The federal government has extended the Mental Health Parity Act – sometimes called the MHPA – until December 31 of 2007.
If you receive Texas employee benefits, that fact is an important one for your mental health treatment insurance coverage.
What the extension does, essentially, is keep active the law that guarantees that when your employer’s group insurance plan offers mental health care coverage, that coverage must be offered at the same level as other health care coverage, such as surgery.
You should realize, however, that the law does not require your employer’s health plan to carry mental health treatment coverage if it does not do so already. Nothing says your insurance plan must pay for therapy, counseling, and treatment – whether inpatient or outpatient treatment – at a mental health center or the mental health division of a regular hospital
But if it does offer mental health coverage, the limits on treatments must be equal. For example, if your plan includes a yearly limit of $100,000 for surgery, then it must include the same limit for mental health treatment.
That was not the case up until 1996. In that year, the MHPA was passed. Built into it was a “sunset” provision that would have caused it to expire on September 30 of 2001. But the law was extended. In fact it has been extended a total of 5 times, which suggests that prospects for its future are good. The disparity between coverage limits on surgery and on mental health treatment above would be illegal under the MHPA.
In order to enforce the parity, a government agency’s duties have been expanded to include health benefits. In the past, the Employee Benefits Security Administration (EBSA) was charged solely with enforcing the laws relating to pensions. Because most Americans who have insurance are covered by their employers’ health plans, EBSA has responsibility for some 150 million workers nationwide.
No, retirement communities throughout the Lone Star State are not in open rebellion, refusing to take their medications and eat dinner at 4 pm. What I am talking about here is a new movement in Texas to allow Texas public employers to not have to report just how much they spend on their retired employees’ health benefits.
Believe it or not, this is an issue for some public employers because of a new requirement put out by the non profit Governmental Accounting Standards Board, which requests that public employers make known just how much they are spending on health care insurance premiums for their retired employees. But in the state of Texas, government officials there are supposedly, according to the New York Times, thinking of letting their public employers off the hook. They don’ t say, “Don’t Mess with Texas,” for nothing!
The rule was initially put out in 2004 by the Governmental Accounting Standards Board, which makes it their job to set out guidelines for public employers when it comes to how they do their books. The reason Texas is responding to it now is because the law was passed in 2004 but does not go into effect until this year, and only then for the largest public employers out there. The rule does not just have to deal with retired employees or current spending, but requires public employers to report on all of their health care spending for current employees as well, as well as estimated future spending on health care down the road.
So far the Texas House cast a vote of 142 to nil to pass a law that would make this rule not apply to Texas public employers. Initially, Texas wanted to ban the law outright, but the version of the law passed allows the public employer to choose for themselves whether or not they want to follow the GASB rule. The Senate will vote on the measure next week.
If you are an employer, does the health insurance plan for your employees include mental health benefits? If so, then you’ll want to know about a recent ruling issued by the EBSA, the federal agency that oversees compliance with laws regarding pensions and health insurance. The vast majority of businesses are covered by the US EBSA, or Employee Benefits Security Administration. It applies to more than 150 million US workers.
A recent ruling with significant impact on Texas employee benefit plans was released quietly, with little fanfare. The Mental Health Parity Act, or MHPA has recently been extended through December 31, 2007. The original MHPA bill was signed into law in 1996. It included a “sunset clause” that meant the bill expired on September 31, 2001. Since then, the law has been amended 5 times to extend the expiration date.
Under this important law, group health insurance coverage cannot place a lower limit on payments for mental health coverage, than for surgery or other medical treatments. In the past, an insurance company could legitimately set a maximum lifetime benefit of $250,000 for surgery, and $15,000 for mental health treatments. That is no longer legal, under the MHPA. Today, a group health insurance plan that sets a $250,000 lifetime limit on surgery, must also pay up to $250,000 per lifetime on mental health treatments.
The same restriction applies to annual caps on benefit amount. The coverage for mental health must be equal to the annual or lifetime limits for other types of treatment, such as surgery or medical treatment.
It’s important to note that this law does not require that every group health insurance plan cover mental health treatments. It merely mandates that if mental health treatments are covered, they must be paid at the same rates as other treatments.
Mental health treatments include visits to a licensed therapist, psychologist or psychiatrist. They may also include stints in rehab for drug or alcohol dependency. Stays in mental hospitals or the mental health wing of a hospital for ailments as diverse as post-traumatic stress disorder, depression and schizophrenia are also covered.
The Texas Department of Insurance wants every employer in the state to know that they are offering at unprecedented opportunity for them to learn about insurance labor law and insurance in general. This opportunity will happen in the capital of Austin, on January 31 of this new year.
What will happen is that speakers from the Texas Department of Insurance will give a program covering all of the bases in insurance, from the health insurance that takes so much of your money and your budgetary power, to life insurance benefits that you give your employees, to the standard property and casualty insurance programs that you must have in place for workers’ comp, to protect your office buildings and warehouses, and to protect you and your employees from law suits and other class action type torts.
The main focus of the January 31 meeting with the Texas Department of Insurance, however, will be on workers’ comp and how you have set up your network of workers’ comp health care providers. The Department of Insurance wants to make it clear to as many employers as want to come listen that there are certain updates on how workers’ comp health care provider networks must be set up; that there have been other changes to the Texas state workers’ comp system; the transition on Independent Representative Panel and how employers can be involved; and future possible legislative issues that employers could be facing down the road with their workers’ comp program.
Spacing at the program is limited, but online is still available if you act now. You can visit the state Department of Insurance Web site for more information, or call them at 512-322-4211. Email is also possible at the following email address: email@example.com. If you are a Texas employer worried about workers’ comp, you may not want to miss this one.
Here is another question that I hear coming from a lot of you readers out there. What happens in the event of a major natural disaster, or a man made terrorism type disaster, when the economy in my locale, or even in the nation, is in shambles and my business has to close down for a time? Such an event is a real possibility, especially along the Gulf coast of Texas, where hurricane season poses a decidedly frightening threat to all businesses.
In the event that a hurricane wracks Houston, for instance, there is something called Disaster Unemployment Assistance, which is available to all employers should a major disaster cause their business to be interrupted, or worse, lost. The only condition really is that you have to prove that the major disaster was a direct cause of the shutdown of your business. In other words, your business shutdown cannot come as a result of a long chain of events that maybe the disaster started, or maybe a chain of events that started before the disaster even happened.
Another condition is that the disaster must be named a “major disaster” by none other than the President of the United States. That defines you whole geographical area as a victim of a major disaster, and allows payments to be made under the Disaster Unemployment Assistance system.
These Disaster Unemployment Assistance payments are made to your former workers starting the first week following the date that the major disaster happened. Then the payments to your former employees continue on a week to week basis, with decisions being made each week whether or not the payments should continue. That means that your employees will be required to file a claim for benefits each week. The payments stop at the latest 26 weeks after the disaster.