Federal Mental Health Parity Information



How the Texas Mental Health Parity Law Works





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Texas Mental Health Parity Law Basics


Two mental health laws affect people in Texas; a state mental health parity alw, and the Federal Mental Health Parity Act of 1996. The federal law affects everyone but people who work for small employers but is very weak. The Texas state parity law is a strong law but misses large groups of employed people in Texas because of big-time interference from a problematic and troubled federal law - which noone anywhere has come up with any way for most state insurance regulations to get around.

I'm preparing this pamphlet after I have spent a month I didn't have looking for clear explanations or information about the mental health parity law in Texas and any problems with compliance and with companies finding ways around it, because I found the information unavailable in any obvious place where an average consumer can readily find it. Further, I got reports of about five other people looking for the same information from some of the same sources within a week of when I did. There is a serious need for this information.

In my search for information among other things I've asked all of the fellow mental health consumers and family members thereof at such support organizations as DMDA and NAMI - and found these most well-informed of the population of mental health consumers have little or no knowledge about the state parity law. They were able to do exactly what all but a single one highly and slightly obscurely placed and hard to get in touch with person in mental health advocacy in this city told me; the state mental health parity law is very weak and it doesn't do anything.

One clue to how people come to be so ignorant is to be inferred from consistent confusion between the state and federal mental health parity laws, by consumers and advocates alike. The majority of the people I talked to cited their own poor mental health coverage as examples of how weak the state law is, and one thing I heard alot of went like, "My insurance only covers 20 outpatient visits a year because most insurance companies simply exchanged caps on visits for caps on dollars". Jay Leno is going to substitute this for one if his man on the street American history quizzes. The state parity law requires a minimum of SIXTY visits, with no way to get around that. Most health insurers and HMO's who are subject only to the federal law did re-write their policies to substitute caps on numbers of days or visits covered for dollar amounts, because, unlike the much stronger Texas law, the federal law contains as its ONLY provision a prohibition against different caps on dollar amounts than for other health conditions. Further, most of these provide coverage for 20 outpatient visits a year and 30 days of inpatient treatment maximum.

The fact that I couldn't find it in a month of hard looking means there has been massive failure to educate the public about this law. But it is also the case that these two laws passed and took effect at about the same time. There was massive discussion of the for most practical purposes useless federal law, in both the media and by mental health organizations, along with efforts to educate people of the specific provisions of the federal law. It would appear that the Texas people I've talked with learned the provisions and the weaknesses of the federal law thoroughly and well. It may be that any attempt to inform or educate the public about the state law that occurred when it passed may have been lost in the publicity about the federal law.

Consumers need to be better informed than this in order to be able to protect their rights and to get proper health coverage and to access mental health care.

Below are the provisions, strengths and weaknesses of both the state and the federal law. The texts of both laws are at the end of this pamphlet - and one should READ them. But the parity laws are also only one of several problems with their health care coverage that consumers need to be totally educated about in order to either know why the mental health parity law doesn't appear to do what it should, and to know how to actually get oneself a good health insurance policy, and access care when one needs it. Insurance companies have a variety of ways they often avoid coverage that your contract states that you have. Insurance companies delaying and wrongly refusing claims to see if you're going to pursue it is a major problem - and also a practice that is illegal under Texas state law, and with which one can get help from the Texas Department of Insurance's consumer hotlines and ocmplaint lines. But a much larger problem is that many companies and many HMO's have gone to using managed behavioral health care to provide mental health benefits. Many such plans provide full mental health parity on paper; this is particularly true of large employers who self-fund their employee health benefit programs. Some of these programs provide mental health parity in actuality. But people often find that they simply can't actually get the level of benefits and care that the policy says they have.

In order to get care, people need to understand the problems they face getting the coverage that their policy says they have and the care the policy says they're entitled to, and what their legal rights are in this regard, as badly as they need to understand where and how to get parity in their coverage in the first place. This is why I have a section that briefly discusses this subject.

Finally, people need to know where to go with questions and complaints about their insurance coverage. I provide some places, names and phone numbers of people and agencies who one can actually get help from.

Provisions of the Federal Mental Health Parity Law of 1996


The Federal mental health parity law includes a single provision, and several pages specifying what the loopholes are and what it does NOT do. As it passed, this law was valued by its sponsor and by advocates alike mostly as a foot in the door. It made few positive real changes in mental health policies. It did variously shock and scare a few companies into taking a closer look at providing mental health benefits - and as one can see below, those that responded positively went to providing managed behavioral care, both for better, and for worse. Not a small number of insurance plans actually shrank their mental health benefits in rewriting their policies in the common ways policies were re-written to get around this law. For instance, my own Community Blue of Western New York contract changed caps on dollar amounts to low caps on numbers of visits, more of which may have been covered before, and then shored up its bets by excluding "chronic mental illness" from any coverage at all.

The provisions of the Texas state mental health parity law

The Texas state mental health parity law was passed in several installments; 1991, 1997, and 1999. Not all sources are up to date about the 1999 amendment, which is called a "cleanup bill" and in addition to making the same definitions apply to both laws, which expanded protection for public employees, the bill added an important provision and substantially strengthened the law.

The 1991 law mostly affected public employees. It also required insurance companies to make mental health parity optionally available to companies in the private sector who requested it, which at the 1997 hearings it became apparent that the insurance companies largely laughed at. I think, though, that some extremely inaccurate information I got at Advocacy Inc is based on that provision.

The 1991 mental health parity law applied to all public, state and local employees, and all teachers and university system employees, and requires simply "full parity" for a list of conditions that was expanded in 1999 to be the same list of conditions that apply to the 1997 law. To me, "full parity" looks way too vague, but remarkable as it seems, as far as anyone knows and as far as was reported at the 1997 hearings, the relevant public entities are complying fully. The list of conditions covered includes schizophrenia, paranoia, other psychotic disorders, bipolar disorder (including cyclothymia, bipolar II, all of it), pervasive developmental disorder, obsessive compulsive disorder, major depression, and schizoaffective disorder, and depression in childhood and adolescence.

The 1997 mental health parity law was written to include all private sector health plans except for employers who employ fewer than 50 people. It requires that the policies provide care based on medical necessity, for schizophrenia, paranoia, other psychotic disorders, bipolar disorder, major depressive disorder, schizoaffective disorder, pervasive developmental disorder, obsessive-compulsive disorder, and depression in childhood and adolescence. Policies have to specifically cover a minimum of 60 outpatient visits and 45 outpatient visits annually. NOTE THE DIFFERENCE BETWEEN THIS AND 30 days and 20 OUTPATIENT DAYS ANNUALLY. The 1999 amendment same amount requires the same limits, deductibles, copayments, and coinsurance factors for serious mental illness as for physical illness.

One weakness of the law is that it didn't cover mild and moderate depression, which lends itself to the "not sick enough" refusal. The legislature was anxious to avoid covering Woody Allen Syndrome. When mild and moderate depression are real, though, they are disruptive and they substantially lower quality of life.

The law was intended to cover most employed people and their families in Texas except for small businesses. The major problem the law is running into is that a great many employers can claim exemption from much or all state regulation under the federal ERISA.

ERISA is the Employees Retirement and Income Security Act of 1974. It and its case law take up two volumes of the federal law code. It was intended to assist large employers who do business across state lines to avoid having to deal with differing state regulation, and also to fix a problem with corruption in employee benefit plans that existed at the time. It has become extremely popular for employers to self-fund their employee health coverage and other benefits because they save alot of money in taxes and avoiding state insurance regulations. They also are successfully, under the federal courts, claiming exemption from most or all state level health insurance reform mandates. ERISA is extremely complex and in fact the federal courts themselves as well as many people in health care advocacy and the media are very confused about what the ERISA preemption means and who it applies to. ERISA preemption can apply different ways to different categories of people and employers in different contexts.

ERISA exempts those employers in Texas from the Texas state mental health law who self-fund their employee benefit plans in whole or in part, and, as I understand it and I could misunderstand it, all of those multi-employer health plans that are arranged or negotiated by unions as part of collective bargaining. ERISA does NOT exempt all employers in Texas who have branches in more than one state; that is a common misconception that seems to stem from interpretations of the law's intent.

The courts have built in caveats and exceptions to this interpretation of ERISA preemption, and the concepts continue to evolve as the courts deal with lawsuits and legal challenges. The most important concept to come from the courts works out in practical effect to the courts have tended to find that ERISA preempts things that have to do with insurance administration, such as decisions about what is covered by the plan and whether a particular expense is covered, but ERISA does not preempt issues that pertain to the business of insurance, which includes medical care. Another practical effect of this is that the courts have ruled that regular group health plans that the employer only takes employee deductions for are not ERISA plans and are not preempted by ERISA. The reasons for this are complex and I don't yet fully understand them. But it is important to understand them for two reasons; they enable one to know which health policy one should be covered by, and they affect how one would proceed if denied care by a managed care organization.

The provision of the Federal mental health parity law

The Federal mental health parity law contains one provision. It forbids health plans that provide any sort of mental health coverage from imposing different lifetime and annual dollar caps than for other health conditions.

The loopholes of the Federal mental health law

1. The employer can still limit number of days of hospital care and number of visits for outpatient care (even if no such limits or different limits apply to care for other conditions). The employer can also still cover mental health care at a different co-pay or percentage than other conditions. My insurance requires a $10 copay for most specialist visits, out of plan a 20% copay plus $250 deductable - and both in plan and out of plan a 50% copay for mental health coverage. Coverage is limited to 30 days of hospital care and 20 outpatient visits per year, both in plan and out of plan! In fact, most health insurance policies and HMO's simply changed dollar maximums to maximum numbers of inpatient days and outpatient visits, usually 30 and 20, to conform to this law.

2. If the employer didn't previously provide any mental health coverage, he need not do so now.

3. The law doesn't state what kind of mental health coverage must be covered. It provides for "mental health services" "as each plan defines it". The idea of max caps is to encourage employers to cover serious chronic mental illness. As you can see in my contract, my Community Blue Advantage specifically exempts "chronic mental illness", no definition of what they mean provided. All serious mental illnesses are chronic! Similarly, the employer does not have to provide medical care for mental illness at all, or even care by a licensed psychologist. Many employers offer simply "Employee Assistance Programs", which provide short term counselling for employees encountering some difficult or stressful situation that could affect their job performance.

4. If the employer can show that conforming to this law will raise his premiums by more than 1%, he is exempt from it. The law itself is not specific on how employers making such claims are to be held accountable. But federal regulations (see PWBA page for a copy) state that companies claiming this exemption must develop and apply some formula and submit their intentions and atleast a summary of what they are basing their claim on to the relevant state and federal agency and to their employees; this to be public information which NAMI and consumers can access. It is not clear who it is up to to challenge a company's claim to exemption.

5. Companies that employ fewer than 50 people are exempt from the law.

Other problems of mental health coverage


Because my purpose is to become aware of and educate people about how to get good mental health coverage in their insurance policy, it is important to provide information on the other legal and public policy issues that are as important as having parity on paper in having actual mental health coverage. As critically basic as formal parity is, there is alot more to the picture of how insurers and HMO's deny care and coverage for mental illness than the coverage they provide on paper. What is more, an explanation of how getting good mental health coverage in Texas has to provide a complete explanation of how and when the law doesn't effectively provide parity. People know they aren't actually in effect getting good coverage, and they are extremely vague and confused as to why that is and how things are supposed to work. Providing an incomplete discussion of how mental health coverage is working only leaves people feeling vague and confused and with the same vague perception that the parity law is weak and doesn't work that they already have. So consumers need a clear explanation of the entire situation, and of what they can do on several levels to get access to and coverage of care.

Insurance companies are for one thing falling back on such time honored strategies as denying claims and telling you to go to court knowing you probably don't have the resources to do go any part of that route, avoiding providing clear answers to questions about what your benefits are, and delaying the processing and payment of claims. I've run into this, not strictly with mental health, and a good half dozen people at the last Austin NAMI meeting were looking for where to go with serious health insurance problems of exactly that nature. These are very common problems. Texas has state laws, which are as unusual as the fact that Texas has a mental health parity law, that, for instance, require insurance companies and HMO's to pay in a timely manner and give the consumer routes to pursue if that doesn't happen. I do not know whether ERISA preempts these laws for employer self-funded and multi-employer, union negotiated group health plans. I also don't know if these procedural laws apply to individual health policies and HMO contracts (policies you buy for yourself rather than through a group). One can get information on these laws by calling the Texas Department of Insurance's hotlines, which is how I first learned about them. Also, practically everything except the mental health parity law is covered by the department's educational pamphlets - most of which have been published or updated since the mental health parity law was passed. Also, those pamphlets are available in the front lobby of the huge TDI office building, which is one of those big buildings between 3rd and 11th streets and several blocks to the west of Congress Street, and can be located more precisely by calling TDI (see my advocacy resources page).

Most importantly, though, many companies, especially very large ones, and including companies that are exempted from the Texas state law by ERISA, have decided that they will sooner or later be affected by mental health parity, and found what they think are newer and better ways to meet their assorted goals by providing employee health coverage, whether their primary goal is to provide health care on an as-needed basis, or to avoid paying for care. Many employers and most HMO's have gone to behavioral managed care as their means of providing mental health benefits. Some of these employers and companies responsibly provide good access to care.

But many of these companies simply employ managed care strategies to deny approval for care. They claim that care isn't medically necessary, or that it doesn't conform to rigid models of what is the best way to treat the person's problem, or even of how the illness itself is supposed to act. For instance, according to many behavioral managed care programs' models and protocols for treating major depression, it takes two to seven days to stabilize this condition and eight to ten weeks to recover from it completely. Behavioral care companies have various strategies that they believe will help contain their costs. Some put everyone on medication, no matter what is the nature of their problem, on the theory that medication is cheaper than long-term psychotherapy. Many forms of chronic mental illness are best managed this way. Since I've had psychotherapy and stress management training, I only need my manic depression medically treated. But if someone's illness is actually exacerbated by an emotional problem or stress, then medication alone is not the best way to help them recover.

But managed behavioral care companies stand to save the most money by finding ways to avoid correctly diagnosing or acknowledging how severely ill are people with serious and chronic mental illness. Lifetime medication for these people costs big bucks, and when they need to be hospitalized, the costs skyrocket. The entire history and structure of the mental health field lends itself to failing to find people with mental illness either medically ill or very seriously ill. To access care through a behavioral health management company, usually the patient and not even his doctor who wants him seen by a psychiatrist, has to call the company, and convince the gatekeeper who answers the phone that he needs care. This gatekeeper usually has a BA or MA in psychology, counselling or social work; sometimes it is a nurse. This person's job is to decide what is wrong with the patient and where best to send him for care or evaluation. Most of these programs try to initially direct people into counselling. I am far luckier than the average person who only knows he feels miserable, and has a variety of symptoms and trouble functioning. My primary care physician and a county clinic psychiatrist where I last lived gave me a diagnosis of at taht time depression suspected bipolar disorder. Based on this, a gatekeeper at IBM's managed behavioral care hotline, which is according to just about everyone in this city in the field just about top of the line in providing mental health care for employees, told me that they would try to get me to go to counselling because those people have the best means to do complete evaluations, but if I insisted I would be allowed to see a psychiatrist. I checked because IBM had testified before Congress several years ago that they send everyone to 12 (now it's 8) weeks of employee assistance counselling and then send them "on" if they fail to improve!

Moreover, my own inclination, based on my personal experience with psychotherapists, the cumulative experience of people on my manic depression lists on the web, the history of mental health, and the history of psychology and psychiatric social work as professions, is to think that if I'm dealing with psychologists and social workers to get medical care for a medical problem, I'm already in trouble. I have overwhelmingly found these people not oriented toward thinking someone has a biological brain disease. I once had housemates who were working on Ph.D.'s in clinical psychology; they often came home very aggravated over the latest psychiatrist who had not done things their way. They had forced the psychiatrists at the local hospital where they were doing clinical training, to base their diagnoses partly on the results of ink blot and standard personality tests, and if the doctor didn't do it, he got confronted. "This man has schizophrenia? How can you not have done a Rorscarch on him?!!" I've repeatedly seen people distraught on my manic depression lists on the web because their medicaid case managers had refused to approve their continued medical care for their manic depression or given them a hard time about it because they needed to get off of medication and deal with their issues. I get continual arguments from NAMI members that severely and chronically ill people need social work supportive services - but it is strange I should hear that when it doesn't apply to most mentally ill people - and certainly not to ones who are employed and seeking treatment.

Overall, people report extensive problems with getting mental health care from managed care organizations. People who are psychotic or suicidal are often restricted to 48 hours to a week in a hospital on the grounds that further hospitalization isn't medically necessary and they can more cost-effectively or "appropriately" be treated a different way. If people who need psychotherapy are often given only medication, people who need medication are often channeled into counselling instead. People getting told they one way or another aren't "sick enough" for care is a very common problem, and Texas' law's failure to include minor and moderate unipolar depression among the conditions covered by the law lends itself to that. I've heard that I'm "not sick enough" for most of my life - and one thing about undiagnosed bipolar disorder, one can pretty much be counted on to eventually get sicker.

The woods are full of horror stories about suicidal people turned out of the hospital, a man with schizophrenia probably on medicaid managed care who was recently executed after hospitals kept turning him away and his voices told him to kill someone, suicidal and delinquent teens with major depression that not even an Independent Review board of doctors could be convinced they belonged on a hospital, teenagers with major depression overwhelmed by serious family problems and overwork, restricted to ten weeks of care.

National NAMI people - atleast the ones working on parity issues - have praised behavioral managed care to the heights to me, on strictly political grounds, because it is only because of behavioral managed care that so many employers have agreed to put parity clauses in their health policies. In NAMI, as in Congress and elsewhere, as nearly as I can tell, the closely related issues of parity and managed care have been artifially separated from each other by virtue of different people are working on them. But NAMI people are not telling me at all consistent things about managed care. On the one hand, employers want their employees who need mental health care to get it because that saves the company money, and for this reason they are providing good care. On the other, the health insurance providers and HMO's often postpone and denying care in the hope that the person will simply disappear from the company payroll onto disability! I don't think that employers aren't enforcing their actual wishes in the matter.

If employers and health insurers want their employees to get treated, the last place where I worked must not have been among the enlightened ones, and neither must the ones all the people at the local Austin NAMI chapter keep reporting having so many problems with be. In fact, an aide in Senator Wellstone's office told me taht what his office hears exactly confirms my suspicions on the matter.

The empirical data that is beginning to come in confirm serious problems exist, too. I have studies I just got and haven't yet had time to read, that have such findings as that fewer people have access to mental health care and that less money and smaller proportions of health insurers' dollars are being spent on mental health care in these plans, though certainly the incidence of mental illness has not declined.

A recent study by the Texas Physicians' Foundation, which is one of the two organizations in charge of Texas' Independent Review system, analyzed 653 complaints they got in parts of 1987 and 1988, and found that fully 25% of them pertained to behavioral managed care, which is way disproportionate. The Texas Society of Psychiatric Physicians said that that confirms what their members are seeing with people unable to get care approved. Further, the head of that organization says that his experience confirms that some plans are very good and others provide poor access to care. He says one HMO he can think of the boards don't often reverse that company's decisions, and others the boards reverse their decisions most of the time.

Key aspects of this problem, which extends beyond mental illness, can be solved by legislative action. Congress is working on major legislation that would for instance mandate a legal definition of medical necessity, and possibly allow people to sue HMO plans that are subject to ERISA for more than approval of the care they are seeking or payment of their bills and possibly attorney's fees. One of the most important elements of the problem is that HMO's who deny needed care suffer no penalty if someone gets hurt even if they clearly acted negligently or in bad faith. There is no criminal penalty, and no punitive damages or damages for pain and suffering. If a company does not happen to want to behave ethically, they have no reason to provide care, and every reason to let the patient take it to court. By the time these cases get to court, the patient is usually much sicker or dead. Usually of course people lack the resources to go to court. Employees of HMO's and insurance companies have been outright blowing the whistle that they are being required to handle people with ERISA plans different from people with non-ERISA plans; they are supposed to process the non-ERISA claims promptly and delay, deny and obstruct the ERISA claims. One group of employees even produced a training video to prove it! This is all very scandalous - but not subject to any sort of criminal action to my knowledge.

The Congressional legislation is currently in a joint conference committee which began work on it several weeks ago, because the House and Senate passed very different bills. One house passed a bill that contains the right to sue for punitive and pain and suffering damages, and the other doesn't. BEcause the bills face sharp opposition, lobbying from educated consumers who think that things they know and do can make a difference in their health care, is greatly needed.

Texas has a set of laws in place to correct or address some of tehse problems. It is illegal for insurance companies to delay or unreasonably deny claims, and people it happens to have redress through the Insurance Department. I don't know if that applies to ERISA plans; more than likely not, since if it relates to processing and payment of claims it relates to the administration of the plan. Texas recently passed a HMO liability bill, which made HMO's in Texas, including ERISA plans, liable for medical decisionmaking that results in patient harm, and also set up an Independent Review system. The Independent Review system provides a practical and effective route for patients to pursue if they are denied needed care. Depending on the level of urgency, a the entire process takes anywhere from several days to a month. Consumers complain to TDI, and the cases are sent to independent physicians for their review. Very importantly, as it seems taht half the time doctors on these boards agree with, for instance, the notion that a teenager who is suicidal and delinquent and has major depression doesn't belong in the hospital, consumers don't lose their rights to go to court by going to Independent Review - atleast not according to the person who told me about it. I think it is worth checking. The state might also want to include birth on this planet among criteria for getting a license to practice medicine... The liability provision specifically targeted the medical care provided by HMO's and not decisions about what is and is not covered by the plan, ie, failure to provide services that the contract says are covered - because the courts are finding that the "business of insurance", which medical care relates to, is not preempted by ERISA, and administrative aspects of plan management such as determinations about what is covered and what is in the policy, are.

Of course, Texas HMO's quickly took the state to court, and challenged the law as preempted by ERISA. Very importantly, I don't know if any provisions of this law that are found to be preempted by ERISA are thrown out entirely, or simply exempt ERISA plans from the law. Usually at issue in these lawsuits is whether a particular patient's coverage issue is preempted by ERISA; in this case the lawsuit was brought against the state by an HMO as a challenge to the law itself. This is a similar sort of confusion to that which surrounds when people actually have mental health parity in this state. There is simply massive confusion everywhere about what ERISA means, and what it actually does mean varies greatly from one context to another. I've downloaded a bunch of articles about what the preemption means but not had time to analyze them, and I think it would pose a challenge even to my cousin who got a perfect score on his SAT. My IQ is only 142 - and USUALLY up to this sort of thing. So far, a local federal district court upheld the liability portion of the law, and "threw out" the entire independent review mechanism - whatever "threw out" means actually happens to that portion of the law. Both sides promptly filed for stays on the decision taking effect, which means that for now, Independent Review lives, and both sides are currently preparing for appeal and the case is expected to go to the Supreme Court.

One way to help avoid having this sort of problems with a policy is to check its record of complaints and its "report card" with TDI. TDI maintains, separately, for both HMO's and indemnity health insurance companies, records of how many complaints in general (not specific) they get for that company. You can get that and similar very basic information about the company by calling TDI, by picking up an out of date pamphlet with a list of such information, or on line at the TDI web site, where alot of that info is on the site and they hope to have all of it up shortly. You can also get a "report card" for each company from the Office of Insurance Counsel, also at TDI. These places and phone numbers are on my advocacy page, at http://www.oocities.com/HotSprings/Oasis/2065/Legislation/advocacy.html. While I wouldn't ask about mental health coverage at a job interview, and noone could gainsay that, the current Austin job market supports a strategy of asking what benefits are offered and who the companies are, and checking on them. Another strategy someone suggested to me that I've found somewhat helpful is to call area mental health providers, some of the larger ones, and talk to their utilization review, case workers, nursing staff, billing people, and ask who has teh best and the worst records of approving and paying for care.

Places and Phone Numbers for Help with Insurance Problems


Apparently the Texas Department of Insurance is very helpful with both information and in handling consumer complaints. They have several hotlines for people to call in with questions and complaints. They also have an extensive web site at http://www.tdi.tx.st.us.

HMO Complaint Line 512-305-6745.

consumer complaints 1-800-578-4677

consumer hotline 512-463-6515. Office of Public Insurance Counsel 322-4145, for report cards for insurance companies and HMO's.


Kim McPherson at the Mental Health Association, 454-3706, kim@mhatexas.org. She is extremely well informed and extremely helpful. She is hard to find. One has to leave one's phone number. Also, the staff at Mental Health Association don't generally have an exactly helpful attitude.


Two organizations NOT to go for information or assistance with an insurance problem, unless it is Medicaid Managed Care: Advocacy Inc and Texas Mental Health Consumers. They like to appear helpful and confusingly, a number of people at Advocacy Inc were among the central people who worked for the 1997 parity bill; they either don't tell you up front that they don't know a thing about health insurance and that includes parity, or they say so in a way that is impossible to believe. Actually, the people at Advocacy Inc that worked on parity did so in another life or as a side interest. Both organizations focus exclusively on the problems of people who are severely disabled and people who are in institutions. Advocacy Inc apparently has a standing pattern of sending people in circles from one supposed "expert you want to talk to" to another. At both places, I had people tell me things about their knowledge of the state parity law that were vague, scary, and untrue - such as that Travis County doesn't provide parity for its workers, and that insurance companies have to make mental health coverage available to employees as an extra if they want to pay more for it but the employer doesn't have to provide it!

TEXAMI is logically a very good place to go for information and help; people are often referred there, and at one time it was a very good place to get information. It depended on a core group of people who were extremely knowlegdeable and still are; if one wants to make long distance phone calls. They variously moved into national NAMI in Washington DC, and left town. Things may change when one of them returns to town in June, let's hope. But their current director strongly appears to have no knowledge of parity at all. She convinced me she doesn't. I don't know if she has knowledge about other mental health insurance issues.

Texas Mental Health Parity Law


Definitions Sec. 1. For purposes of this article: (1) "Serious mental illness" means the following psychiatric illnesses as defined by the American Psychiatric Association in the Diagnostic and Statistical Manual (DSM): (A) schizophrenia; (B) paranoid and other psychotic disorders (C) bipolar disorders (hypomanic, manic, depressive, and mixed); (D) major depressive disorders (single episode or recurrent); (E) schizo-affective disorders (bipolar or depressive); (F) pervasive developmental disorders (G) obsessive-compulsive disorders (H) depression in childhood and adolescence (2) "Group health benefit plan" means a plan described by Section 2 of this article. (3) "Small Employer" has the meaning assigned by Article 26.02 of this code. Scope of article Sec. 2. (a) This article applies only to a group health benefit that provides benefits for medical or surgical expenses incurred as a result of a health condition, accident, or sickness, including: (1) a group insurance policy or insurance agreement, a group hospital service contract, or a group evidence of coverage that is offered by: (A) an insurance company; (B) a group hospital service corporation operating under Chapter 20 of this code; (C) a health maintenance organization operating under the Texas Health Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance Code); (D) a fraternal benefit society operating under Chapter 10 of this code; or (E) a stipulated premium insurance company operating under Chapter 22 of this code; and (2) to the extenet permitted by the Employee Retirement Income Security Act of 1974 (29 U.S.C. Section 1002); or (B) another analogous benefit arrangement. (b) This article does not apply to coverage under: (1) a blanket accident and health insurance policy as that term is defined under Section 2, Article 3.51-6 of this code; (2) a short-term travel policy; (3) an accident-only policy; (4) a limited or specified-disease policy, other than a plan that provides benefits for mental health care or similar services; The following two provisions were added in 1999, and I do not understand what they mean. (5) with the exception of Section 1 of this article which shall apply, a plan offered under the Texas Employees Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code) or the Texas State College and University Employees Uniform Insurance Benefits Act (Article 3.50-3, Vernon's Texas Insurance Code); (6) a plan offered under or in accordance with Article 3.51-5A of this code; or (7) a medicare supplement policy, as that term is defined under Section 1(b)(3), Article 3.74, of this code. Required coverage for serious mental illnesses Sec. 3. (a) Except as provided by Section 4 of this article, a group health benefit plan: (1) must provide coverage, based on medical necessity, for the following treatment of serious mental illness in each calendar year: (A) 45 days of inpatient treatment; and (B) 60 visits for outpatient treatment, including group and individual outpatient treatment; (2) may not include a lifetime limit on the number of days of inpatient treatment or the number of outpatient visits covered under the plan; and (3) must include the same amount limits, deductibles, copayments, and coinsurance factors for serious mental illness as for physical illness. (b) An issuer of a group health benefit plan may not count toward the number of outpatient visits required to be covered under Subsection (a)(1) of this section an outpatient visit for the purpose of medication management and must cover that outpatient visit under the same terms and conditions as it covers outpatient visits for treatment of physical illness. (c) An issuer of a group health benefit plan may provide or offer coverage required under this section through a managed care plan. Small employer coverage Sec. 4. An issuer of a group health benefit plan to a small employer must offer the coverage described in Section 3 of this article but is not required to provide the coverage if the small employer rejects the coverage. Certain benefits prohibited Sec. 5. (a) This article may not be interpreted to require a group health benefit plan to provide coverage for treatment of: (1) addiction to a controlled substance or marihuana that is used in violation of law; or (2) mental illness resulting from the use of a controlled substance or marihuana in violation of law. (b) In this section, "controlled substance" and "marihuana" have the meanings assigned by Section 481.002, Health and Safety Code. Article 3/50-2, Vernon's Texas Insurance Code Art. 3.50-2, -3, -4, -5. Texas Employees Uniform Group Inurance Benefits Act, and provisions relating to local governments, school teachers, etc. The 1991 law added nearly identical provisions to each of these sections of law. The 1999 amendment changed the smaller lists of specific disorders meant by mental illness to the definition provided in section 3.14. Sec 3. (a). Unless a different meaning is plainly required by the context, the following words and phrases as used in this Act shall have the following meanings:.... (23) "Serious mental illness" has teh meaning assigned by Section 1, Article 3.51-14, Insurance Code. (c) Sec. 5. (j) The trustee may not contract for or provide a plan of coverage that (2) provides coverage for serious mental illness that is less extensive than the coverage provided for any physical illness. Vernon's law code (1999 pocket part) appears to have this wrong; the chapter sessions law reads that section 16 was redesignated section 19 and then amended; Vernon's includes section 16 unamended and then the new section 19 as amended. (19) Serious mental illness" has teh meaning assigned by Section 1, Article 3.51-14, Insurance Code. Sec. 4. peterinas to Texas STate College and University Employees Uniform Insurance Benefits Program. Sec. 4C. An institution, in contracting for group or health maintenance organzation coverage or in self-insuring its own coverage, may not contract for or provide in that coverage; (2) provides coverage for serious mental illnes that is less extensive than the coverage provided for any other physical illness. 3.51-5A. Local Governments Prohibited From Excluding or Limiting Certain Coverages (a) A municpality, county, school district, district created underARticle III, Section 52, or Article XVI, SEction 59, of the Texas Constitution, or other politcial subdivision of the state that provides group health insurance coverage, health maintenance organization coverage, or self-insured health coverage to its officers or employees or to both its officers and employees may not contract for or provide coverage that: (2) is less extensive for serious mental illness than the coverage provided for any other physical illness. (b) For purposes of this article, "serious mental illness" has the meaning assigned by Sectin 1, Article 3.51-14, of this code.

TEXT OF MENTAL HEALTH PARITY ACT OF 1996

Public law 104-204.

TITLE VII-PARITY IN THE APPLICATION OF CERTAIN LIMITS TO MENTAL HEALTH BENEFITS

Sec. 701. SHORT TITLE.-This title may be cited as the "Mental Health Parity Act of 1996".

Sec. 702. AMMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974.-
(a) IN GENERAL.-Subpart B of part 7 of subtitle B of title I of the Employee Retirement
at the end the following new section:

"SEC. 712. PARITY IN THE APPLICATION OF CERTAIN LIMITS TO MENTAL HEALTH BENEFITS.

"(a) IN GENERAL.-

"(1) AGGREGATE LIFETIME LIMITS.-In the case of a group health plan (or health insurance coverage offered in connection with such a plan) that provides both medical and surgical benefits and mental health benefits-

"(A) NO LIFETIME LIMIT.-If the plan or coverage does not include an aggregate lifetime limit on substantially all medical and surgical benefits, the plan or coverage may not impose any aggregate lifetime limit on mental health benefits.

"(B) LIFETIME LIMIT.-If the plan or coverage includes an aggregate lifetime limit on substantially all medical and surgical (in this paragraph referred to as the 'applicable lifetime limit'), the plan or coverage shall either-

"(i) apply the applicable lifetime limit both to the medical and surgical benefits to which it otherwise would apply and to mental health benefits and not distinguish in the application of such limit between such medical and surgical benefits and mental health benefits; or

"(ii) not include any aggregate lifetime limit on mental health benefits that is less than the applicable lifetime limit.

"(C) RULE IN CASE OF DIFFERENT LIMITS.-In the case of a plan or coverage that is not described in subparagraph (A) or (B) and that includes no or different aggregate lifetime limits on different categories of medical and surgical benefits, the Secretary shall establish rules under which subparagraph (B) is applied to such plan or coverage with respect to mental health benefits by substituting for the applicable lifetime limit an average aggregate lifetime limit that is computed taking into account the weighted average of the aggregate lifetime limits applicable to such categories.

"(2) ANNUAL LIMITS.-In the case of a group health plan (or health insurance coverage offered in connection with such a plan) that provides both medical and surgical benefits and mental health benefits-

"(A) NO ANNUAL LIMIT.-If the plan or coverage does not include an annual limit on substantially all medical and surgical benefits, the plan or coverage may not impose any annual limit on mental health benefits.

"(B) ANNUAL LIMIT.-If the plan or coverage includes an annual limit on substantially all medical and surgical benefits (in this paragraph referred to as the 'applicable annual limit'), the plan or coverage shall either-

"(i) apply the applicable annual limit both to medical and surgical benefits to which it otherwise would apply and to mental health benefits and not distinguish in the application of such limit between such medical and surgical benefits and mental health benefits; or

"(ii) not include any annual limit on mental health benefits that is less than the applicable annual limit.

"(C) RULE IN CASE OF DIFFERENT LIMITS.-In the case of a plan or coverage that is not described in subparagraph (A) or (B) and that includes no or different annual limits on different categories of medical and surgical benefits, the Secretary shall establish rules under which subparagraph (B) is applied to such plan or coverage with respect to mental health benefits by substituting for the applicable annual limit an average annual limit that is computed taking into account the weighted average of the annual limits applicable to such categories.

"(b) CONSTRUCTION.-Nothing in this section shall be construed-

"(1) as requiring a group health plan (or health insurance coverage offered in connection with such a plan) to provide any mental health benefits; or

"(2) in the case of a group health plan (or health insurance coverage offered in connection with such a plan) that provides mental health benefits, as affecting the terms and conditions (including cost sharing, limits on numbers of visits or days of coverage, and requirements relating to medical necessity) relating to the amount, duration, or scope of mental health benefits under the plan or coverage, except as specifically provided in subsection (a) (in regard to parity in the imposition of aggregate lifetime limits and annual limits for mental health benefits).

"(c) EXEMPTIONS.-

"(1) SMALL EMPLOYER EXEMPTION.-

"(A) IN GENERAL.-This section shall not apply to any group health plan (and group health insurance coverage offered in connection with a group health plan) for any plan year of a small employer.

"(B) SMALL EMPLOYER.-For purposes of subparagraph (A), the term 'small employer' means, in connection with a group health plan with respect to a calendar year and a plan year, an employer who employed an average of at least 2 but not more than 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.

"(C) APPLICATION OF CERTAIN RULES IN DETERMINATION OF EMPLOYER SIZE.-For purposes of this paragraph-

"(i) APPLICATION OF AGGREGATION RULE FOR EMPLOYERS.-Rules similar to the rules under subsection (b), (c), (m), and (o) of section 414 of the Internal Revenue Code of 1986 shall apply for purposes of treating persons as a single employer.

"(ii) 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.

"(iii) PREDECESSORS.-Any reference in this paragraph to an employer shall include a reference to any predecessor of such employer.

"(2) INCREASED COST EXEMPTION.-This section shall not apply with respect to a group health plan (or health insurance coverage offered in connection with a group health plan) if the application of this section to such plan (or to such coverage) results in an increase in the cost under the plan (or for such coverage) of at least 1 percent.

"(d) SEPARATE APPLICATION TO EACH OPTION OFFERED.-In the case of a group health plan that offers a participant or beneficiary two or more benefit package options under the plan, the requirements of this section shall be applied separately with respect to each such option.

"(e) DEFINITIONS.-For purposes of this section-

"(1) AGGREGATE LIFETIME LIMIT.-The term 'aggregate lifetime limit' means, with respect to benefits under a group health plan or health insurance coverage, a dollar limitation on the total amount that may be paid with respect to such benefits under the plan or health insurance coverage with respect to an individual or other coverage unit.

"(2) ANNUAL LIMIT.-The term 'annual limit' means, with respect to benefits under a group health plan or health insurance coverage, a dollar limitation on the total amount of benefits that may be paid with respect to such benefits in a 12-month period under the plan or health insurance coverage with respect to an individual or other coverage unit.

"(3) MEDICAL OR SURGICAL BENEFITS.-The term 'medical or surgical benefits' means benefits with respect to medical or surgical services, as defined under the terms of the plan or coverage (as the case may be), but does not include mental health benefits.

"(4) MENTAL HEALTH BENEFITS.-The term 'mental health benefits' means benefits with respect to mental health services, as defined under the terms of the plan or coverage (as the case may be), but does not include benefits with respect to treatment of substance abuse or chemical dependency.

"(f) SUNSET.-This section shall not apply to benefits for services furnished on or after September 30, 2001."

(b) CLERICAL AMENDMENT.-The table of contents in section 1 of such Act, as amended by section 603 of this Act, is amended by inserting after the item relating to section 711 the following new item:

"Sec. 712. Parity in the application of certain limits to mental health benefits."

(c) EFFECTIVE DATE.-The amendments made by this section shall apply with respect to group health plans for plan years beginning on or after January 1, 1988.

SEC. 703. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT RELATING TO THE GROUP MARKET.-(a) IN GENERAL.-Subpart 2 of part A of title XXVII of the Public Health Service Act (as added by section 604(a)) is amended by adding at the end the following new section:

"SEC. 2705. PARITY IN THE APPLICATION OF CERTAIN LIMITS TO MENTAL HEALTH BENEFITS.

"(a) IN GENERAL.-

"(1) AGGREGATE LIFETIME LIMITS.-In the case of a group health plan (or health insurance coverage offered in connection with such a plan) that provides both medical and surgical benefits and mental health benefits-

"(A) NO LIFETIME LIMIT.-If the plan or coverage does not include an aggregate lifetime limit on substantially all medical and surgical benefits, the plan or coveage may not impose any aggregate lifetime limit on mental health benefits.

"(B) LIFETIME LIMIT.-If the plan or coverage includes an aggregate lifetime limit on substantially all medical and surgical (in this paragraph referred to as the 'applicable lifetime limit'), the plan or coverage shall either-

"(i) apply the applicable lifetime limit both to the medical and surgical benefits to which it otherwise would apply and to mental health benefits and not distinguish in the application of such limit between such medical and surgical benefits and mental health benefits; or

"(ii) not include any aggregate lifetime limit on mental health benefits that is less than the applicable lifetime limit.

"(C) RULE IN CASE OF DIFFERENT LIMITS.-In the case of a plan or coverage that is not described in subparagraph (A) or (B) and that includes no or different aggregate lifetime limits on different categories of medical and surgical benefits, the Secretary shall establish rules under which subparagraph (B) is applied to such plan or coverage with respect to mental health benefits by substituting for the applicable lifetime limit an average aggregate lifetime limit that is computed taking into account the weighted average of the aggregate lifetime limits applicable to such categories.

"(2) ANNUAL LIMITS.-In the case of a group health plan (or health insurance coverage offered in connection with such a plan) that provides both medical and surgical benefits and mental health benefits-

"(A) NO ANNUAL LIMIT.-If the plan or coverage does not include an annual limit on substantially all medical and surgical benefits, the plan or coverage may not impose any annual limit on mental health benefits.

"(B) ANNUAL LIMIT.-If the plan or coverage includes an annual limit on substantially all medical and surgical benefits (in this paragraph referred to as the 'applicable annual limit'), the plan or coverage shall either-

"(i) apply the applicable annual limit both to medical and surgical benefits to which it otherwise would apply and to mental health benefits and not distinguish in the application of such limit between such medical and surgical benefits and mental health benefits; or

"(ii) not include any annual limit on mental health benefits that is less than the applicable annual limit.

"(C) RULE IN CASE OF DIFFERENT LIMITS.-In the case of a plan or coverage that is not described in subparagraph (A) or (B) and that includes no or different annual limits on different categories of medical and surgical benefits, the Secretary shall establish rules under which subparagraph (B) is applied to such plan or coverage with respect to mental health benefits by substituting for the applicable annual limit an average annual limit that is computed taking into account the weighted average of the annual limits applicable to such categories.

"(b) CONSTRUCTION.-Nothing in this section shall be construed-

"(1) as requiring a group health plan (or health insurance coverage offered in connection with such a plan) to provide any mental health benefits; or

"(2) in the case of a group health plan (or health insurance coverage offered in connection with such a plan) that provides mental health benefits, as affecting the terms and conditions (including cost sharing, limits on numbers of visits or days of coverage, and requirements relating to medical necessity) relating to the amount, duration, or scope of mental health benefits under the plan or coverage, except as specifically provided in subsection (a) (in regard to parity in the imposition of aggregate lifetime limits and annual limits for mental health benefits).

"(c) EXEMPTIONS.-

"(1) SMALL EMPLOYER EXEMPTION.-This section shall not apply to any group health plan (and group health insurance coverage offered in connection with a group health plan) for any plan year of a small employer.

"(2) INCREASED COST EXEMPTION.-This section shall not apply with respect to a group health plan (or health insurance coverage offered in connection with a group health plan) if the application of this section to such plan (or to such coverage) results in an increase in the cost under the plan (or for such coverage) of at least 1 percent.

"(d) SEPARATE APPLICATION TO EACH OPTION OFFERED.-In the case of a group health plan that offers a participant or beneficiary two or more benefit package options under the plan, the requirements of this section shall be applied separately with respect to each such option.

"(e) DEFINITIONS.-For purposes of this section-

"(1) AGGREGATE LIFETIME LIMIT.-The term 'aggregate lifetime limit' means, with respect to benefits under a group health plan or health insurance coverage, a dollar limitation on the total amount that may be paid with respect to such benefits under the plan or health insurance coverage with respect to an individual or other coverage unit.

"(2) ANNUAL LIMIT.-The term 'annual limit' means, with respect to benefits under a group health plan or health insurance coverage, a dollar limitation on the total amount of benefits that may be paid with respect to such benefits in a 12-month period under the plan or health insurance coverage with respect to an individual or other coverage unit.

"(3) MEDICAL OR SURGICAL BENEFITS.-The term 'medical or surgical benefits' means benefits with respect to medical or surgical services, as defined under the terms of the plan or coverage (as the case may be), but does not include mental health benefits.

"(4) MENTAL HEALTH BENEFITS.-The term 'mental health benefits' means benefits with respect to mental health services, as defined under the terms of the plan or coverage (as the case may be), but does not include benefits with respect to treatment of substance abuse or chemical dependency.

"(f) SUNSET.-This section shall not apply to benefits for services furnished on or after September 30, 2001.".

"(b) EFFECTIVE DATE.-The amendments made by this section shall apply with respect to group health plans for plan years beginning on or after January 1, 1998.

This Act may be cited as the "Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations act, 1997".

Approved September 26, 1996.

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