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.
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.