[Congressional Record Volume 153, Number 26 (Monday, February 12, 2007)]
[Senate]
[Pages S1864-S1868]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DOMENICI (for himself, Mr. Kennedy, Mr. Enzi, Mr. Brown, 
        Mr. Smith, Mr. Feingold, Mr. Coleman, Mr. Lautenberg, Mr. 
        Warner, Mrs. Boxer, Ms. Murkowski, Mr. Akaka, Mr. Roberts, Mr. 
        Cardin, Mr. Hatch, Ms. Cantwell, Ms. Collins, Ms. Stabenow, Ms. 
        Snowe, Mr. Biden, Mr. Graham, and Mr. Nelson of Nebraska):
  S. 558. A bill to provide parity between health insurance coverage of 
mental health benefits and benefits for medical and surgical services; 
to the Committee on Health, Education, Labor, and Pensions.
  Mr. KENNEDY. Access to mental health services is one of the most 
important and most neglected civil rights issues facing the Nation. For 
too long, persons living with mental disorders have suffered 
discriminatory treatment at all levels of society. They have been 
forced to pay more for the services they need and to worry about their 
job security if their employer finds out about their condition. Sadly, 
in America today, patients with biochemical problems in their liver are 
treated with better care and greater compassion than patients with 
biochemical problems in their brain.
  That kind of discrimination must end. No one questions the need for 
affordable treatment of physical illnesses. But those who suffer from 
mental illnesses face serious barriers in obtaining the care they need 
at a cost they can afford. Like those suffering from physical 
illnesses, persons with mental disorders deserve the opportunity for 
quality care. The failure to obtain treatment can mean years of 
shattered dreams and unfulfilled potential.
  Eleven years ago, Congress passed the first Mental Health Parity Act. 
That legislation was an important first step in bringing attention to 
discriminatory practices against the mentally ill, but it did little to 
correct the injustices that so many Americans continue to face. The 
1996 legislation required that annual and lifetime dollar limits for 
mental health coverage must be no less than the limits for medical and 
surgical coverage. But more steps are clearly needed to guarantee that 
Americans suffering from mental illness are not forced to pay more for 
the services they need, do not face harsher limitations on treatment, 
and are not denied access to care.
  This bill is a chance to take the actions needed to end the 
longstanding discrimination against persons with mental illness. The 
late Senator Paul Wellstone and Senator Pete Domenici deserve great 
credit for their bipartisan leadership on mental health parity. If it 
were not for them, we would not be here today.
  The bill prohibits group health plans from imposing treatment 
limitations or financial requirements on the coverage of mental health 
conditions that do not also apply to physical conditions. That means no 
limits on days or treatment visits, and no exorbitant co-payments or 
deductibles. The bill was negotiated by and has the support of the 
mental health community, the business community, and the insurance 
industry.
  The need is clear. One in five Americans will suffer some form of 
mental illness this year--but only a third of them will receive 
treatment. Millions of our fellow citizens are unnecessarily enduring 
the pain and sadness of seeing a family member, friend, or loved one 
suffer illnesses that seize the mind and break the spirit.
  Battling mental illness is itself a painful process, but 
discrimination against persons with such illnesses is especially cruel, 
since the success rates for treatment often equal or surpass those for 
physical conditions. According to the National Institute of Mental 
Health, clinical depression treatment can be 70 percent successful, and 
treatment for schizophrenia can be 60 percent successful.
  Over the years we've heard compelling testimony from experts, 
activists, and patients about the need to equalize coverage of physical 
and mental illnesses. The Office of Personnel Management talks us that 
providing full parity to 8.5 million federal employees has led to 
minimal premium increases. We heard dramatic testimony about the 
economic and social advantages of parity, including a healthier, more 
productive workforce.
  Some of the most compelling testimony came several years ago from 
Lisa Cohen, a hardworking American from New Jersey, who suffers from 
both physical and mental illnesses, and is forced to pay exorbitant 
costs for treating her mental disorder, while paying little for her 
physical disorder. She is typical of millions of Americans who not only 
face the cruel burden of mental illness, but also the cruel burden of 
discriminatory treatment. No Americans should be denied equal treatment 
of an illness because it starts in the brain instead of the heart, 
lungs, or other parts of their body. No patients should be denied 
access to the treatment that can cure their illness because of where 
they live or work.
  A number of States have already enacted mental health parity laws, 
but 86 million workers under ERISA have no protection under state 
mental health statutes.
  Mental health parity is a good investment for the Nation. The costs 
from lost worker productivity and extra physical care outweigh the 
costs of implementing parity for mental health treatment.
  Over the years study after study has shown that parity makes good 
financial sense. An analysis of more than 46,000 workers at major 
companies showed that employees who report being depressed or under 
stress are likely to have substantially higher health costs than co-
workers without such conditions. Employees who reported being depressed 
had health bills 70 percent higher than those who did not suffer from 
depression. Those reporting high stress had 46 percent higher health 
costs. McDonnell Douglas found a 4 to 1 return on investment after 
accounting for lower medical claims, reduced absenteeism, and smaller 
turnover.
  Mental illness also imposes a huge financial burden on the Nation. It 
costs us $300 billion each year in treatment expenses, lost worker 
productivity, and crime. This country can afford mental health parity. 
What we can't afford is to continue denying persons with mental 
disorders the care they need.
  Today is a turning point. We are finally moving toward ending this 
shameful form of discrimination in our society--discrimination against 
mental illness. This bill has been seven years in the making, and 
brings first class medicine to millions of Americans who have been 
second class patients for too long.
  Today, we begin to right that wrong, by guaranteeing equal treatment 
to the 11 million people receiving mental health services, and 
promising equal treatment to the remaining 100 million insured workers 
and their families who never know the day they may need their mental 
health benefit.
  The 1996 Act, was an important step towards ending health insurance 
discrimination against mental illness. This bill will take another 
large step forward by closing the loopholes that remain.
  It guarantees co-payments, deductibles, coinsurance, out of pocket 
expenses and annual and lifetime limits that apply to mental health 
benefits are no different than those applied to medical and surgical 
benefits.

[[Page S1865]]

  It guarantees that the frequency of treatment, number of visits, days 
of coverage and other limits on scope and duration of treatment for 
mental health services are no different than those applied to medical 
and surgical benefits.
  This equal treatment and financial equity is also applied to 
substance abuse.
  Features of State law that require coverage of mental disorders are 
protected, to assure those currently protected by state parity laws 
that their needs will be met.
  The medical management strategies needed to prevent denial of 
medically needed services for patients remain intact.
  Finally, the bill is modeled on the parity that is already guaranteed 
to the 8.5 million persons, including Members of Congress, under the 
Federal Employee Benefits Program,
  Equal treatment of those affected by mental illness is not just an 
insurance issue. It's a civil rights issue. At its heart, mental health 
parity is a question of simple justice.
  It is long past time to end insurance discrimination and guarantee 
all people with mental illness the coverage they deserve.
  I urge my colleagues to support this important principle, and end the 
unacceptable double standards that have unfairly plagued our health 
care systems for so long.
  Mr. DOMENICI. Mr. President, I rise today along with my colleagues 
Senator Kennedy and Senator Enzi to introduce the Mental Health Parity 
Act of 2007. I want to thank my colleagues for all of their hard work 
on this issue and I am glad we are able to introduce this paramount 
legislation.
  Simply put, our legislation will provide parity between mental health 
coverage and medical and surgical coverage. No longer will people be 
treated differently only because they suffer from a mental illness. 
This means 113 million people in group health plans will benefit from 
our bill.
  We are here today after years of hard work. We have worked with the 
mental health community, the business community, and insurance groups 
to carefully construct a fair bill. A sampling of the groups include 
the National Alliance on Mental Illness, the American Psychological 
Association, the American Psychiatric Association, the National Retail 
Federation, and Aetna Insurance.
  This bill will no longer apply a more restrictive standard to mental 
health coverage and another more lenient standard be applied to medical 
and surgical coverage. What we are doing is a matter of simple 
fairness. Statistics demonstrate that there is a significant need for 
this change in policy. Currently, 26 percent of American adults or 
nearly 58 million people suffer from a diagnosable mental illness each 
year. Six percent of those adults suffer from a serious mental illness. 
Additionally, more than 30,000 people commit suicide each year in the 
United States. We need to reduce these numbers, and I believe expanding 
access to mental health services will allow us to do so.
  This bill will provide mental health parity for about 113 million 
Americans who work for employers with 50 or more employees and ensure 
health plans do not place more restrictive conditions on mental health 
coverage than on medical and surgical coverage. Additionally, the 
legislation includes parity for financial requirements such as 
deductibles, copayments, and annual lifetime limits. Also, this bill 
includes parity for treatment limitations regarding the number of 
covered hospital days and visits. This bill does not Mandate the 
coverage of mental health nor does it prohibit a health plan from 
managing mental health benefits in order to ensure only medically 
necessary treatments are covered.
  Again, I would like to thank everyone who contributed to the 
development of this legislation. I believe we are making a difference 
today and I look forward to working with my colleagues to move this 
bill forward.
  I ask for unanimous consent that the text of the bill to be printed 
in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 558

       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, 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; or
       ``(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.--
       ``(1) 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, 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, except that in no event shall 
     this subsection require the provision of out-of-network 
     coverage for mental health benefits even in the case where 
     out-of-network coverage is provided for medical and surgical 
     benefits.
       ``(2) Clarification.--Nothing in paragraph (1) shall be 
     construed as requiring that a group health plan (or coverage 
     in connection with such a plan) eliminate an out-of-network 
     provider option from such plan (or coverage) pursuant to the 
     terms of the plan (or coverage).
       ``(d) Small Employer Exemption.--
       ``(1) In general.--This section shall not apply to any 
     group health plan (and 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) 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

[[Page S1866]]

     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 by a qualified actuary 
     who is a member in good standing of the American Academy of 
     Actuaries. Such determinations shall be certified by the 
     actuary and be made available to the general public.
       ``(4) 6-month determinations.--If a group health plan (or a 
     health insurance issuer offering coverage in connections 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)(1) and shall be 
     subject to the applicable notice requirements under section 
     104(b)(1).
       ``(f) Rule of Construction.--Nothing in this section shall 
     be construed to require a group health plan (or health 
     insurance coverage offered in connection with such a plan) to 
     provide any mental health benefits.
       ``(g) Mental Health Benefits.--In this section, the term 
     `mental health benefits' means benefits with respect to 
     mental health services (including substance abuse treatment) 
     as defined under the terms of the group health plan or 
     coverage.''.
       (b) Public Health Service Act.--Subpart 1 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, 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; or
       ``(3) be prohibited from 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.--
       ``(1) 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, 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, except that in no event shall 
     this subsection require the provision of out-of-network 
     coverage for mental health benefits even in the case where 
     out-of-network coverage is provided for medical and surgical 
     benefits.
       ``(2) Clarification.--Nothing in paragraph (1) shall be 
     construed as requiring that a group health plan (or coverage 
     in connection with such a plan) eliminate an out-of-network 
     provider option from such plan (or coverage) pursuant to the 
     terms of the plan (or coverage).
       ``(d) Small Employer Exemption.--
       ``(1) In general.--This section shall not apply to any 
     group health plan (and 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) 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 by a qualified actuary 
     who is a member in good standing of the American Academy of 
     Actuaries. Such determinations shall be certified by the 
     actuary and be made available to the general public.
       ``(4) 6-month determinations.--If a group health plan (or a 
     health insurance issuer offering coverage in connections 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)(1) and shall be 
     subject to the applicable notice requirements under section 
     104(b)(1).
       ``(f) Rule of Construction.--Nothing in this section shall 
     be construed to require a group health plan (or health 
     insurance coverage offered in connection with such a plan) to 
     provide any mental health benefits.
       ``(g) Mental Health Benefits.--In this section, the term 
     `mental health benefits' means benefits with respect to 
     mental health services (including substance abuse 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:

[[Page S1867]]

       ``(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. SPECIAL PREEMPTION RULE.

       (a) ERISA Preemption.--Section 731 of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1191) is 
     amended--
       (1) by redesignating subsections (c) and (d) as subsections 
     (e) and (f), respectively; and
       (2) by inserting after subsection (b), the following:
       ``(c) Special Rule in Case of Mental Health Parity 
     Requirements.--
       ``(1) In general.--Notwithstanding any provision of section 
     514 to the contrary, the provisions of this part relating to 
     a group health plan or a health insurance issuer offering 
     coverage in connection with a group health plan shall 
     supercede any provision of State law that establishes, 
     implements, or continues in effect any standard or 
     requirement which differs from the specific standards or 
     requirements contained in subsections (a), (b), (c), or (e) 
     of section 712A.
       ``(2) Clarifications.--Nothing in this subsection shall be 
     construed to preempt State insurance laws relating to the 
     individual insurance market or to small employers (as such 
     term is defined for purposes of section 712A(d)).''.
       (b) PHSA Preemption.--Section 2723 of the Public Health 
     Service Act (42 U.S.C. 300gg-23) is amended--
       (1) by redesignating subsections (c) and (d) as subsections 
     (e) and (f), respectively; and
       (2) by inserting after subsection (b), the following:
       ``(c) Special Rule in Case of Mental Health Parity 
     Requirements.--
       ``(1) In general.--Notwithstanding any provision of section 
     514 of the Employee Retirement Income Security Act of 1974 to 
     the contrary, the provisions of this part relating to a group 
     health plan or a health insurance issuer offering coverage in 
     connection with a group health plan shall supercede any 
     provisions of State law that establishes, implements, or 
     continues in effect any standard or requirement which differs 
     from the specific standards or requirements contained in 
     subsections (a), (b), (c), or (e) of section 2705A.
       ``(2) Clarifications.--Nothing in this subsection shall be 
     construed to preempt State insurance laws relating to the 
     individual insurance market or to small employers (as such 
     term is defined for purposes of section 2705A(d)).''.
       (c) Effective Date.--The provisions of this section shall 
     take effect with respect to a State, on the date on which the 
     provisions of section 2 apply with respect to group health 
     plans and health insurance coverage offered in connection 
     with group health plans.

     SEC. 5. 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 abuse, the impact of any additional cost or 
     savings to the plan, 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.

  Mr. ENZI. Mr. President, first and foremost I want to thank my 
respective colleagues Senator Kennedy and Senator Domenici for their 
dedication and leadership on the issues of mental health parity. Your 
commitment and willingness to compromise has gotten us to the point 
where we are today--introducing a mental health parity bill that has 
the potential to be signed into law this year.
  For many this is monumental. Parity for mental health benefits was 
first championed by the late Senator Paul Wellstone. Senator Domenici 
in memory of our late colleague took over as the lead advocate for this 
legislation after the passing of Senator Wellstone.
  Today is a reflection of your hard work, Senator Domenici, as well as 
the groundwork that was laid by the late Senator Paul Wellstone.
  The advocacy of my good colleagues Senator Wellstone and Domenici 
helped to get the Mental Health Parity Act of 1996 signed into law. 
This legislation acted as a catalyst for many states to take action in 
passing their own mental health parity laws. To date 38 States have 
passed some sort of mental health parity or benefit law. Many of these 
laws go much farther than the 1996 Act. However, there is a concern 
that while the 1996 Act requires parity for annual and lifetime dollar 
limits on coverage, group plans may impose more restrictive treatment 
and cost sharing requirements. This is a legit concern. There is a also 
a valid concern that requiring parity or mental health benefits will 
drive up the cost of insurance, and result in group plans offering less 
coverage or even worse dropping coverage for both mental and physical 
health. The bill introduced today recognizes both of these concerns and 
addresses them. This in turn breaks the log jam that has halted efforts 
in the past three Congress's to pass a Mental Health Parity Act that is 
more widely known as the Paul Wellston Mental Health Equitable 
Treatment Act.
  The Mental Health Parity Act we are introducing today is a compromise 
between the proponents and those who opposed the Paul Wellstone Mental 
Health Equitable Treatment Act. It is a result of two years of 
discussion and compromise between the business and insurer industry and 
the mental health community. I want to thank both of you for coming 
together in good faith to find a middle ground on an issue has 
polarized stakeholders. Your support and input has been critical to 
making this process work. Your willingness to work together to 
accommodate each others concerns, makes it possible for a mental health 
parity law to be enacted this Congress.
  A vital component of the Mental Health Parity Act introduced today 
recognizes the importance and need for treating mental health equal to 
physical health, without unfairly mandating group health plans offer 
mental health coverage. The legislation applies only to those group 
health plans that already offer physical and surgical benefits as well 
as mental health benefits. It does not mandate what types of mental 
health benefits must receive parity, but leaves that to be defined 
under the terms of the plan or coverage or as defined under State law. 
What this legislation does do, is require a plan to provide financial 
requirements and treatment limitations applied to mental health 
benefits equal to the financial requirements and treatment limitations 
applied to medical and surgical benefits that the plan covers. For 
example, deductibles, co-payments, coinsurance, out of pocket expenses, 
frequency of treatment, number of visits and days of coverage will now 
be treated equally for mental health and physical health. To allow for 
health plans to adequately manage the new parity requirement mechanisms 
are authorized to allow for medical management tools to be used by 
health plans. Provisions of this law will preempt provisions of State 
law that differ. But again, this bill would not preempt State laws 
mandating that mental health benefits be covered. Furthermore, States 
that elect to adopt the Federal standards would not be subject to 
preemption.

  In addition, the legislation recognizes the stress many small 
business employers are under to provide health care to their employees, 
thus, this bill does exempts small employers. Any employer with 50 or 
less employees will not be affected by the Federal law, but must still 
comply with its State law or regulation.

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  Another critical component of this compromised legislation is a cost 
exemption. Under the provision, an employer may elect to continue to 
offer mental health parity if a group plan results in an increase of 2 
percent in the case of the first plan year and 1 percent in the case of 
each subsequent plan year.
  The compromises made in this legislation are of great importance to 
making sure this legislation will not burden employers struggling with 
health care costs, while not compromising the significance or effect 
this legislation will have in ensuring individuals have better access 
to critical mental health services. Approximately 1 in 5 Americans ages 
18 and older, have a mental disorder that can be diagnosed in a given 
year according to the Substance Abuse and Mental Health Service 
Administration. However, their ability to receive treatment may be 
hindered due to cost issues or the stigma attached to mental illness. 
This legislation will help to address both by sending the message that 
mental health is just as important as physical health, and needs to be 
treated with the same amount of importance. This bill signals to an 
individual diagnosed with schizophrenia that his or her illness is as 
real as an individual diagnosed with diabetes and that they should not 
have to pay more for the mental illness than the physical. This 
legislation will help an employee covered by an affected plan who has a 
child with bipolar disorder better access to the treatment that child 
needs. In the past 20 years new technologies and treatments have 
advanced our understanding and ability to treat a mental illness. We 
now know with the right diagnoses, support, treatment and case 
management a person with mental illness can be a contributing member of 
society. It is time to update our laws to reflect this.
  While introduction today is a huge step forward for a Mental Health 
Parity law, much more needs to be done to secure its passage. The 
legislation, as it is currently crafted, still must pass through the 
Senate Health, Education, Labor and Pensions Committee as early as 
Wednesday, the full Senate and then the House. At this point, a process 
has been created that allows for open and honest discussion. I 
encourage my colleagues and the stakeholders to continue this process 
and to remain together throughout each step of the way. By working 
together, instead of against each other, we can achieve passage of this 
legislation.
  Mr. SMITH. Mr. President, I rise today with my colleagues Senator 
Domenici and Senator Kennedy to introduce a bill that will have 
tremendous impact for the millions of Americans who will suffer from 
mental illness in their lifetime. The Mental Health Parity Act of 2007 
is an important bill and I look forward to its passage.
  Mental illness can affect people of any age, of any race, and of any 
income. As a parent with a son who struggled with mental illness, I 
know all too well the indiscriminate nature of the illness and the 
frightening statistics of its regular occurrence for those we love. The 
statistics on the prevalence of mental illness are indeed startling. We 
know that in any given year, more than a quarter of our nation's 
adults--60 million people--suffer from a diagnosable mental disorder, 
many of whom suffer in silence. We also know that mental disorders can 
disrupt lives and are the leading cause of disability for those aged 
15-44 in the United States and in Canada.
  Mental illness is just as deadly and serious as a physical illness. 
Suicide takes the lives of more than 30,000 people each year, with more 
than 700,000 attempts. We also know that suicides outnumber homicides 
three to one each year. We also know that people who suffer from mental 
illness suffer from much higher rates of other chronic conditions, such 
as cardiovascular disease. However, unlike heart attacks and strokes, 
mental illness is not something that we, as a nation, want to talk 
about.
  However, we know that effective treatment exists for most people 
suffering. Help is out there, and this bill will help make it 
available. Mental health is not a Democratic issue or a Republican 
issue. Too much is at stake when we talk about mental health care 
reform to get caught up in partisan politics. We need to work together 
to find solutions. This bill is a big step and an important step in 
moving that needed reform forward. Through parity, we can alleviate 
some of the burden on the public mental health system that results when 
families are forced to turn to the public system when they do not have 
access to treatment through private plans.
  My home State of Oregon had the wisdom and foresight to see that 
mental health parity was necessary. I am proud that this year they are 
implementing parity for the people of Oregon. In a 2004 report by the 
Governor's Mental Health Taskforce, they found that in any given year 
175,00 adults and 75,000 children under the age of 18 are in need of 
mental health services. It also listed as one of the major problems 
facing the Oregon mental health system the fact that mental health 
parity was not, at that time, in effect. That is no longer the case and 
I look forward to seeing significant improvements in the mental health 
system in Oregon as a result of the hard work done there.
  The introduction of this federal legislation is hard fought and so 
important. I look forward to working with my colleagues to ensure its 
passage. I urge my colleagues on both sides of the aisle to support 
this bill.

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