labor lawAdivision of labor law center

The Mental Health Parity Act, also known as the MHPA has been extended through December 2007. This is under a law signed by the president. The law was first signed into law in 1996, with a “sunset clause” contained within it. But after 5 amendments, the date of expiry has been extended.

This has a positive effect on Pennsylvania employee benefit plans. It also has a far-reaching positive effect on the other 150 million plus workers throughout the United States who are covered by group health insurance plans.

Prior to the Mental Health Parity Act, employees could find that when they needed to obtain funds for the treatment of mental illness, the funds available were considerably less than those available for other medical conditions.

Sometimes the difference was very great. In some cases the funds for more general medical conditions was as much as $100,000 or more. But the funds available for mental health conditions in some cases fell between $5,000 and $10,000, or even less.

The Mental Health Parity Act now makes this discrepancy illegal. Any group health insurance plan offered to a worker has to allow the same funds for both mental illness and other medical conditions.

The employee has considerable freedom in what these funds can be used for. For example, they may need to visit a psychiatrist, psychologist or a different type of licensed therapist. Under the Mental Health Parity Act, funds will now be available through their public health insurance plan to cover this.

The public health insurance plan will also cover a stay in hospital for a mentally related illness. This might include post-traumatic stress disorder, depression or schizophrenia, as well as many other mental illnesses.

The funds can also be used for rehab for drug or alcohol related dependency.

The Mental Health Parity Act now means that mental illness is treated the same as surgery and other medical treatments within public health insurance plans.

Many people have questions on health insurance coverage for therapy and other mental health treatments. 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 Pennsylvania employee benefit plans.

This new ruling has a deep impact on Pennsylvania employee benefit plans. Nationwide, in excess of 150 million workers are affected.

The regulation is called the Mental Health Parity Act, or MHPA, and is now extended until December 21 of 2007. The ruling comes down from the EBSA, or the U.S. Employee Benefits Security Administration. The EBSA is the watchdog agency requiring adherence to the regulations on health insurance.

Group health plans are not allowed to put lower limits on mental health coverage than they do for medical procedures, including surgery. Before passage of the original law, your company’s coverage plan could legally have a $250,000 limit on medical care benefits but a $15,000 limit on mental health treatments. Now the two must be equal – plans with the $250,000 medical limit must have the same $250,000 benefit limit on health care. Annual caps on benefits are covered also, with mental health coverage equal to the lifetime or annual ceiling on medical or surgical procedures.

Typical mental health treatments would be stays in mental hospitals or mental health sections of medical hospitals for illnesses ranging from depression to schizophrenia or post-traumatic stress disorder. Visits to psychiatrists, licensed therapists, or psychologists are also covered.

The ruling continues a process begun after the law was originally passed. At that time there was a “sunset clause” which essentially ended the bill on September 31 of 2001. The law was amended five times after that to lengthen the expiration date.

Under current federal regulations, a health insurance plan that covers up to $150,000 per year for surgery cannot pay just $1,500 for mental health treatment. That has been illegal since 1996. Prior to that year, it was a normal practice in many healthcare plans was to pay a lower amount for mental treatment.

In 1996, Mental Health Parity Act, or MHPA, was approved, to regulate this matter. This bill requires that any plan that includes mental health in the coverage must pay the same amount for this concept as for other types of treatment, including surgical procedures.

The MHPA bill was originally intended to be valid until September 30, 2001, but it has been extended several times. The most recent extension was in February 2007, when the end of the MHPA was postponed to December 31, 2007.

All indications are that the bill will be extended again, and mental health programs will maintain the same benefits as they do today.

Many people have questions about Pennsylvania employee benefits. Like a lot of questions in labor law, the answers could be more complex than expected. A frequently asked question is, “Can the insurer set a low limit for treatments related to mental health?” Other questions are about state or federal laws. Does any law demand the insurers to cover mental health treatments?

The easiest answer is that there is no law that obliges any group health insurance plan to cover mental health treatments. That is optional. Many employers offer plans that do cover such treatments, but many plans don’t. Sometimes the coverage includes treatment in a hospital, while other plans include outpatient treatment.

More than 150 million Americans employees are covered under plans under the jurisdiction of the Employee Benefits Security Administration, ESBA. This federal government agency enforces the law about employee benefits and pension plans, and their name reflects this mission.

Pennsylvania is similar to Oregon, in that the state has what is called the Unemployment Compensation Trust Fund. That is where all employers’ contributions go when they pay their unemployment insurance taxes. The state then uses the trust fund to pay out the benefits to the unemployed workers out there in the Keystone State.

And like in Oregon, for the system to work properly in Pennsylvania, it takes more than money. Employers in Pennsylvania have to provide the state system with quarterly reports on all of their wages paid and covered under the unemployment insurance regulations, and they must also pay out their contributions on a quarterly basis based on these wage reports.

And like in Oregon—and basically in any state—employers in Pennsylvania must have an up to date and accurate personnel file system in order to track all of the info on their workers, former and current, that the unemployment insurance system relies on to pay the right benefits to the right unemployed adults.

For instance, the state of Pennsylvania strongly recommends that all employers in the state have complete employment and payroll records for all of their employees, going back to the time that your company started. You should also have cash books, journals, corporate minutes, and ledgers. The state officials suggest that you keep these records for up to four years until unemployment benefits related to them are paid off.

The Pennsylvania folks also recommend keeping absence reports for up to two years after you pay out the last of the benefits for a certain employee. Absence reports, don’t forget, can go a long way to help you explain why an employee was not laid off, but fired instead (and thus not deserved of unemployment benefits). For all of these records, you should have them all stored in one location, and accessible in case the state officials themselves want to take a look.

According to Pennsylvania Unemployment Insurance posters, Unemployment Compensation (UC) protects workers against job loss by providing temporary income support to people who become unemployed through no fault of their own. UC Benefits are paid, for a limited time, to individuals who are able and available for suitable work, and are actively seeking new employment. To qualify for UC benefits, a worker must have performed services covered under the Pennsylvania UC Law (Law), and must have worked for an employer who is required by Law or elects to pay into the UC Fund.

Businesses that provide employment covered under the provisions of the Pennsylvania (PA) UC Law must register with the Commonwealth for UC coverage within 30 days of the date that covered employment is first provided. Act 5 of 2005 provides for civil and criminal penalties for employers who willfully fail or refuse to file a required registration document with the Department. Additional penalties occur if the business does not post Pennsylvania Unemployment Insurance posters.

Every calendar year, an individual contribution tax rate is computed for each active employer; and a rate notice is mailed to each employer containing information about the rate assigned for that calendar year. If an employer disagrees with the information on the rate notice, an appeal may be filed within 90 days of the date of the rate notice.

Quarterly reporting forms are mailed to employers near the end of each calendar quarter. The employer is responsible for completing and filing these reports, showing wages paid to employees, and remitting any resulting contributions based on those wages. Reporting employee wages and remitting contributions is required even if no reporting form is received by an employer. Legal action may be pursued if an employer does not file the required information and/or remit any resulting contributions.

Employers who cease paying wages in Pennsylvania must notify the Office of UC Tax Services (UCTS) promptly, so the mailing of quarterly reports can be discontinued and the account closed. Only at this point may Pennsylvania Unemployment Insurance posters be removed.