongly supported Senate Bill 558.

Legislative Action

2008

• On March 5, 2008, the House passed HR 1424 with a 268-148 vote, making an overriding veto difficult. After its passage, the White House issued a statement that denounced the House legislation.
• Earlier in the session, the Senate unanimously passed S. 558 and was sent to the House. The Bill was given to the House Education and Labor Committee, and passed on to the subcommittee on Health, Employment, Labor, and Pensions.
• On September 23, 2008, the compromise bill, HR 6983, the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 was passed by both Houses. The House passed the bill with a 376 to 47 vote, and the Senate passed the bill with a 93 to 2 vote. While the bill was passed by both Houses, the two chambers passed the bill with different pay fors. The House passed the bill as a free-standing bill, while the Senate passed the measure as part of a tax bill designed to promote the use of alternative fuels.
• HR 6983, was once again brought before the Senate on October 1st as the Emergency Economic Stabilization Act. The bill combined the revised economic rescue package along with the tax extender, disaster relief, Alternative Minimum Tax Patch, and the parity bill passed by the Senate on September 23rd. The bill was once again passed in the Senate, this time with a 74 to 25 vote, and was sent back to the House. The House also passed the bill with a 263 to 171 vote on October 3rd, the Bill was then signed into law by President Bush.

New Mental Health Parity Law

H.R. 1424-as passed into law on October 3, 2008

• The new federal parity law expands on the already existing MHPA of 1996, which had only required parity on annual and lifetime cost limits. Group health plans are now required to cover treatment of mental illnesses under the same terms and conditions that they cover all other illnesses, with two new areas of parity:
• Bans arbitrary numerical limits on coverage that does not also apply to medical and surgical coverage.
• Requires parity with financial limits, therefore prohibiting higher cost-sharing, deductibles, and out-of-pocket limits for mental illness than those applied to medical and surgical coverage.
• The new Parity law will go into effect one year after its enactment, October 3, 2009.
• Just like the 1996 MHPA, still states that the definition of mental illness and substance abuse is defined by the plan, in accordance with State and Federal law. States are still able to enforce any parity requirement deemed stronger than the federal law, and the new law still leaves all state mandates to cover mental illness in place.

The Competeing House and Senate Bills from the 110th Session of Congress

• Amend the Employee Retirement Income Security Act (ERISA) and the Public Health Service Act to require a group health plan that provides both medical and surgical benefits and mental health benefits to ensure that the loopholes in the 1996 Act are closed.
• Mental health benefits' financial requirements are no more restrictive than those of medical and surgical benefits covered by the plan, including deductibles and copayments.
• Treatment limitations, including frequency of treatments or similar limits on the scope or duration of treatment, are no more restrictive than those applied to medical and surgical benefits covered by the plan. Separate cost sharing requirements applicable only to mental health benefits are prohibited.
• An employer with 50 employees or less and those whose costs of compliance increase the total costs of coverage by more than a specified percentage.
• Group health plan ombudsman must be designated by the Secretaries of both the Department of Labor and Department of Health and Human Services. Random audits of group health plans to ensure compliance with this Act are required by the Secretaries.
• The Comptroller General is required to study the effect of this Act on the cost of health insurance coverage, access to such coverage, the quality of health care, and the impact on benefits and coverage for mental health and substance use disorders.

• Out-of-network language: The House bill requires that if out of net services are provided for medical services, then such benefits have to be offered for mental health. One major concern is that mental health providers outside the network have not had a good track record in accepting in-network rates and conditions for participation. There are also not enough providers, particularly pediatric providers.
• Mandating that employers offering mental health benefits cover all conditions listed in the Diagnostic and Statistical Manual of Mental Disorders Manual (DSM-IV). The DSM-IV is a teaching tool developed by the American Psychological Association designed to categorize both disease and character disorders spanning a wide range of conditions. This expansive manual was never intended to become the basis for reimbursement. Its legality may be challenged if it becomes law since the government can not make payments for services based on the work of a non-governmental body. If this were the allowed, then other specialty groups would be incentivized to develop their manuals under which they would demand the govern base their reimbursements.
• Preemption Language: HR 1424 would allow for inconsistent requirements across the states, and would also allow state laws to undercut medical management practices.

Resources

NAHU's Mental Health Parity Issue Summary

NAHU's Press Release on Mental Health Parity

NAHU's Op-Ed Piece on Mental Health Parity

NAHU's Letter to Congressman Kennedy in support of S. 558

Comparison of Senate Bill 558 and House Bill 1424, courtesy of the National Retail Federation

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