Three-quarters of U.S. employers do not plan to drop insurance coverage for
mental health and substance use treatment when a new federal law goes into
effect next year requiring them to offer such benefits at a level equal to
that of other medical benefts, a recent survey indicates.
The online survey, to which more than 140 employers responded, was
conducted by the Partnership for Workplace Mental Health, a program of the
American Psychiatric Foundation. The survey was designed to elicit a better
understanding of the extent of currently available mental health benefits and
what changes employers will make to comply with the new parity law.
Among the chief results of the survey was a finding that 93 percent of
respondents offer at least some mental health benefits, and among those, at
least 74 percent were not considering dropping mental health coverage. In
addition, at least 77 percent were not considering dropping substance use
treatment coverage as a result of the law. The next-largest groups of
respondents did not know whether dropping either coverage was under
consideration. Only about 7 percent of respondents reported they were
considering dropping mental health coverage, and about 8 percent were mulling
the end of substance use treatment
"The [survey] results tell us that employers understand that mental
health is an essential component of health," said Alan Axelson, M.D.,
cochair of the partnership's Advisory Council and medical director of
InterCare Psychiatric Services in Pittsburgh.
The new parity law, known as the Paul Wellstone and Pete Domenici Mental
Health Parity and Addiction Equity Act, requires health plans that offer
mental health coverage to have the same benefits, copayments, and treatment
limits as other types of health care. The law, which potentially could give
113 million people equal access to mental health coverage if employers retain
insurance plans with behavioral health features, goes into effect on January
1, 2010, for most calendar-year plans. The law exempts employers with 50 or
fewer employees from its requirements. Final regulations to implement the law
are expected to be issued in October.
The survey authors sent out about 1,000 questionnaires to employers of
varying sizes and received 143 completed responses.
More than three-quarters of responding companies are covered by the
Employee Retirement Income Security Act (ERISA). Companies that self-insure
and fall under ERISA were not subject to previous state mental health
insurance parity requirements.
The survey found many employers will have to make significant changes in
the health plans they offer workers to comply with the law. The law, for
instance, requires employers to make several benefit design changes, including
equalizing copayments and outpatient visit limits. The survey found 37 percent
plan to change their copayments, 36 percent will change outpatient visit
limits, and 29 percent will amend their out-of-network coverage features.
Employer responses also indicated that they plan to increase their use and
promotion of wellness (35 percent) and employee-assistance (38 percent)
"The current economic climate has exacerbated existing workplace
mental health issues," said William Bruning, J.D., cochair of the
partnership's Advisory Council and president and CEO of the Mid-America
Coalition on Health Care in Kansas City. "When employees who need mental
health treatment receive it, productivity increases."
The survey also found that mental health and substance abuse care were
relatively inexpensive for employers. Only 9 percent of employers spent more
than 5 percent of their health care budget on those two categories of care,
and most did not expect that to change. Sixty-four percent of survey
respondents said they expect parity implementation will reduce their costs,
have no effect, or increase costs by less than 2 percent. Only 36 percent of
respondents expected costs to increase by more than 2 percent.
"The business case for quality mental health care is there,"
But even small projected increases are important, experts have said,
because strong federal parity legislation was stymied for decades by business
leaders' long-standing concerns that parity requirements would greatly
increase their health care costs. The new law allows employers to not adhere
to parity requirements if their costs increase by more than 2 percent in the
first year of parity and by more than 1 percent in subsequent years.