May 7, 1999

Key proponents of parity for mental health insurance introduced legislation last month designed to close loopholes in the Mental Health Parity Act of 1996 (MHPA).

The House and Senate versions differ significantly in that the House version, known as the Mental Health and Substance Abuse Parity Act of 1999, requires full parity for all mental health and substance abuse disorders included in DSM-IV, while the Senate version excludes coverage for substance abuse disorders and limits full parity to a specified list of "severe biologically based disorders." In only one provision is the Senate version more generous than the House version: it tightens the exemption for small businesses from exempting businesses with 50 or fewer employees to exempting those with 25 or fewer employees; the House version retains the 50 or fewer exemption. As with the current law, both versions apply only to group health plans already providing mental health benefits.

The Senate bill is called the Mental Health Equitable Treatment Act of 1999. Provisions that appear in this bill but not in the 1996 law appear below.

• Prohibits limits on number of hospital days and outpatient visits for all mental illnesses.



• Provides full parity for the following severe biologically based mental illnesses: schizophrenia, bipolar disorder, major depression, obsessive-compulsive and severe panic disorders, posttraumatic stress disorder, autism, and other severe and disabling mental disorders such as anorexia nervosa and attention-deficit-hyperactivity disorder.



• The term "severe biologically based mental illness" refers to the above illnesses as defined by current medical science in conjunction with DSM IV.



• Eliminates 1 percent opt-out provision under the 1996 MHPA, which let businesses drop the mandated mental health benefits if providing them raised insurance premiums by 1 percent or more.