Employers in the state of New Hampshire, you could perhaps be seeing a higher health care insurance bill coming your way because of a new law passed in the state legislature. The New Hampshire state House this past week voted on a measure that would make it so that health care insurance companies had to allow divorced spouses to remain on their spouses health care plans.
The vote on the measure was 227 for it and 122 against it. The law makes it possible for divorced spouses to remain on these health care plans for as much as three year, or in the very least, until one of the spouses in the broken home gets married again. The old laws in the state of New Hampshire, as well as on the federal level, say that in these divorce instances, spouses can stay on their health care plans of their ex-spouses, for as much as three years.
So what is the difference in the new New Hampshire plan? Well, the New Hampshire plan passed last week allows ex spouses to do so at a much cheaper level than the current state law and the federal law. that would save these spouses a lot of money in insurance premiums for their health care, but leaves all of us wondering who will pick up the bill. Will it be the health care insurance companies?
According to State Representative Stephen DeStefano, a Democrat, the new law in New Hampshire would not only lower health care insurance costs for families and employees, but it would not lead to higher costs for employers either. The bill is not quite law yet, so we will have to wait and see what actually does transpire. The law has to go back to the Senate, who have to agree to changes made to the law by the House.
New Hampshire employee benefits include some important guarantees about insurance coverage for mental health treatment.
One of the most important of these guarantees is the law known as the Mental Health Parity Act of 1996. As the name suggests, it requires that the limits of mental health treatment coverage must be equal to those for physical health coverage like surgery.
Most workers are part of an employer-based group health insurance plan. Most of those plans include mental health treatment coverage. But they may not. Federal and state laws do not require that a group health plan include coverage for mental health treatment. The law only says that, if mental health treatment is included, its limits must be in line with other forms of coverage.
Before 1996, no guarantees were in place. A health plan could offer relatively low coverage for mental health treatments. A plan could put a $100,000 annual limit on coverage for surgery, but mental health treatment coverage limits might be just a fraction of that – $1,500, for example. It would apply whether the treatment was therapy, counseling, or even inpatient or outpatient treatment at a mental health center or the mental health section of a hospital.
Then in 1996 the Mental Health Parity Act (MHPA) was passed. At the time, it included a “sunset” clause, putting an expiration date of September 30, 2001 on it. But the law has been extended 5 times since then. The most recent was in February of 2007. The latest extension keeps the law active until December 31 of 2007. Future extensions are very likely.
A federal government agency known as the Employee Benefits Security Administration (EBSA) enforces laws regulating group health insurance policies. The EBSA formerly dealt with violations of pension law alone, but its duties have been extended.
Some 150 million employees are covered by workplace health benefit plans.
The mental health treatments covered by insurance typically include visits to doctors of psychiatry, psychotherapists and analysts. They also cover the admission to the mental health division of a hospital or to psychiatric hospitals. Diverse mental disorders, as post- traumatic stress, depression or schizophrenia are some of the ailments that are treated.
A new extension of Mental Health Parity Act, or MHPA, has a direct impact in New Hampshire employee benefit plans.
The end of the MHPA was recently postponed to December 31, 2007, under an act signed by the president. This law was approved in the 90’s and included an expiration date on September 31, 2001. But it was amended 5 times, the last time earlier this year.
This law is very important because defines that mental health treatments must be covered on the same basis as other medical treatments in any health insurance plan.
Prior to 1996, when MHPA was approved, many group medical health insurances provided large amounts for certain medical treatment, for example $100,000 per year, but covered mental health treatments at a much lower rate such as $10,000. Actually that it is impossible, or more correctly, it is illegal. Any health insurance plan that covers mental health benefits must provide benefits in the same amount as other treatments, even surgery.
In 2003, the Pension and Welfare Benefits Administration, or PWBA, was upgraded to sub-cabinet level, and renamed the Employee Benefits Security Administration, or EBSA. This agency has the responsibility to enforce MHPA and other laws related to healthcare and pensions. Their work in controlling violations of such laws is important because more than 150 million Americans are covered by group health insurance plans. The ESBA was created in 1974 under the name of Employee Benefits Security Administration. That same year, the Employee Retirement Income Security Act, or ERISA was enacted. In January 1986, the agency became the Pension and Welfare Benefits Administration, or PWBA.
Besides the legal question, the big question mark with the civil union bill in New Hampshire is how it will affect employers, and loyal readers, I know that is the question that is most on your mind if you have operations in the state of New Hampshire. Some experts suggest that employers might actually try to skipper the bill, especially large multistate employers who then would only have their operations in New Hampshire affected. They could do this by trying to stick strictly with federal law, where no such civil union benefits exist.
The recently passed Defense of Marriage Act actually gives employers a reason not to recognize these civil unions. That is because the Defense of Marriage Act allows states not to have to recognize same sex marriages and civil unions that occur in other states. This could affect how employers give their employees in these civil unions their social security payments, their pension benefits, their health coverage, and other benefits.
Or they could just apply their current domestic partner benefits—which we learned many big employers already have them, at least half of the Fortune 500—and fold in civil unions in New Hampshire into the same sort of policy.
This might be easier said than done, however. Another state where there is a civil unions law is New Jersey, which just passed a similar law a couple months ago. The state could give an idea of ho such a law might affect New Hampshire. In New Jersey, for instance, the state is finding trouble in trying to implement their new law, and employers are not finding it so easy to extend health and other benefits to the other person in these civil unions, according to my sources. One of the reasons is simply that insurance forms don’t have a check box for civil unions or domestic partner.
There is a bill in the New Hampshire legislature similar to the bill that is being proposed in Capitol Hill in Washington DC that we were talking about yesterday. The bill in New Hampshire, though, is much closer to getting passed in the state than the federal bill is to getting passed on the federal level, so New Hampshire employers, I hope you are ready for what could be an important change in the way you do benefits. The governor of the state, Gov. John Lynch, has already said he would sign the bill if it gets to him.
We could know as early as this coming week what will happen. That is because the bill is up for votes in the Senate, and according to my sources, the bill seems to have a good chance of passing in the New Hampshire Senate.
If it did pass, the law would go into effect this coming January 1, 2008. Some of the challenges, though with the bill is that it could face a challenge in he courts, and if that happens then the law could be put on hold until the courts decide whether or not the law is constitutional. At heart of the legal challenge, say my sources, is that this civil unions benefits bill could perhaps even discriminate against opposite sex couples, or at least that is what the opponents of the measure are now saying. The reason they say that is because opposite sex couples would not be able to get a civil union.
That is a slightly different situation than the bill we discussed on the federal law, which would give health care benefits to all domestic partners, whether they are in same sex or opposite sex couples. That law could work for a opposite couple who had been living together unmarried for 20 years, or a same sex couple who had been living together for the last two years.