labor lawAdivision of labor law center

Mental and physical health insurance coverage limits will remain equal until the end of 2007 thanks to an important law’s extension signed by the President. The more-than 150 million workers in the U.S. covered by group health insurance packages are affected.

The extension involves Rhode Island employee benefit plans. The law is called the Mental Health Parity Act (MHPA). Before it was originally signed into existence in 1996, health insurance plans could legally have large discrepancies in their coverage limits for physical or mental health treatments. For example, physical health treatment coverage limits might be $100,000 yearly, but mental health limits could be one-tenth or even one-twentieth of that. Such discrepancies are no longer legal.

The original bill included what is called a “sunset clause.” That means the bill had an automatic expiration date. In this case, it was September 31 of 2001. Five amendments since then have assured its continuance beyond the “sunset” date.

The federal enforcement agency is the Employee Benefits Security Administration (EBSA). It was created in 1974 for the sole purpose of enforcing pension issues through the Employee Retirement Income Security Act, or ERISA. Since its inception, it has gone through a number of name changes. In 1986, it became the Pension and Welfare Benefits Administration (PWBA). Then in 2003, it became a sub-cabinet level agency overseen by an Assistant Labor Secretary. Its new mandate includes dealing equally with violations of health care laws and pension laws.

Mental health treatments covered typically include stays in either the mental health wing of a medical hospital or a mental hospital, or psychiatric center for ailments like depression, post-traumatic stress disorder, or schizophrenia; time in a rehabilitation facility (“rehab”) for treatment of drug or alcohol dependency issues; and visits to psychologists, licensed therapists, or psychiatrists.

The new expiration date of the Mental Health Parity Act is December 31, 2007.

So, will all these different ideas ever become a reality in Rhode Island and will you employers ever feel some relief from the ever increasing costs of health care insurance? Well, according to my experts in the state of Rhode Island, these proposals are on the way to becoming the law of the land as we speak. That would put Rhode Island up with Massachusetts as states that have actively pursued reforms that will change the way that employers handle their health care benefits responsibilities.

In the case of the plan coming from the health insurance commission—which by the way is called the WellCare plan—that could be online and useable by employers by the start or the middle of this coming fall. Some predict the start date sometime in October.

The other plan in the works, the one coming out of the House Finance Committee from its Chairman Costantino, was slated to begin working as early as this July. But the insurance companies and the law makers have not completely workers out all of the details about how these new health insurance policies will work (with all of the benefits becoming optional and some services and provider networks being shrunk), so don’t expect insurance companies to start offering trimmed down, cheaper insurance plans until this coming January 1, 2008, say my sources.

And remember, with Costantino, the plans are all optional on the part of the insurance companies, so even though they could offer these cheaper insurance plans, your insurance company does not necessary have to start offering them right away, or at all. They could wait and see what happens to other insurance companies that offer these programs.

Either way, word from employers and their reps in the state is that they are excited about them. As many as three out of four members of the Chamber of Commerce in the state’s major city, Providence, suggested that they might start giving health insurance to their employees because of these plans.