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October 12, 2008

Mental Health Benefits Expanded

As part of the Emergency Economic Stabilization Act of 2008 (H.R. 1424), a new mental health parity provision becomes law. The existing federal mental health parity law requires that annual and lifetime limits for mental health services be comparable to those for medical and surgical services. Under the new law, mental health services must be treated in a substantially similar manner to medical and surgical services. This would include: 

  • Cost-sharing requirements, such as deductibles, co-payments, coinsurance, and out-of-pocket expenses; and,
  • Treatment limitations, such as frequency of treatments, number of visits, days of coverage, or similar plan limits.

This law does not require that a plan offer mental health services. Many State laws require that insured plans do. However, if mental health services are to be provided, they must be substantially similar to those provided for other medical and surgical services.

As is true with existing law, the mental health parity provisions only apply to employers employing 50 or more employees.

Also similar to existing law, there is an opt-out, if the mandate would cause financial hardship to the group health plan.

These provisions become applicable to plan years beginning on or after October 3, 2009. For calendar year plans, this means January 1, 2010.

 

The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations.

As required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained in this Benefit Beat is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service.

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