Economic Bailout Bill Contains Expanded Mental Health Coverage Rules
The economic bailout bill signed by President Bush on Oct. 3 includes a federal mandate that will require employers and group health plans offering mental health insurance to ensure such benefits are equal to coverage received for physical ailments. It is important to note that the new law does not require health plans to cover mental health or addiction treatment, but if such benefits are offered, they are required to be on par with coverage for all other physical conditions.
Most employers and group health plans currently provide less coverage for mental health care than for the treatment of physical conditions. This often comes in the form of higher copayments and deductibles and stricter limits on treatment for addiction and mental illnesses. However, the new rules are intended to create more parity for mental health coverage and ease the burden on affected plan participants.
Federal officials estimate the law would improve coverage for 113 million people, including 82 million in employer-sponsored plans that are not subject to state regulation. However, the Congressional Budget Office estimates the new requirement will increase premiums by an average of about two-tenths of 1 percent.
The effective date for most health plans will be Jan. 1, 2010; however, businesses with 50 or fewer employees are exempt.
As discussed in the Compliance Alert dated October 23, 2007, North Carolina passed its own mental health parity laws (effective July 1, 2008) that require parity for nine enumerated mental health conditions and did not contain mandated coverage for alcohol and substance abuse. This new federal law requires parity for all mental health conditions as well as for alcohol and substance abuse treatment.
Many insurance carriers currently do not meet the above requirements and will need to change their benefit structure in order to comply with the new law. HCW will keep you posted as the insurance carriers alter their benefits to stay compliant.
For more information on the new law, please click here. If you have any questions, please contact our office at 919-403-1986.
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October 14, 2008
Hill, Chesson & Woody Employee Benefit Services
194 Finley Golf Course Rd, Suite 200,
Chapel Hill, NC 27517
Phone: 919.403.1986
Fax: 919.913.0237
www.hcwbenefits.com