A law recently signed by President Bush will affect Virginia employee benefit plans.
Health benefits are a major issue for anyone seeking employment these days. The Mental Health Parity Act or the MHPA bill was originally signed into law in 1996. It included a sunset clause which allowed it to expire on September 31, 2001. The law has been extended five times since then, which extended the expiration date. Under this latest extension signed by the president, the MHPA is now extended through December 31, 2007,
Today group health insurance plans cover more than 150 million people in the United States.
Under the MHPA, any group health insurance plans offered to employees must cover mental health treatments such as visits to a licensed therapist, psychologist or psychiatrist at the same rate as other treatments. They also include stays in mental hospitals or the mental health wing of a hospital for ailments as diverse as post-traumatic stress disorder or depression. Rehab for drug and alcohol abuse should also be covered.
Before the MHPA, it was common for many group health insurance plans to set generous limits on medical treatments and not so generous limits on mental health treatments. For example, a limit of $90,000 or more per year for ordinary medical treatments, while giving mental health plans annual limits as low as $5,000 or $10,000 was acceptable. Under the current law, group health insurance plans must regard and fund mental health treatments just as they do any other treatments.
The Employee Benefits Security Administration or EBSA was created to enforce the Employee Retirement Income Security Act of 1974. At that time the agency was known as the Pension and welfare Benefits Program. That name was changed to the Pension and Welfare Benefits Administration in the beginning of 1986. In 2003 the agency was upgraded to sub- cabinet level which is overseen by an Assistant Secretary of Labor.
Under a recent ruling, workers in Virginia may not have to worry about the cost of funding mental health treatments.
This will have a positive outcome for Virginia employee benefit plans. This is due to a ruling by the Employee Benefits Security Administration, and the ruling applies to over 150 million workers in the United States.
The Mental Health Parity Act, or MHPA was recently extended through December 31, 2007. Previously, the original bill has a “sunset clause” written into it, when it was signed into law in 1996. This meant that the bill would expire on September 31, 2001. After 5 amendments, the expiration date has been extended.
It is now illegal for the amount of coverage on an employee benefit plan to differ for medical and mental health conditions. Simply put, coverage for mental health must be treated in the same way as cover for other medical conditions including surgery.
However, it is important to note that this only applies if the plan covers both mental and medical conditions. It doe not mean that all group health insurance plans must cover mental health treatments. Workers would be well advised to check their plans to be sure both are covered before filing claims for treatments.
In the past, it was legal for group health insurance coverage to place a limit of, for example, $250,000 on the treatment of medical conditions, whilst only allowing $15,000 for the treatment of medical health conditions.
This is no longer the case.
Treatments covered for mental health are diverse and should meet most workers’ needs. They include a stay in a mental health wing of a hospital. This might be for depression, schizophrenia or post-traumatic stress disorder. It also includes visits to a psychiatrist, psychologist or other licensed therapist. Stints in rehab for drugs and alcohol abuse are also included.