As health care costs rise, employee health benefits are on the mind of almost every American. Over 1.5 million workers in the United States are covered under group health insurance plans. It is an attractive benefit that many workers value.
Recently President Bush signed a law that will affect Wisconsin employee benefit plans. The Mental Health Parity Act or the MHPA was a bill that was originally signed into law in 1996. It included a sunset clause which means it had an expiration date. Since then the law has been amended 5 times to extend the expiration date. Under this latest ruling signed by the President the MHPA is now extended through December 31, 2007.
The Employee Benefits Security Administration or EBSA is responsible for the enforcement of the Employee Retirement Income Security Act of 1974. This agency was previously known as the Pension and welfare Benefits Program. However, from January of 1986 it was then called the Pension and Welfare Benefits Administration. The agency now handles as many violations of regulations regarding health care as it does pensions. In the year 2003 the agency was upgraded to sub- cabinet level.
Before the MHPA was put in place, many group health insurance plans set a liberal limit on medical treatment, such as $100,000 per year. However, mental health plans were often given annual limits well below what was offered for other types of treatment. Now that MHPA is in place, is no longer allowed.
Under the MHPA, any group health insurance plan offered to employees must cover mental health treatments such as visits to a licensed therapist, psychologist or psychiatrist with parity to other treatments including surgery. Mental facility stays or the mental health section of a hospital for illnesses such as post-traumatic stress disorder or depression are often covered, as well as rehab for drug and alcohol abuse.
Over 150 million people in the United States are covered under Employee Benefits Security Administration, or EBSA, plans. The EBSA is a federal organization that enforces laws concerned with employee benefits, including pension plans and health care. A majority of companies offer some kind of benefit plan, because it is something that attracts employees.
Years ago group health care plans that offered coverage for mental health could set low annual limits on treatment. Before 1996, mental health was not required to be covered at the same level as other treatments like surgery. The MHPA, or Mental Health Parity Act, requires that treatments for mental conditions be covered at the same rate that other medical treatments are covered, including surgery. That means if someone’s medical insurance covers up to $90,000 for surgery, mental health coverage has to be covered up to at least $90,000 as well.
The bill for the MHPA has been amended 5 times, for its continuation. The latest extension to the act, just this passed February, allows the act to stand until December 31, 2007. This is not a law that insists every employer include mental health in their benefits, but it does govern those plans that opt to cover mental health treatments.
Employers do have the legal option of not offering coverage for mental health, but if they choose to offer this benefit, there are some guidelines. One of the major regulations, as mentioned above, is that it is not legal to cover other medical procedures at a higher rate than mental treatment.
Many simply choose not to offer mental health treatment coverage as a benefit, and that is perfectly fine. Employers are under no obligation to offer health insurance coverage at all. It is, however, to the benefit of the employer to offer benefits, as it does attract and keep employers.
With very little fanfare, a federal agency has passed a ruling applying to more than 150 million employees in the U.S. The ruling extends a law requiring that mental health coverage limits are equal to medical/surgical benefit limits in group insurance plans.
The law does not require that every Wisconsin employee benefit health plan must cover mental health treatments as well. What it requires is that, if a health plan offers mental health coverage, the benefit caps must equal those of the coverage for medical and surgical procedures.
The federal agency covers most businesses in the U.S. Its job is to guarantee that group insurance plans abide by laws controlling pensions and health plans. The MHPA became law in 1996, and since that time has been subject to five amendments extending it past its September 31, 2001 “sunset clause,” or expiration date.
The MHPA does not require employers to include mental health care coverage in their group insurance plans. It requires parity. In other words, if a group health insurance plan already has a mental health component, the benefit limits for that mental health portion must not be lower than those for medical and surgical coverage. Prior to enactment of the law, it would have been entirely legal for an insurance company to have a $250,000 limit as its absolute limit for surgery, but only a $15,000 limit for mental health care coverage. The law also impacts annual benefit caps. Under MHPA, mental health coverage limits must be the same as the lifetime or annual caps on surgery or medical care.
What’s included under the category of mental health treatments? Stays in rehabilitation facilities, or “rehabs” for treatment of alcohol or drug dependency are covered, as are visits to mental health professionals – licensed therapists, psychiatrists, and psychologists. Also included are stays in the mental health section of a medical hospital, or in mental hospitals themselves, for illnesses like schizophrenia, post-traumatic stress disorder, and depression.
There is nothing in the law requiring you as an employer to have a mental health component in your group health insurance program. It requires instead that, if you already have mental health coverage, its benefit limits must be equal to those of your plan’s medical or surgical treatment coverage.