Federal Mental Health Parity Law and New York Bill

Federal Mental Health Parity Law and New York State bill

I haven't had time to properly interlink these pages; to navigate, use back browser or return (go to if not initially there) the main index page of this section of mmy site.

I have found myself with a nascent interest in mental health parity legislation. I formerly belonged to an extremely good HMO, one of the largest in New York State, one of the largest and considered the best HMO in the Western New York area - Community Blue Advantage, with Community Blue of Western New York - and my mental health coverage stinks. The mental health provisions of this policy are such a specimen of the need for legal reform, I put it on this site. See the mental health provisions of my Community Blue Advantage contract and procedures in the Blue Book (their procedure manual); they aren't even the same provisions! It must be seen to be believed. Actually, though, the provisions are very typical of policies written around the 1996 Federal Mental Health Parity Law.

A federal "mental health parity law" was recently passed. This law is not a mental health parity act; it isn't even close enough to be considered a joke. It requires the same lifetime and annual caps for mental health coverage as for other medical conditions. A copy of the law is below. It's intention as it passed was to get a foot in the door for parity legislation. As NAMI's fact sheets on the law explain, this law has the following "shortcomings".

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.

In other words, the loopholes in this law are alot bigger than the law. It is basically a worthless law. It doesn't do anything. NAMI claims that the higher annual and lifetime caps is a significant step, but I don't see how when employers don't have to cover any form of care or diagnosis they don't want to and can cover as few days of hospital care and outpatient visits as they wish! My plan doesn't even provide any cap on mental health care, though they do have caps; they don't need to! See NAMI Employee Equal Coverage Kit

As of the middle of 1999, Domenici and Wellstone have introduced a genuine mental health parity bill in Congress. See NAMI's press release

Domenici and Wellstone's bill remains in committee (as does its house equivalent) in early 2000. For the status, See my page on federal parity legislation President Clinton asked for hearings in summer 1999, on how this law is working, and an aide in one of the three Congressional sponsors' offices, I think H.Rep. Roukema's office, told me that they are trying for a hearing in April or May. This bill would be provide full mental health parity for serious mental illnesses.

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.-

"(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.

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

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

"(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

"(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.

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

"(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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In 1999, New York State had a much better mental health parity bill. My familiarity with New York State's situation ended when I moved away from the state in December, 1999; the information below was current in the summer of 1999.

It isn't perfect; the way I read it, it doesn't require employers to cover all forms of mental illness (ie, chronic mental illness) or to provide medical care as distinct from "employee assistance". It passed the Assembly last year and the Senate Insurance Committee, but died on the Senate floor. It passed the Assembly in April of this year, and is now in the Senate Insurance Committee, where the chairman, Senator Seward, seems currently disinclined to release it. To release a bill means bringing it up in Committee for a vote. The bill is A6235, S2089. (In 1999). (Last year, 1998, the bill was A8315 or 8351, and S5484.) Current strategy is to get a majority of 18 of the 35 Senate Republicans, who are in the majority, to co-sponsor the bill. Current co-sponsors are Balboni, Bonacic, DeFrancisco, Fuschillo, Hoffman, Johnson, Larkin, Marchi, McGee, Padavan, Skelos, Spano, Trunzo, Velella, Wright. Libous is the sponsor.

Lobbying for the bill is a coalition called the Mental Health Equity Not Discrimination (MEND) Coalition; it was started by the New York State Psychiatric Association and has a large number of medical and mental health professional organizations and mental health advocacy organizations as members. I don't know how to contact MEND yet. I found the Mental Health Association in New York State particularly both informative and working hard on it.

An important piece of political information; such groups as the New York State chapter of the American Psychological Association and the New York State social workers' association are among the more active members of MEND; that lends the bill numerical strength but probably not logical punch in terms of convincing legislators to treat mental illness as disease!

A copy of the bill and its status can be found at: NYS Senate NYS Assembly The Senate search feature turns up more information.

These sites also include the addresses, e-mail, etc., of legislators, and maps of districts. I learned my legislative districts by calling my local Board of Elections.

A number of states have actual, viable, mental health parity laws. The fact that Texas is one of them may explain my sister's noncomprehension when I told her I have real problems with my insurance coverage. The NAMI pages on the federal mental health parity law list the states and tell what the law provides for for each state.

Links to other good pages, articles about Mental Health Parity Law and particularly the New York State bill:

Lisa Neutel's page on New York State parity bill

LIsa Neutel's page on federal mental health parity law

NAMI press release on final fate of last year's New York State mental health parity bill

New York State Nurses Association very good article on last year's New York State mental health parity bill.

Mental Health Assc of NYS page on 1997 parity bill with list of its most important professional and advocacy supporters.

April 23 issue of MHANYS's Friday Fax from Albany with current update and who to write to

April 16 issue of MHANYS's Friday Fax from Albany with current update and who to write to

I would be glad to include a link to NAMI-NY's page on the New York State mental health parity bill and its status - when they have one (Ahem!) - instead of simply a plug to join NAMI! Er-r-r-r-r!

Interesting (te, he, he) page on I think Blue Cross of Central New York's mental health benefits for it's own employees! Certainly for some company's employees with Community Blue.

contact me (Dora Smith) at tiggernut24@yahoo.com or dorasmith@usa.net

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