Guest Article

(From the November 17, 2003 issue of Deloitte's Washington Bulletin, a periodic update of legal and regulatory developments relating to Employee Benefits.)

Senate Delays Action on Enhanced Mental Health Parity Bill Until Next Year

Senators Pete Domenici (R-NM) and Edward Kennedy (D-MA)-- chief sponsors of the Paul Wellstone Mental Health Equitable Treatment Act (S. 486)-- on November 6 announced the Senate would not act on the bill before Congress adjourns in 2003. But, during a brief exchange on the Senate floor, they indicated Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Judd Gregg (R-NH) and Senate Majority Leader Bill Frist (R-TN) have made the bill a priority for next year.

The assurances by Chairman Gregg and Majority Leader Frist apparently have staved off a threat by Senator Kennedy to offer S. 486 as an amendment to the next continuing resolution. (Congress has been using continuing resolutions to keep the government running since the 2004 fiscal year started on October 1.) Of course, Senator Kennedy may renew those threats if the Senate does not act on the bill before next fall.

Summary of S. 486

S. 486 does not merely extend current law mental health parity requirements. Under existing standards, employer-sponsored group health plans that provide medical and surgical benefits and mental health benefits generally may not subject mental health benefits to different annual or lifetime limits. But plans may have different deductible, co-pay, coinsurance, and duration of coverage requirements for mental health and non-mental health services. Additionally, plans are exempt from these requirements if compliance would increase their costs by 1 percent or more. By comparison, S. 486 would prevent plans from imposing any "treatment limitations or financial requirements" on mental health benefits that are not comparable to those they impose on medical and surgical benefits. For this purpose, "treatment limitations" would include any limits on the frequency of treatment (e.g., number of visits or days of coverage), and "financial requirements" would include deductibles, cost-sharing provisions, and annual and lifetime limits. S. 486 also would change current law by repealing the increased cost exemption. (There still would be a small employer exemption.)

Outlook

The Senate almost surely will pass S. 486 if and when it comes up for a vote. (In addition to Senators Domenici and Kennedy, the bill has 65 cosponsors.) But the House is another matter. On the Senate floor, Senator Domenici cited problems scheduling a hearing on the bill in the House as one reason for the bill being held up this long. (Rep. Patrick Kennedy introduced the House companion bill, H.R. 953, which now has 242 cosponsors.)

It is not clear whether they have resolved these problems, or if the Senate is simply planning to go forward and continue working on a compromise with House leaders. However, as of November 14, neither the House Committee on Education and the Workforce nor the Committee on Energy and Commerce-- the two committees of jurisdiction-- had scheduled any action on H.R. 953.

The House has stopped enhanced mental health parity legislation before. After the Senate approved a similar bill in 2001 as part of the Labor-HHS appropriations bill, House Republicans caused it to be dropped from the bill in favor of a one-year extension of existing law. Presumably Congress will enact another one-year extension of current mental health parity requirements before going home later this month (or in December). Otherwise, the existing mental health parity rules will sunset on December 31.

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 questions or need additional information about this article, please contact Martha Priddy Patterson (202.879.5634) or Robert B. Davis (202.879.3094). Copyright 2003, Deloitte.