labor lawAdivision of labor law center

A bill putting mental health insurance coverage on a par with surgery and other medical procedures has just been extended to the end of 2007.

The ruling by an agency that monitors compliance with health insurance and pension laws applies to 150 million workers nationwide, and has a dramatic influence on Illinois employee benefit plans.

The law is the Mental Health Parity Act, or MHPA, passed originally in 1996, and was just extended through a ruling by the U.S. Employee Benefits Security Administration (EBSA). Benefits under the bill are now valid at least through December 31, 2007.

Mental health treatment includes the following:

• Visits to a psychologist, licensed therapist, or psychiatrist.
• Stays in rehabilitation facilities for drug or alcohol dependencies.
• Stays in mental hospitals or the mental health sections of hospitals for such ailments as schizophrenia, depression, and post-traumatic stress disorder.

The law does not mandate that all health insurance plans include treatment for mental health. What it requires is that, if an existing health plan already includes mental health benefits, those benefits cannot have a lower limit on payments than those for medical and surgical treatment.

Annual caps on benefit amounts must be equal. In other words, mental health coverage must be the same as the limits – whether lifetime or annual – of other treatments. The coverage may not put a lower lid on mental health coverage. For example, before the advent of the law, a plan could clamp a lifetime benefit limit of a quarter of a million dollars for medical/surgical treatment, but just $15,000 for mental health care. Under the MHPA, however, any plan putting a $250,000 lid on medical care must put the same among on mental health treatment.

The ruling by EBSA was released without attention. In essence, it continues the MHPA through the end of 2007. The MHPA has been amended five times to extend its original “sunset clause” expiration date beyond September 31, 2001.

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