[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 558 Referred in House (RFH)]
1st Session
S. 558
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 19, 2007
Referred to the Committee on Energy and Commerce, and in addition to
the Committee on Education and Labor, for a period to be subsequently
determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned
_______________________________________________________________________
AN ACT
To provide parity between health insurance coverage of mental health
benefits and benefits for medical and surgical services.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Mental Health Parity Act of 2007''.
SEC. 2. MENTAL HEALTH PARITY.
(a) Amendments of ERISA.--Subpart B of part 7 of title I of the
Employee Retirement Income Security Act of 1974 is amended by inserting
after section 712 (29 U.S.C. 1185a) the following:
``SEC. 712A. MENTAL HEALTH PARITY.
``(a) In General.--In the case of a group health plan (or health
insurance coverage offered in connection with such a plan) that
provides both medical and surgical benefits and mental health benefits,
such plan or coverage shall ensure that--
``(1) the financial requirements applicable to such mental
health benefits are no more restrictive than the financial
requirements applied to substantially all medical and surgical
benefits covered by the plan (or coverage), including
deductibles, copayments, coinsurance, out-of-pocket expenses,
and annual and lifetime limits, except that the plan (or
coverage) may not establish separate cost sharing requirements
that are applicable only with respect to mental health
benefits; and
``(2) the treatment limitations applicable to such mental
health benefits are no more restrictive than the treatment
limitations applied to substantially all medical and surgical
benefits covered by the plan (or coverage), including limits on
the frequency of treatment, number of visits, days of coverage,
or other similar limits on the scope or duration of treatment.
``(b) Clarifications.--In the case of a group health plan (or
health insurance coverage offered in connection with such a plan) that
provides both medical and surgical benefits and mental health benefits,
and complies with the requirements of subsection (a), such plan or
coverage shall not be prohibited from--
``(1) negotiating separate reimbursement or provider
payment rates and service delivery systems for different
benefits consistent with subsection (a);
``(2) managing the provision of mental health benefits in
order to provide medically necessary services for covered
benefits, including through the use of any utilization review,
authorization or management practices, the application of
medical necessity and appropriateness criteria applicable to
behavioral health, and the contracting with and use of a
network of providers; and
``(3) applying the provisions of this section in a manner
that takes into consideration similar treatment settings or
similar treatments.
``(c) In- and Out-of-Network.--In the case of a group health plan
(or health insurance coverage offered in connection with such a plan)
that provides both medical and surgical benefits and mental health
benefits, and that provides such benefits on both an in- and out-of-
network basis pursuant to the terms of the plan (or coverage), such
plan (or coverage) shall ensure that the requirements of this section
are applied to both in- and out-of-network services by comparing in-
network medical and surgical benefits to in-network mental health
benefits and out-of-network medical and surgical benefits to out-of-
network mental health benefits.
``(d) Small Employer Exemption.--
``(1) In general.--Except as provided in paragraph (2),
this section shall not apply to any group health plan (or group
health insurance coverage offered in connection with a group
health plan) for any plan year of any employer who employed an
average of at least 2 (or 1 in the case of an employer residing
in a State that permits small groups to include a single
individual) but not more than 50 employees on business days
during the preceding calendar year.
``(2) No preemption of certain state laws.--Nothing in
paragraph (1) shall be construed to preempt any State insurance
law relating to employers in the State who employed an average
of at least 2 (or 1 in the case of an employer residing in a
State that permits small groups to include a single individual)
but not more than 50 employees on business days during the
preceding calendar year.
``(3) Application of certain rules in determination of
employer size.--For purposes of this subsection:
``(A) Application of aggregation rule for
employers.--Rules similar to the rules under
subsections (b), (c), (m), and (o) of section 414 of
the Internal Revenue Code of 1986 shall apply for
purposes of treating persons as a single employer.
``(B) Employers not in existence in preceding
year.--In the case of an employer which was not in
existence throughout the preceding calendar year, the
determination of whether such employer is a small
employer shall be based on the average number of
employees that it is reasonably expected such employer
will employ on business days in the current calendar
year.
``(C) Predecessors.--Any reference in this
paragraph to an employer shall include a reference to
any predecessor of such employer.
``(e) Cost Exemption.--
``(1) In general.--With respect to a group health plan (or
health insurance coverage offered in connections with such a
plan), if the application of this section to such plan (or
coverage) results in an increase for the plan year involved of
the actual total costs of coverage with respect to medical and
surgical benefits and mental health benefits under the plan (as
determined and certified under paragraph (3)) by an amount that
exceeds the applicable percentage described in paragraph (2) of
the actual total plan costs, the provisions of this section
shall not apply to such plan (or coverage) during the following
plan year, and such exemption shall apply to the plan (or
coverage) for 1 plan year. An employer may elect to continue to
apply mental health parity pursuant to this section with
respect to the group health plan (or coverage) involved
regardless of any increase in total costs.
``(2) Applicable percentage.--With respect to a plan (or
coverage), the applicable percentage described in this
paragraph shall be--
``(A) 2 percent in the case of the first plan year
in which this section is applied; and
``(B) 1 percent in the case of each subsequent plan
year.
``(3) Determinations by actuaries.--Determinations as to
increases in actual costs under a plan (or coverage) for
purposes of this section shall be made and certified by a
qualified and licensed actuary who is a member in good standing
of the American Academy of Actuaries. All such determinations
shall be in a written report prepared by the actuary. The
report, and all underlying documentation relied upon by the
actuary, shall be maintained by the group health plan or health
insurance issuer for a period of 6 years following the
notification made under paragraph (6).
``(4) 6-month determinations.--If a group health plan (or a
health insurance issuer offering coverage in connection with a
group health plan) seeks an exemption under this subsection,
determinations under paragraph (1) shall be made after such
plan (or coverage) has complied with this section for the first
6 months of the plan year involved.
``(5) Notification.--An election to modify coverage of
mental health benefits as permitted under this subsection shall
be treated as a material modification in the terms of the plan
as described in section 102(a) and shall be subject to the
applicable notice requirements under section 104(b)(1).
``(6) Notification to appropriate agency.--
``(A) In general.--A group health plan (or a health
insurance issuer offering coverage in connection with a
group health plan) that, based upon a certification
described under paragraph (3), qualifies for an
exemption under this subsection, and elects to
implement the exemption, shall notify the Department of
Labor or the Department of Health and Human Services,
as appropriate, of such election.
``(B) Requirement.--A notification under
subparagraph (A) shall include--
``(i) a description of the number of
covered lives under the plan (or coverage)
involved at the time of the notification, and
as applicable, at the time of any prior
election of the cost-exemption under this
subsection by such plan (or coverage);
``(ii) for both the plan year upon which a
cost exemption is sought and the year prior, a
description of the actual total costs of
coverage with respect to medical and surgical
benefits and mental health benefits under the
plan; and
``(iii) for both the plan year upon which a
cost exemption is sought and the year prior,
the actual total costs of coverage with respect
to mental health benefits under the plan.
``(C) Confidentiality.--A notification under
subparagraph (A) shall be confidential. The Department
of Labor and the Department of Health and Human
Services shall make available, upon request and on not
more than an annual basis, an anonymous itemization of
such notifications, that includes--
``(i) a breakdown of States by the size and
type of employers submitting such notification;
and
``(ii) a summary of the data received under
subparagraph (B).
``(7) Audits by appropriate agencies.--To determine
compliance with this subsection, the Department of Labor and
the Department of Health and Human Services, as appropriate,
may audit the books and records of a group health plan or
health insurance issuer relating to an exemption, including any
actuarial reports prepared pursuant to paragraph (3), during
the 6 year period following the notification of such exemption
under paragraph (6). A State agency receiving a notification
under paragraph (6) may also conduct such an audit with respect
to an exemption covered by such notification.
``(f) Mental Health Benefits.--In this section, the term `mental
health benefits' means benefits with respect to mental health services
(including substance use disorder treatment) as defined under the terms
of the group health plan or coverage, and when applicable as may be
defined under State law when applicable to health insurance coverage
offered in connection with a group health plan.''.
(b) Public Health Service Act.--Subpart 2 of part A of title XXVII
of the Public Health Service Act is amended by inserting after section
2705 (42 U.S.C. 300gg-5) the following:
``SEC. 2705A. MENTAL HEALTH PARITY.
``(a) In General.--In the case of a group health plan (or health
insurance coverage offered in connection with such a plan) that
provides both medical and surgical benefits and mental health benefits,
such plan or coverage shall ensure that--
``(1) the financial requirements applicable to such mental
health benefits are no more restrictive than the financial
requirements applied to substantially all medical and surgical
benefits covered by the plan (or coverage), including
deductibles, copayments, coinsurance, out-of-pocket expenses,
and annual and lifetime limits, except that the plan (or
coverage) may not establish separate cost sharing requirements
that are applicable only with respect to mental health
benefits; and
``(2) the treatment limitations applicable to such mental
health benefits are no more restrictive than the treatment
limitations applied to substantially all medical and surgical
benefits covered by the plan (or coverage), including limits on
the frequency of treatment, number of visits, days of coverage,
or other similar limits on the scope or duration of treatment.
``(b) Clarifications.--In the case of a group health plan (or
health insurance coverage offered in connection with such a plan) that
provides both medical and surgical benefits and mental health benefits,
and complies with the requirements of subsection (a), such plan or
coverage shall not be prohibited from--
``(1) negotiating separate reimbursement or provider
payment rates and service delivery systems for different
benefits consistent with subsection (a);
``(2) managing the provision of mental health benefits in
order to provide medically necessary services for covered
benefits, including through the use of any utilization review,
authorization or management practices, the application of
medical necessity and appropriateness criteria applicable to
behavioral health, and the contracting with and use of a
network of providers; and
``(3) applying the provisions of this section in a manner
that takes into consideration similar treatment settings or
similar treatments.
``(c) In- and Out-of-Network.--In the case of a group health plan
(or health insurance coverage offered in connection with such a plan)
that provides both medical and surgical benefits and mental health
benefits, and that provides such benefits on both an in- and out-of-
network basis pursuant to the terms of the plan (or coverage), such
plan (or coverage) shall ensure that the requirements of this section
are applied to both in- and out-of-network services by comparing in-
network medical and surgical benefits to in-network mental health
benefits and out-of-network medical and surgical benefits to out-of-
network mental health benefits.
``(d) Small Employer Exemption.--
``(1) In general.--Except as provided in paragraph (2),
this section shall not apply to any group health plan (or group
health insurance coverage offered in connection with a group
health plan) for any plan year of any employer who employed an
average of at least 2 (or 1 in the case of an employer residing
in a State that permits small groups to include a single
individual) but not more than 50 employees on business days
during the preceding calendar year.
``(2) No preemption of certain state laws.--Nothing in
paragraph (1) shall be construed to preempt any State insurance
law relating to employers in the State who employed an average
of at least 2 (or 1 in the case of an employer residing in a
State that permits small groups to include a single individual)
but not more than 50 employees on business days during the
preceding calendar year.
``(3) Application of certain rules in determination of
employer size.--For purposes of this subsection:
``(A) Application of aggregation rule for
employers.--Rules similar to the rules under
subsections (b), (c), (m), and (o) of section 414 of
the Internal Revenue Code of 1986 shall apply for
purposes of treating persons as a single employer.
``(B) Employers not in existence in preceding
year.--In the case of an employer which was not in
existence throughout the preceding calendar year, the
determination of whether such employer is a small
employer shall be based on the average number of
employees that it is reasonably expected such employer
will employ on business days in the current calendar
year.
``(C) Predecessors.--Any reference in this
paragraph to an employer shall include a reference to
any predecessor of such employer.
``(e) Cost Exemption.--
``(1) In general.--With respect to a group health plan (or
health insurance coverage offered in connection with such a
plan), if the application of this section to such plan (or
coverage) results in an increase for the plan year involved of
the actual total costs of coverage with respect to medical and
surgical benefits and mental health benefits under the plan (as
determined and certified under paragraph (3)) by an amount that
exceeds the applicable percentage described in paragraph (2) of
the actual total plan costs, the provisions of this section
shall not apply to such plan (or coverage) during the following
plan year, and such exemption shall apply to the plan (or
coverage) for 1 plan year. An employer may elect to continue to
apply mental health parity pursuant to this section with
respect to the group health plan (or coverage) involved
regardless of any increase in total costs.
``(2) Applicable percentage.--With respect to a plan (or
coverage), the applicable percentage described in this
paragraph shall be--
``(A) 2 percent in the case of the first plan year
in which this section is applied; and
``(B) 1 percent in the case of each subsequent plan
year.
``(3) Determinations by actuaries.--Determinations as to
increases in actual costs under a plan (or coverage) for
purposes of this section shall be made and certified by a
qualified and licensed actuary who is a member in good standing
of the American Academy of Actuaries. All such determinations
shall be in a written report prepared by the actuary. The
report, and all underlying documentation relied upon by the
actuary, shall be maintained by the group health plan or health
insurance issuer for a period of 6 years following the
notification made under paragraph (6).
``(4) 6-month determinations.--If a group health plan (or a
health insurance issuer offering coverage in connection with a
group health plan) seeks an exemption under this subsection,
determinations under paragraph (1) shall be made after such
plan (or coverage) has complied with this section for the first
6 months of the plan year involved.
``(5) Notification.--An election to modify coverage of
mental health benefits as permitted under this subsection shall
be treated as a material modification in the terms of the plan
as described in section 102(a) of the Employee Retirement
Income Security Act of 1974 and shall be subject to the
applicable notice requirements under section 104(b)(1) of such
Act.
``(6) Notification to appropriate agency.--
``(A) In general.--A group health plan (or a health
insurance issuer offering coverage in connection with a
group health plan) that, based upon a certification
described under paragraph (3), qualifies for an
exemption under this subsection, and elects to
implement the exemption, shall notify the Department of
Labor or the Department of Health and Human Services,
as appropriate, of such election. A health insurance
issuer providing health insurance coverage in
connection with a group health plan shall provide a
copy of such notice to the State insurance department
or other State agency responsible for regulating the
terms of such coverage.
``(B) Requirement.--A notification under
subparagraph (A) shall include--
``(i) a description of the number of
covered lives under the plan (or coverage)
involved at the time of the notification, and
as applicable, at the time of any prior
election of the cost-exemption under this
subsection by such plan (or coverage);
``(ii) for both the plan year upon which a
cost exemption is sought and the year prior, a
description of the actual total costs of
coverage with respect to medical and surgical
benefits and mental health benefits under the
plan; and
``(iii) for both the plan year upon which a
cost exemption is sought and the year prior,
the actual total costs of coverage with respect
to mental health benefits under the plan.
``(C) Confidentiality.--A notification under
subparagraph (A) shall be confidential. The Department
of Labor and the Department of Health and Human
Services shall make available, upon request and on not
more than an annual basis, an anonymous itemization of
such notifications, that includes--
``(i) a breakdown of States by the size and
type of employers submitting such notification;
and
``(ii) a summary of the data received under
subparagraph (B).
``(7) Audits by appropriate agencies.--To determine
compliance with this subsection, the Department of Labor and
the Department of Health and Human Services, as appropriate,
may audit the books and records of a group health plan or
health insurance issuer relating to an exemption, including any
actuarial reports prepared pursuant to paragraph (3), during
the 6 year period following the notification of such exemption
under paragraph (6). A State agency receiving a notification
under paragraph (6) may also conduct such an audit with respect
to an exemption covered by such notification.
``(f) Mental Health Benefits.--In this section, the term `mental
health benefits' means benefits with respect to mental health services
(including substance use disorder treatment) as defined under the terms
of the group health plan or coverage, and when applicable as may be
defined under State law when applicable to health insurance coverage
offered in connection with a group health plan.''.
SEC. 3. EFFECTIVE DATE.
(a) In General.--The provisions of this Act shall apply to group
health plans (or health insurance coverage offered in connection with
such plans) beginning in the first plan year that begins on or after
January 1 of the first calendar year that begins more than 1 year after
the date of the enactment of this Act.
(b) Termination of Certain Provisions.--
(1) ERISA.--Section 712 of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1185a) is amended by striking
subsection (f) and inserting the following:
``(f) Sunset.--This section shall not apply to benefits for
services furnished after the effective date described in section 3(a)
of the Mental Health Parity Act of 2007.''.
(2) PHSA.--Section 2705 of the Public Health Service Act
(42 U.S.C. 300gg-5) is amended by striking subsection (f) and
inserting the following:
``(f) Sunset.--This section shall not apply to benefits for
services furnished after the effective date described in section 3(a)
of the Mental Health Parity Act of 2007.''.
SEC. 4. FEDERAL ADMINISTRATIVE RESPONSIBILITIES.
(a) Group Health Plan Ombudsman.--
(1) Department of labor.--The Secretary of Labor shall
designate an individual within the Department of Labor to serve
as the group health plan ombudsman for the Department. Such
ombudsman shall serve as an initial point of contact to permit
individuals to obtain information and provide assistance
concerning coverage of mental health services under group
health plans in accordance with this Act.
(2) Department of health and human services.--The Secretary
of Health and Human Services shall designate an individual
within the Department of Health and Human Services to serve as
the group health plan ombudsman for the Department. Such
ombudsman shall serve as an initial point of contact to permit
individuals to obtain information and provide assistance
concerning coverage of mental health services under health
insurance coverage issued in connection with group health plans
in accordance with this Act.
(b) Audits.--The Secretary of Labor and the Secretary of Health and
Human Services shall each provide for the conduct of random audits of
group health plans (and health insurance coverage offered in connection
with such plans) to ensure that such plans are in compliance with this
Act (and the amendments made by this Act).
(c) Government Accountability Office Study.--
(1) Study.--The Comptroller General shall conduct a study
that evaluates the effect of the implementation of the
amendments made by this Act on the cost of health insurance
coverage, access to health insurance coverage (including the
availability of in-network providers), the quality of health
care, the impact on benefits and coverage for mental health and
substance use disorders, the impact of any additional cost or
savings to the plan, the impact on out-of-network coverage for
mental health benefits (including substance use disorder
treatment), the impact on State mental health benefit mandate
laws, other impact on the business community and the Federal
Government, and other issues as determined appropriate by the
Comptroller General.
(2) Report.--Not later than 2 years after the date of
enactment of this Act, the Comptroller General shall prepare
and submit to the appropriate committees of Congress a report
containing the results of the study conducted under paragraph
(1).
(d) Regulations.--Not later than 1 year after the date of enactment
of this Act, the Secretary of Labor and the Secretary of Health and
Human Services shall jointly promulgate final regulations to carry out
this Act.
Passed the Senate September 18, 2007.
Attest:
NANCY ERICKSON,
Secretary.