HR Management & Compliance

Mental Health Parity Measure Part of Bailout Package

A mental health parity measure has been passed in Congress as part of the $700 billion financial rescue package. The measure requires covered employers that provide health plans to cover mental illness and substance abuse on the same basis as physical conditions. President George W. Bush signed the financial package on Friday, October 3. The mental health provisions go into effect one year after enactment, with a different effective date for collective bargaining agreements.

Here are some of the provisions of the mental health measure:

  • It applies to group health plans of 51 or more employees.
  • It forbids employers and insurers from placing stricter limits (for example, higher copayments or covering fewer doctor’s visits) on mental health care than on other health conditions.
  • It applies to out-of-network coverage so that plans that offer out-of-network coverage for medical conditions also must provide out-of-network coverage for mental conditions.
  • It leaves in place state parity measures.
  • It requires that the Departments of Labor, Health and Human Services, and the Treasury issue regulations within one year.

Keep up with the latest legal changes affecting employer benefits and trends in employee benefits with the Benefits and Compensation Law Alert and Benefits and Compensation Law for Nonprofits and with changes in federal employment laws in the Federal Employment Law Insider.

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