Many employers provide mental health coverage as a part of the healthcare plans for their employees, as New Mexico employee benefit. But there is also a great number of employees who do not. If an employer decides not to provide mental health coverage, it is his own personal choice since there is no law that obliges him to do so. But if an employer decides to provide it, he has to observe a number of regulations, particularly the Mental Health Parity Act or MHPA.
Before 1996, an employer who chose to provide mental health coverage to his employees as a part of their group insurance plans had the freedom to decide whatever amount he wanted to designate to this end. Suppose, the health plan had a provision for up to a hundred thousand dollars for surgery, it could have a total of a measly thousand dollars’ provision for mental health. But it all changed by enactment of MHPA.
The Mental Health Parity Act was passed in 1996 with a provision to expire on September 30, 2001. But it has been amended no less than 5 times, extending it further. In February 2007, it was extended up to December 31, 2007. One would be correct in thinking that this law would undergo further extensions and remain in effect for some time to come. The MHPA requires that mental health treatments must receive parity with other types of treatment. In simpler terms, this law requires that any group health insurance plan that funds mental health treatment, cover it at the same level as other medical treatments, including surgery.
A large number of American citizens with insurance are covered by employee benefit plans. The federal government has a dedicated agency to enforce the laws regarding employee benefits and pension plans. It is known as the Employee Benefits Security Administration, or EBSA. More than 150 million workers are covered under EBSA plans. The current name reflects the reality that the agency now handles as many violations of law concerning health care as pensions.
New Mexico employee benefit plans have been impacted by a recent ruling. This ruling extends the Mental Health Parity Act, also know as MHPA, through the end of 2007. Originally, the MHPA bill, which was signed into law in 1996, was supposed to end on September 30, 2001. Instead of expiring, this bill has been extended 5 times over the years.
MHPA says that under group health insurance coverage, mental health coverage cannot have a lower payment limit than that one used for medical treatments and surgery. The reason this law is important is that in the past, an insurance company might set a limit for mental health treatments of $15,000 while setting the surgery benefit limit at $250,000.
Because of MHPA, lifetime and annual benefit caps cannot be lower for mental health treatments than they are for other types of medical treatments and surgery. The covered mental health treatments may include visits to licensed therapists, psychiatrists, and psychologists. If necessary, a stay in a rehab facility to treat drug or alcohol dependency also should be covered. In addition, in the case of schizophrenia, depression, post-traumatic stress disorder and other ailments, a stay in a mental hospital should be covered.
Not all group health insurance plans cover mental health treatments, and this law does not require them to do so. Instead, this law states that if mental health treatments are covered by the group health insurance plan, then the plan should have the same limit for mental health treatments that it has for other treatments.
Employers need to be aware of the ruling regarding MHPA. This ruling was made by the US Employee Benefits Security Administration, also known as EBSA. EBSA is the federal agency in charge of making sure businesses comply with pension and health insurance laws. Most US businesses are covered by the Employee Benefits Security Administration.
A law with an enormous impact on New Mexico employee benefit plans, has been extended through December 31, 2007.The Mental Health Parity Act has just received a new lease on life. The MHPA is a law requiring that benefit limits on mental health care coverage must equal the limits on benefits for medical and surgical procedures.
The ruling by the EBSA or Employee Benefits Security Administration involves about 150 million employees throughout the U.S. The EBSA covers a significant majority of businesses nationwide. Its job is to monitor group health insurance plans and guarantee that they comply with any laws covering health insurance and pensions.
The law does not demand that employers’ health plans must cover mental health – only that if a plan has mental health coverage, it should be on a par with surgical or other medical treatments. The payment limits must be the same.
The Employee Benefits Security Administration, or EBSA, issued the ruling. The agency is the watchdog group guaranteeing adherence to health insurance and pension law compliance.
The law was originally enacted in 1996, and through a “sunset clause” expired on September 31 of 2001. Five amendments have extended that expiration date since then. The new ruling received little attention when it was released recently.
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 law puts the same restrictions on annual caps of benefits. In short, mental health coverage must equal the lifetime or annual caps for treatment such as surgery or other medical work.