Several people have contacted me with questions regarding Utah employee benefits. Specifically, they want to know if any state or federal law requires their group health insurance to cover mental health treatments, and if the insurer can set a low limit on payments for mental health treatments. Like a lot of questions in labor law, the answer is a little more complex than the question suggests.
Let’s get the simplest part of the answer out of the way first. There is no law requiring that your group health insurance cover any mental health treatments. Although most employers offer plans that do, there are still many that do not cover any type of therapy, or counseling. Even inpatient or outpatient treatment in a hospital or mental health facility may be excluded in some plans.
However, there are several laws in place regarding the extent of coverage, if it is offered. In particular, the Mental Health Parity Act, known as the MHPA, requires that any group health insurance plan that funds mental health treatment, cover it at the same level as other medical treatments, including surgery.
The MHPA bill passed in 1996 included a provision to expire on September 30, 2001. However, the law has been amended 5 times, extending it. . In February 2007, the MHPA was again extended to December 31, 2007. It’s a fairly safe bet that this law will be with us for some time to come. Under the MHPA, mental health treatments must receive parity with other types of treatment.
Prior to 1996, many group health care plans set very low annual limits for mental health treatments. A health insurance plan that paid up to $100,000 per year for surgery might pay only $1,500 per year for mental health treatment. Today, that would be illegal. The plan would have to pay the same amount for both types of treatment.
Most Americans with insurance are covered by employee benefit plans. The federal government has a specials agency to enforce law regarding employee benefits and pension plans, the Employee Benefits Security Administration, or ESBA. More than 150 million workers are covered under ESBA plans. The current name reflects the reality that the agency now handles as many violations of law concerning health care as pensions.