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.