MENTAL HEALTH PARITY LAW − NEW DETAILS

The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, included in the economic bailout bill that President Bush signed into law Oct. 3, is expected to bring improved mental health insurance benefits to about one in three Americans. The result of a passionate 12-year battle by mental health advocates, including families and friends of people with addiction disorders and mental illness, the law requires health insurance plans that offer mental health coverage to provide it at the same coverage level as medical and surgical services.

This was first reported in the October 2008 MGH Community News. See full article for additional details.

• The law includes self-funded plans regulated under the federal Employee Retirement Income Security Act that are not subject to state mental health parity laws.
• Existing stronger state parity laws will be permitted to trump the federal requirements. However, only a handful of states — including Connecticut, Maryland, Minnesota, Oregon and Vermont — have comprehensive parity laws that apply to all mental health and substance abuse disorders under private insurance plans, with no exemptions. ( Learn about Massachusetts' law).
• Deductibles, co-pays, co-insurance, out-of-pocket expenses, visit and day limitations, and in-network and out-of-network benefits must be offered on the same footing for mental health and substance use conditions as for other covered conditions.
• The law does not apply to companies that employ 50 or fewer workers, and employers who provide mental health and substance use coverage will not have to comply with the parity standard if their costs go up by more than 2 percent in the first year or rise by 1 percent in succeeding years.
• The law requires disclosure of the criteria for medical necessity determinations (and reasons for denials of coverage) regarding mental health or substance-use disorder benefits.

Effective Date 
The Act will apply to plans beginning in the first plan coverage year that begins one year after the date of enactment. For most plans, this will mean the effective date begins on January 1, 2010. Plans maintained under collective bargaining agreements ratified before the enactment date are not subject to the Act until they terminate (or until January 1, 2009, if this is a later date). (Paragraph added 4/09.)

Critics of the law worry that it will cause some employers to forgo mental health and substance use coverage rather than be required to provide it on equal footing with medical and surgical coverage. Such a scenario is unlikely to occur, said Ron Manderscheid, PhD, director of mental health and substance use programs for the Constella Group in Rockville, Md. “Any smart corporate manager will not want to drop (mental) health insurance, because he or she recognizes that if you have poor mental health in the workplace, the work force is not functioning at its full potential,” Manderscheid said.

That the law makes no requirement regarding what conditions must be covered is also a concern, Ken Libertoff, PhD, director of the Vermont Association for Mental Health, told The Nation's Health. Future legislation may be required if it becomes clear that employers are refusing to provide mental health coverage or sharply limiting the range of conditions covered, policy experts said.

For more information on the new mental health parity law, visit www.mentalhealthamerica.net.

Fact sheet: http://takeaction.mentalhealthamerica.net/site/PageServer?pagename=Equity_Campaign_detailed_summary.

-Adapted from “Mental Health Advocates Laud New Federal Parity Law: Equal Coverage for Mental Health Care” by Teddi Dineley Johnson, Nations Health.  2008;38(10) ©2008 American Public Health Association . Posted 02/11/2009at http://www.medscape.com/viewarticle/587571, retrieved 2/24/09 and Mental Health America website and fact sheet: http://takeaction.mentalhealthamerica.net/site/PageServer?pagename=Equity_Campaign_detailed_summary.

2/09