Guest Article

(From the March 10, 2008 issue of Deloitte's Washington Bulletin, a periodic update of legal and regulatory developments relating to Employee Benefits.)

House Passes Mental Health Parity Bill, Complicated by Adding a Genetic Nondiscrimination Provision

Parity between mental health coverage and coverage for medical/surgical services with respect to deductibles, copayments, coinsurance and limits on the duration and scope of mental health treatment could become a permanent reality this year. Certain mental health parity requirements have been in effect for several years through a series of laws each of which contained a sunset provision, requiring Congress to reenact the law before the sunset date. But now, after several limited periods of authorizing mental health parity provisions that sunset by a stated date, the House of Representatives has passed H.R. 1424, The Paul Wellstone Mental Health and Addiction Equity Act which would enact these provisions without an expiration date. The bill passed the House by a 268-148 vote on March 5, 2008.

This year mental health parity supporters had hoped for a permanent enactment. But the House bill has complicated chances for permanent mental health parity enactment by adding the provisions of a controversial genetic information nondiscrimination bill (H.R. 493), the House had enacted last year. Now H.R. 1424 must be reconciled with the Mental Health Parity Act of 2007 (S. 558), which the Senate unanimously approved last year.

This significant addition of the genetic nondiscrimination provisions contained in H.R. 493 likely will slow resolution of the mental health parity provisions considerably. H.R. 493 would prohibit health insurers and employers from using genetic information to deny health coverage, adjust health premiums or discriminate in hiring or employment duties. Although the Senate HELP Committee has reported a genetic nondiscrimination bill, S. 358, the Senate has taken no further action on that bill.

The next step will require a House-Senate conference to resolve the differences between the two bills. Neither bill requires an employer to provide mental health coverage; rather the bills would require parity for medical/surgical benefits and mental health coverage, if the employer offers coverage for mental health. Employer groups have been urging support of S. 558, which provides employers with more flexibility in providing mental health benefits.

The Bush administration issued a statement supporting the provisions of S. 558 generally, but objecting to the specific genetic nondiscrimination measures included in H.R. 493. The White House issued the following statement on the House bill.

A major point of opposition by employers is the House bill's requirement for coverage for every mental illness condition listed in the Diagnostic and Statistical Manual of Mental Disorders, 4th Edition, published by The American Psychiatric Association. Employer organizations caution that such comprehensive mental health coverage, which is not required for physical illnesses or injury, will result in unmanageable cost increases.

Regardless of the differences in the bills, members of both the House and Senate have been working for more than a year to achieve an acceptable bill. Major players, including Democratic Representative Patrick Kennedy and Republican Senator Pete Domenici, have been working together to reach a consensus bill. However, Senator Domenici, a long-time supporter of mental health parity, has publicly stated it may be impossible to get the "perfect bill" the House is seeking. A bill this year would be extremely important to the Senator, who has announced his retirement at the end of this year. It is possible the Congress might be willing to enact the law in part as a farewell gift to a long-time colleague.

The information in this Washington Bulletin is general in nature only and not intended to provide advice or guidance for specific situations. If you have any questions or need additional information about articles appearing in this or previous versions of Washington Bulletin, please contact: Robert Davis 202.879.3094, Elizabeth Drigotas 202.879.4985, Mary Jones 202.378.5067, Stephen LaGarde 202.879-5608, Erinn Madden 202.572.7677, Bart Massey 202.220.2104, Mark Neilio 202.378.5046, Martha Priddy Patterson 202.879.5634, Tom Pevarnik 202.879.5314, Sandra Rolitsky 202.220.2025, Tom Veal 312.946.2595, Deborah Walker 202.879.4955. Copyright 2008, Deloitte.