Insurance Coverage Parity for Mental IllnessTreatment

BACKGROUND: P.L. 104-204 requires those insurance plans that cover mental illness treatment and are also covered by the terms of the Kassebaum-Kennedy-Hastert “Health Insurance Portability and Accountability Act of 1996" (P.L. 104-191) to provide parity for lifetime and annual caps between mental illness treatment benefits and medical/surgical treatment benefits.

Regulations to implement the Mental Health Parity Act were expected to be issued as part of the larger health insurance reform law in early April 1997. On February 11, Administration witnesses testified before the Senate Labor and Human Resources Committee that the mental health parity law regulations would be issued only after the larger insurance reform regulations were issued, and perhaps not until October 1997. This would make it extremely difficult for insurance companies to comply with the regulations by the January 1, 1998, effective date of the parity law. In addition, several other key policy matters are at issue, including the establishment of a process by which plans may apply for an exemption, and how compliance will be monitored.

APA POSITION: APA urges Congress to act forcefully to ensure that the Executive Agencies responsible for implementing the mental health parity law comply with the statute and clear Congressional intent as they prepare to issue regulations.

Specifically, APA recommends that Congress ensure that the pending regulations to implement the mental health parity law:

1. Are issued promptly so as to ensure that insurance companies and employer benefit managers have plenty of time to allow for implementation of the law.

2. Are clear, direct, and unambiguous in requiring the parity law to be implemented by all health plans effective January 1, 1998, as required by the law.

3. Permit applications for an exemption to the law under the 1 percent threshold (as the law provides) only using “real world” data following actual experience.