New NC Law Provides Parity for Mental Health Coverage

Earlier this summer, Governor Mike Easley signed into law a bill that will significantly affect mental health benefits for employers across the state. The new law, which becomes effective July 1, 2008, requires insurers in North Carolina to provide the same level of coverage for treatment of certain mental health conditions as they do for any medical condition. Although it does not apply to any addictive disorders, such as alcohol abuse or drug addiction, it also makes provisions for various other mental health conditions.

According to the text of the bill (HB 973), insurance carriers will need to provide group health benefits for the necessary care and treatment of mental illnesses that “are no less favorable than benefits for physical illness generally including application of same limits.” (The bill addresses “limits” as deductibles, coinsurance factors, co-payments, maximum out-of-pocket limits, annual and lifetime dollar limits.)

The nine mental health conditions covered under this statement include: Bipolar Disorder, Major Depressive Disorder, Obsessive Compulsive Disorder, Paranoid and Other Psychotic Disorder, Schizophrenia Disorder, Schizophrenia, Post-Traumatic Stress Disorder, Anorexia, and Bulimia.

For mental health conditions not listed above, the bill states that a group health plan shall provide coverage for at least 30 days of inpatient/outpatient, as well as 30 office visits per year.

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. Employers currently see mental health benefits with lower coinsurance reimbursement amounts, no out-of-pocket maximum, or coverage limited to 20 days – all of which are examples of benefits that will have to change.

The entire text of the bill can be found by clicking here. We will keep you posted as the insurance carriers alter their benefits to stay compliant. If you have any questions, please contact our office at 919-403-1986.

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October 23, 2007

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