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Mental Health - Equitable Treatment

November 17, 2001
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Mental Health -- Equitable Treatment Act (S. 543)/Mental Health and SubstanceAbuse Parity Amendments (H.R. 162)

Summary
The mental health parity law enacted in 1996 expired on September 30, 2001,and proposals were introduced in the House and Senate to either extend or expandthe 1996 law. The 1996 law prohibited health plans from imposing annual orlifetime dollar limits on mental health benefits that are more restrictive thanfor medical/surgical coverage.

The law exempted employers with 50 or fewer employees, exempted an employerfrom the law if it could show that costs would increase by more than 1 percent,and excluded substance abuse and chemical dependency from the parityrequirement. Earlier in 2001, Senators Domenici (R-NM) and Wellstone (D-MN), theco-sponsors of the 1996 law, introduced a bill that would prohibit not onlydollar limits but also inpatient day and outpatient visit limits that are morerestrictive than for medical/surgical coverage. It would eliminate the 1 percentcost exemption, and make the provisions permanent. The provisions would beeffective for plan years beginning on or after January 1, 2003. On the Houseside, Rep. Roukema (R-NJ) introduced a bill that is similar to the Senate bill,except that it would also require parity for substance abuse and chemicaldependency.

Status
The Senate bill passed November 6, 2001. Previously, the House voted toextend the 1996 law for two years until September 30, 2003.

Then it was up to a House/Senate conference committee to work out a finalcompromise bill. It did end up passing a bill, which was signed by thePresident, which extended the 1996 mental health parity law for 15 months untilDecember 31, 2002. The final bill did not require group health plans to providefull parity between mental health coverage and medical/surgical benefits(similar to S.543). Sen. Domenici said that he will urge Congress to act on thisissue in 2002.

Sen. Pete Domenici and President Bush restarted negotiations on expanding mental health parity in March 2002. Also, the House Education and Workforce Subcommittee on Employer-Employee Relations held a hearing on mental health parity in March.

Impact
Some employer groups argue that expanding mental health parity will increasethe cost of sponsoring health benefits and could result in some employersdropping mental health coverage.

Learn More

View thisbill; enter the bill number; for example "HR 162" under"Search by bill number."

Link to press releases from bill sponsors:

SOURCE: Hewitt Associates LLC

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